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An Unbalanced Debt Deal: Cutting Vital Programs Does Not Address the Deficit

The deal to raise the debt ceiling that may or may not have been reached between President Obama and Speaker of the House John Boehner should be rejected by members of the House and Senate if it is as unbalanced as is being reported in the press. Supposedly it includes no tax increases and that makes it unbalanced on its face. Rather it includes a promise of future tax reform in exchange for immediate cuts to vital programs.

In general, the White House has been trying to get agreement with Republicans in Congress to balance budget cuts with tax increases as a way to tame annual deficits and contribute to bringing the accumulated debt down as a share of Gross Domestic Product (GDP). The White House was asking for $4 trillion in cuts and revenue increases over 12 years, but numbers discussed recently are somewhat more modest and talk of cuts, not tax increases, has dominated.

While the Republicans have refused to accept tax increases, the President has been willing to put large cuts on the table, even suggesting significant cuts in well-loved programs such as Social Security and Medicare. This inclination exists despite the White House’s insistence that Social Security does not contribute to the budget deficit and its Trustees projection that the program will have sufficient funds to pay benefits in full through 2036, even if no changes are made. While Medicare’s future shortfalls are expected to contribute to future budget deficits—if health care costs are not brought under better control—the Trustees of the two plans project that Medicare can pay all benefits through 2024, and an Actuary Office within DHHS moved their estimate from 2017 to 2029 due to the passage of health care reform, even if no further changes are made on the benefit or revenue side.

Any deal that makes significant cuts to the benefits provided by these programs should be rejected. Women are the majority of those receiving benefits from both Medicare and Social Security, primarily because they live longer than men and these programs primarily serve those in their 60s and beyond. IWPR research shows how much women rely on Social Security. More than two-thirds of all women aged 65 and older rely on Social Security for half or more of their income. For men that age, the share is more than half.

Among the cuts to Social Security that may be included in the deal, as reported in the media, is a shift in the cost of living adjustment (COLA) to a smaller measure of inflation which is less accurate than the current price index used to adjust Social Security benefits. Health and aging experts agree that elders face higher than average price inflation because they consume so much health care, yet the proposed switch to the “chained CPI” would reduce benefits.  According to the National Women’s Law Center (NWLC), at age 65 the chained CPI would reduce benefits by 1 percent and, by age 95, it would result in a 10 percent reduction of benefits. Women are twice as likely as men to live to age 95, meaning a benefit cut that accumulates over time, as the chained CPI does, would especially hurt women.

Raising the eligibility age for either Social Security or Medicare amounts to a disastrous cut to seniors and future retirees, who have paid for these benefits throughout their lives. Every one year increase in the eligibility age for Social Security amounts to a seven percent cut in benefits across the board. Lack of health insurance is an enormous problem for older adults. Rates of employer-sponsered health insurance coverage decline beginning at age 50—and continue to decline until the Medicare eligibility age (65) is reached. Raising the eligibility age for Medicare would prolong the period without insurance coverage that many experience just as their health care needs are increasing.

The debt ceiling needs to be raised to enable the federal government to meet obligations it has already incurred. Congress has already approved the budget expenditures that require the ceiling to be raised and they should lift the debt ceiling to allow the budget they voted for to be fully implemented.

Cutting essential programs that do not contribute to the deficit now and will not for at least a decade is a completely unnecessary part of any deal on the debt ceiling. There are many ways of bringing the nation’s debt under control without attacking programs that Americans rely on for survival. Moreover, Americans strongly support these programs and would be willing to pay more in taxes if necessary to preserve current levels of benefits.

Members of Congress who vote for cuts such as these may well find that voters do not agree with their actions.

Heidi Hartmann, Ph.D., is the President of the Institute for Women’s Policy Research. he has published numerous articles in journals and books and her work has been translated into more than a dozen languages. She lectures widely on women, economics, and public policy, frequently testifies before the U.S. Congress, and is often cited as an authority in various media outlets.

National Council of Women’s Organizations Launches “Respect, Protect, Reject” Campaign

By Heidi Reynolds-Stenson

In effort to reach a budget deal by the debt ceiling deadline on August 2, leaders in Congress have indicated they are willing to make cuts to vital programs such as Social Security, Medicare, and Medicaid. The cuts would harm women and families who rely on these programs for their survival. In response, the Older Women’s Economic Security (OWES) Task Force of the National Council of Women’s Organizations (NCWO) launched a nationwide campaign, “Respect, Protect, Reject 2012.”

Through a public petition, the task force is asking lawmakers to respect women’s contributions to the economy and their need for economic security, protect Social Security, Medicare, Medicaid and other programs that are vital to women, and reject any budget plan that will impoverish vulnerable women and families. The task force wrote to congressional leaders on Tuesday to warn of the consequences of cuts to such programs for women and for the national economy and to urge the leaders to “place women’s circumstances and concerns at the center of their analysis and response.”

To help spread the word about the new campaign and bring more attention to these issues, NCWO held a conference call on Tuesday, July 12 moderated by NCWO Chair Susan Scanlan. On the call, Congresswoman Donna Edwards of Maryland’s 4th District—who recently signed onto a letter with 69 other Democrats urging President Obama to oppose cuts to Social Security, Medicare, and Medicaid—emphasized that although the national debt clearly needs to be dealt with, it is important that it not be done at the expense of critical social safety net programs. She explained that for many of her constituents, women in particular, “Social Security is their security. Social Security is their groceries…It’s their day-to-day-expenses and so it’s not an option.”  

