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Social Security, Medicare Safe From Fed Cuts—Until March

Posted: Jan 12, 2013

LOS ANGELES--The dreaded “fiscal cliff” of government spending cuts and tax raises that was to take effect on January 1 has been averted for now, thanks to an agreement by the White House and Congress reached last week.

Congress and the Obama administration have only temporarily averted the “cliff” by about two months when they will return to the issue of sequestration – the automatic, across-the-board federal spending cuts.

For now, the agreement that was reached calls for ending a payroll tax “holiday” that reduced the tax by two percent; establishing permanent tax relief for low-income and middle-class families and extending federal unemployment benefits. Tax cuts will end for individuals with incomes of $400,000 or more ($450,000 for couples).

Political “Third Rail”

Although Social Security and Medicare were left pretty much intact, the entitlement programs may very well be on the table when Congress takes up the issue again. Carroll Estes, professor at the University of California, San Francisco’s Institute for Health and Aging, said that the Social Security is still a “third rail”—politicians need to remember, “If you step on it you’ll get electrocuted.”

Social Security, created during the Great Depression, provides workers a basic level of income once they retire, in addition to disability pay and life insurance before they retire that provides income to the surviving spouse and their children.

In fact, almost half of Social Security beneficiaries in African American and Latino families are covered by these disability and survivors benefits, compared with one-fourth of whites.

Cuts to the program have been touted by Republicans, in particular, to help trim the $16 trillion national debt. However, because workers automatically pay into the system and their contributions are matched by employers, the program does not add to the deficit. Medicare, which provides health coverage to people ages 65 and older and those under 65 with permanent disabilities, was established in 1965 as part of the Social Security Act.

According to Estes, immediate past-president of the National Committee to Preserve Social Security and Medicare, what we’re seeing now is a “Social insurance hijack attack. It’s our money, we paid for and earned our benefits, we deserve and need them.”

The Committee, headquartered in Washington, D.C., opposes any effort to raise the age of eligibility for Social Security or Medicare. The Congress¬ional Black Caucus, in a statement released in December, has also said they will oppose any plan that raises the eligibility for Medicare, as well as any plan that cuts benefits to Medicaid beneficiaries. The Caucus also states, “Social Security does not contribute to our deficit and should be completely off the negotiating table.”

Ethnic Elders Will Double

Steven P. Wallace, a researcher with the University of California, Los Angeles CLA Center for Health Policy Research (UCLA) since 1980, was one of many speakers who put a human face on the issue of aging for the participants.

In 2010 elders numbered 40 million people in the United States; that number is expected to double by the year 2040. Currently, 20 percent of those elders are people of color, and that number is also expected to double by the year 2050.

While an increase in longevity has been seen in the U.S. and other parts of the world overall – life expectancy has increased in general from age 47 in 1900 to more than age 78 today according to the Centers for Disease Control.

According to Wallace’s research, wealth is not equally distributed and income has declined in the past year for African Americans and Asian Americans in the “Baby Boomer” age range (born from 1946 through 1964). This group also had the highest level of income decline.

Half of ethnic elders in the U.S. are in poverty or close to it, Wallace said, and they have the least amount of reserves to fall back on; they are the most impacted by economic uncertainties.

U.S. Rep. Karen Bass, D, Calif., who represents much of South Los Angeles, expressed excitement about portions of last week’s fiscal deal that was reached with Congress, but she was also worried about its implications for many of her constituents.

“I remain very concerned about cuts to programs like Medicare and Social Security that are important to many seniors across my District,” Bass said. “Included were cuts to services for diabetes, end stage renal disease and other illnesses disproportionately impacting seniors and we need to look at ways to restore that funding.”

Thandisizwe Chimurenga wrote this article as part of the MetLife Foundation Journalists in Aging Fellowship, a program of New America Media and the Gerontological Society of America.

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