Legislative Update for Week Ending February 6, 2015

Legislative Update for Week Ending February 6, 2015

This week, President Obama sent his fiscal 2016 budget blueprint to Congress, and The Senior Citizens League (TSCL) saw one new cosponsor sign on to the Notch Fairness Act.

President Obama Releases Budget Blueprint

On Monday, President Obama released his $4.066 trillion budget blueprint for fiscal 2016. His plan puts an end to the so-called “sequester” and increases spending for defense and discretionary programs by 7 percent. Upon releasing the blueprint, he said, “I’m not going to accept a budget that locks in sequestration going forward. It would be bad for our security and bad for our growth ... I want to work with Congress to replace mindless austerity with smart investments.”

To offset the increased spending, the proposal calls for approximately $400 billion in health care savings, with most coming from within the Medicare program. Under the President’s plan, more beneficiaries would be subject to means testing and they would see higher premiums for Parts B and D. In addition, new beneficiaries would need to pay a copayment on home health care services, and they would also be faced with a surcharge on premiums for Medigap plans.

Doctors, hospitals, and other providers would also be affected – payments would be reduced to nursing homes, teaching hospitals, and other facilities, and doctors would no longer be paid according to the fee schedule laid out in the flawed sustainable growth rate (SGR) formula. While some of these changes – including the repeal of the SGR – would be welcomed by TSCL, we do have serious concerns about the increased cost-sharing that many beneficiaries would see under the plan.

The blueprint also lays out some modifications to the Social Security program. It would close the Disability Insurance (DI) trust fund’s shortfall by transferring funds from the Old Age and Survivor’s Insurance (OASI) trust fund over a period of five years. TSCL’s members and supporters overwhelmingly oppose the transfer of funds from one trust fund to another since it would put the OASI trust fund on worse financial footing. However, we were pleased to see that President Obama did not include the adoption of the “chained” CPI in his budget blueprint as he did two years ago.

The plan released this week is not expected to be adopted or even to win any bipartisan support on Capitol Hill. However, it does mark the start of the fiscal 2016 budget negotiations, and it lays out the line-by-line needs of the federal agencies for appropriators. Soon, the House and Senate Budget Committees will release their own spending blueprints for fiscal 2016, and TSCL expects to see proposals that would dramatically alter the Social Security and Medicare programs. We will keep a close eye on the negotiations as they evolve, and will post updates here in the Legislative News section of our website.

Notch Bill Gains New Cosponsor

This week, one new cosponsor – Rep. Alcee Hastings (FL-20) – signed on to Rep. Grace Meng’s (NY-6) Notch Fairness Act (H.R. 314). The bill now has ten cosponsors. If signed into law, it would provide modest compensation to victims of the Social Security Notch, or those who were born between 1917 and 1926. Just years before they were set to retire, these individuals learned that they would have significantly lower benefits than originally anticipated. The problem has grown and compounded over time, and TSCL believes that in order to make the program more equitable, some compensation for the injustice should be provided. We enthusiastically support Rep. Meng’s Notch Fairness Act, and we were pleased to see one more lawmaker sign on as a cosponsor this week.