National Organization for Women (NOW) President Terry O’Neill reminded leaders to look not to Social Security, Medicare, and Medicaid when deciding how to reduce the national debt but to what is really contributing to the national debt— joblessness (because less jobs means less income tax revenue), Bush-era tax cuts for the wealthy, and unfunded wars. She also shared a startling statistic—if the chained-CPI adjustment is made to Social Security, 73,400 more people will be in poverty by 2020 as a result, over 54,000 of which will be women.  Asked by a reporter if she thought everything should be on the table in the debt negotiations, O’Neill responded, “Emphatically, no. We do not agree.”

Joan Entmacher, Vice President for Family Economic Security at the National Women’s Law Center (NWLC) brought attention to how much women have been suffering in the recovery since the end of the Great Recession.  While men have been gaining jobs since the end of the Great Recession, women have actually been losing jobs, mainly due to lay-offs in the public sector.  Cuts to vital programs will worsen an already difficult situation for women resulting from policies such as deregulation and taxes on the middle class.

Retired worker and member of the board for the Older Women’s League, Margie Metzler shared a moving personal story of what Social Security and Medicare have meant to her. Laid off at age 62, she found that no one was willing to hire an older woman. Without health insurance or family to support her, she began receiving Social Security, and then Medicare after she turned 65. Hearing talk of cuts to these programs terrifies Margie because she knows she has nothing to spare.  “The reality is they’re saying to me, ‘It’s perfectly fine if you just die.’”

Margie is committed to fighting for these programs that have been such a lifesaver for her and cautioned against reforms such as means-testing that might discourage women in need from applying for aid through programs such as Social Security. “I am not one of those people who says, ‘I have mine. I don’t care about the rest of you… I am going to be fighting for the people behind me,’” said Margie.  “From my standpoint, how can I feel anything but terrified and angry, but I also feel galvanized into action.”

Heidi Reynolds-Stenson is a Research Intern at the Institute for Women’s Policy Research.

Women Thrown Under the Bus (Again)

by Heidi Hartmann

Friday evening (4/8/2011) while the Democrats and Republicans were negotiating their budget deal for the remainder of FY 2011, as the news began to trickle out, we learned that once more, women are being thrown under the bus.

True, the Republican negotiator, John Boehner, Speaker of the House, wanted more anti-woman stuff he didn’t get—a ban on Planned Parenthood receiving any women’s health services funds from Title X.  But because of President Obama’s willingness to compromise (as reported by  The Washington Post), Boehner did win a prohibition on the use of DC taxpayers’ funds to provide abortions to low-income women in DC—in other words, thanks to Boehner and Obama, we DC residents can no longer use our own, locally-generated tax dollars to fund abortions for poor women.  Women thrown under the bus by our president!

Sunday morning we awoke to hear on the news interview shows that President Obama will propose ways to rein in the federal debt, both by raising taxes and reducing costs in programs like Medicaid, Medicare, and Social Security in a major speech on Wednesday (4/13/11).  While raising taxes is potentially good news for women, who rely on government programs more than men do, and so will be helped by added revenues, reducing costs in programs like Medicaid, Medicare, and Social Security is almost certainly disastrous news for women.  In other words on Wednesday when President Obama unveils his long term plan for reducing the US debt, he will almost certainly throw women under the bus again!

Women are 61 percent of adult Medicaid recipients, 57 percent of the 65 and older Medicare recipients, and 57 percent of the 65 and older Social Security recipients. Women also rely on Social Security more than men do:  as of 2009, 50 percent of women aged 65 and older and 35 percent of men of the same age range relied on Social Security for 80 percent or more of their income.

With so many more people more reliant on Social Security for retirement income than ever before (given the fall in pension fund balances, savings, and home equity), cutting Social Security benefits in any way (including by raising the retirement age) should be a non-starter for any serious policymaker, whether Democratic or Republican, especially because the American public has responded in survey after survey that they’d rather see Social Security taxes raised than Social Security benefits cut.

Medicare is already subject to very significant cost-savings under the health care reform act passed last year and the ability of the Affordable Care Act to deliver on its promise of covering 34 million uninsured Americans hinges on the continued performance of both Medicare and Medicaid.  It’s hard to see how squeezing more cost-savings from these programs can be done without significantly reducing benefits. A better approach would be to institute efficiencies and cost-controls in the entire health care industry.

To protect the gains women have made in the past 50 years and to keep what is left of America’s social safety net from fraying further, concerted political action is needed now.   Check out the websites of Planned Parenthood in Metropolitan Washington, national Planned Parenthood, NOW, National Women’s Law Center, and other women’s groups to find effective ways to increase your political activism. The Campaign for America’s Future is organizing an email campaign to let the President know what you would like him to say in Wednesday’s speech.

After the speech, please make your opinions known to Congress as they debate the FY 2012 budget, raising the ceiling on the federal debt, and potential cuts to Medicare, Medicaid and Social Security.  Women have much to lose from further spending cuts, as well as from a failure to raise the debt ceiling.

Heidi Hartmann is the President of the Institute for Women’s Policy Research.

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