TSCL Makes News on Social Security COLA Increase
Once again, TSCL is being quoted in a number of media outlines regarding its forecast of the 2023 Social Security COLA.
Among them is Yahoo Finance, which said this: “Based on new inflation data through June, the cost-of-living adjustment for Social Security benefits, or COLA, could be an increase of 10.5% next year, according to estimates from the Senior Citizens League, boosting the average retiree benefit by $175.10 every month.”
However, the article pointed out that a larger COLA is not all good news for seniors. The COLA will not go into effect until January of next year. In addition, it is likely a Medicare Part B increase will take a large portion of the new COLA. And it could push certain seniors into a higher tax bracket resulting in increased taxes and/or a reduction in some benefits.
Quoting TSCL’s Social Security Policy Analyst Mary Johnson, the article pointed out that “A bigger Social Security benefit translates to higher income, which can mean higher taxes for those with incomes above $25,000 for individuals and $32,000 for married couples, according to Johnson. Tens of thousands of retirees who have not paid taxes on their benefits in the past may discover they must start doing so in 2023.
“‘Because the income thresholds are not adjusted like ordinary tax brackets, these once-in-a-lifetime COLA increases could lead to permanently higher taxes for many retirees,’ Johnson said.
“Higher income can also result in cuts in income-related benefits for low-income seniors, Johnson said. A May-June survey from the Senior Citizens League found that 39% of participants who receive low-income benefits reported their low-income assistance was reduced due to this year’s 5.9% COLA, while 15% reported they lost access to at least one assistance program.
“‘The most cruel irony is that a high COLA can lead to trims in income-related benefits such as SNAP and rental assistance for low-income beneficiaries,’ Johnson said.”
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Manchin Torpedoes Plan for Bill to Lower Drug Prices
For the past few weeks, we have been reporting that the Democratic majority in the Senate was going to try to pass a bill to lower prescription drug costs before Congress goes on its annual August recess.
We said that Senate Majority Leader Charles Schumer (D-N.Y.) had been working with Senator Joe Manchin (D-W.Va.) to try and come up with a bill Manchin can support. Manchin had killed the earlier Democratic plan to lower drug prices as part of a much larger “Build Back Better” bill that President Biden had wanted Congress to pass.
Manchin complained that the bill would cost too much, and he wanted part of the legislation to go toward reducing the federal deficit, among other things.
We wrote that there were reports they had reached a tentative agreement on legislation to lower drug costs and extend the solvency of Social Security, but those items were part of a larger bill that was not finalized. That bill contained contentious details on energy spending and tax provisions that were still being negotiated, but Democrats had hoped to unveil deals on those last week.
However, it was revealed last Thursday that Manchin said he could no longer support the bill Democratic leaders thought they were close to finalizing, even though it met many of his earlier demands. He said his change of mind was due to surging inflation.
He then said he could support a smaller deal now that would lower prescription drug prices and bolster health care premiums or wait until later in the fall to see if inflation cools down. It is not clear if extending Social Security solvency as part of the smaller package is something he would support now.
Senate Democratic leaders must decide whether to accept his demands and pass the smaller bill now or wait 6 to 8 weeks to see where inflation is and then try to pass a larger bill so close to the November elections.
After the Manchin announcement, President Biden issued a statement calling on the Senate to pass health-care provisions that the caucus can get behind and that he would sign the legislation if it can pass Congress.
Manchin’s support is critical, of course, because every Democratic vote in the Senate is needed to pass the bill due to the fact that no Republican is expected to support it.
This development is very disappointing for all of us who have worked so hard for legislation to lower drug prices, but the fight is not over.
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Bill to Lower Insulin Costs Faces Delays in Senate
Last week we also reported on a bi-partisan bill in the Senate that would lower the cost of insulin and cap the out-of-pocket cost to diabetes patients at $35 a month. Because it was developed by Senators Jeanne Shaheen (D-N.H.) and Susan Collins (R-Maine), it was hoped it could get a vote in the Senate this month.
We said that because of Senate rules, the Shaheen-Collins bill will require support from at least 10 Republican senators in order to clear a filibuster and pass. However, it is far from clear that 10 Republicans can be found to support the bill. Some are citing fears of interfering with the free market as the reason for their opposition to the bill.
Now, Senate Majority Leader Chuck Schumer has said he plans to hold a vote soon on the bill, but key Republican senators say they are not ready for a vote right now.
“I agree we’ve got to deal with insulin, but I don’t think they’ve got the right mechanism to do it just yet,” said Sen. Mike Crapo (R-Idaho), ranking member of the Senate Finance Committee. Crapo said he agrees with Republicans who want to hold a hearing on the legislation before it is brought to a vote on the floor.
Sen. Chuck Grassley (R-Iowa) said he’s waiting for the Congressional Budget Office to produce an updated analysis of the bill to understand its impact. He also wants to get a sense of how many drug-makers would voluntarily take up the bill’s offer to hold prices to a 2021 level in exchange for a prohibition on rebates. Drug-makers pay rebates to insurers or other entities in the supply chain partly to get better placement on insurance networks.
Democrats fear Republicans are stalling on passing the bill because they do not want to let the Democrats claim victory before the fall elections, while Republicans think Democrats are simply “rushing” the legislation to the floor to blame Republicans for its failure.
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H.R. 82, The Social Security Fairness Act, has finally reached the magic number of over 290 co-sponsors. The Social Security Fairness Act (H.R. 82), if passed into law, would eliminate the Windfall Elimination Provision and the Government Pension Offset.
The Windfall Elimination Provision and the Government Pension Offset are two provisions that unfairly reduce or even eliminate the Social Security benefits of millions of Americans who have devoted their careers to public service, as well as having worked other jobs that withheld payroll taxes from their wages for Social Security benefits.
Per a relatively new House rule, any bill with 290 cosponsors can be added to the House Consensus Calendar (The Consensus Calendar is the go-to place for common sense bipartisan bills to move out of the house closet and be enacted into law). Once on, it is teed up for a vote if it maintains those 290 cosponsors or more for 25 legislative days (that basically means days when the House is in session).
Then, the bill is referred to the Senate, where it usually follows the same route through committees and finally to the floor. This chamber may approve the bill as received, reject it, ignore it or change it. The Senate version of H.R.82, S.1302, has 40 bi-partisan co-sponsor. That’s pretty darn good! If the Senate accepts the bill from the house, or passes its own bill, it’s on to the President.
If the President approves of the legislation, it is signed and becomes law. If the President takes no action for ten legislative days, the bill automatically becomes law. If the President opposes the bill, they may veto the bill. In addition, if no action is taken for 10 days and Congress has already adjourned, there is a "pocket veto".
As we continue moving toward a new normal in dealing with the Covid 19 pandemic, TSCL remains constant in our fight for you to protect your Social Security, Medicare, and Medicaid benefits.
For progress updates or for more information about these and other bills that would strengthen Social Security and Medicare programs, visit our website at www.SeniorsLeague.org or follow TSCL Facebook or on Twitter.