This week, Members of Congress returned to Capitol Hill to focus on a six-month spending bill that would fund the government through March 2013. In addition, one House subcommittee discussed the direct deposit of Social Security benefits, and a group of eight Senators resumed talks about a deficit-reduction plan.
Subcommittee Discusses Direct Deposit Issues
On Wednesday, the Ways and Means Subcommittee on Social Security held a hearing on the direct deposit of Social Security benefits – an issue that some of The Senior Citizens League’s members have expressed concerns about.
According to Subcommittee Chairman Sam Johnson (TX-3), efforts to end paper checks have been under way for more than sixteen years, and today, 94 percent of beneficiaries willingly receive their benefits through direct deposit. By March of 2013, however, all beneficiaries will be required to sign up for electronic payment – a move that the Treasury estimates will save $1 billion over the next ten years.
Despite the significant cost savings of electronic checks, many at Wednesday’s hearing expressed concerns about identity thieves who have been able to successfully divert electronic benefit payments into their own accounts in the past.
Chairman Johnson stated, “It is simply unacceptable that Social Security can’t put a stop to this … We need to determine the flaws in the electronic payment system, protect those who receive their benefits electronically, and make sure that the Treasury and Social Security are taking all necessary steps to guard beneficiaries against those trying to steal their benefits.” Inspector General Patrick O’Carroll, who was present at Wednesday’s hearing, vowed to increase fraud prevention efforts in the near future.
Bipartisan “Gang of Eight” Works on Deficit Deal
A bipartisan group of Senators known as the “Gang of Eight” is holding out hope that a deficit reduction compromise can be reached by the end of this year. The group’s original proposal, which called for $3.7 trillion in deficit reduction and a switch to the chained-CPI, failed to gain traction in Congress last year. The group has resumed negotiations, however, and has set its sights even higher this time around.
According to one member, the “Gang of Eight” is hoping to settle on a comprehensive plan that would reduce the deficit by $5 trillion and address the automatic spending cuts that are set to take effect in January. They hope to have their proposal ready for the post-election session, and although no details have been released yet, one member told Congressional Quarterly to expect significant revenue increases along with “structural changes in entitlements.” As more details of the plan become available in the coming months, TSCL will continue to provide updates here in the Legislative News section of our website.