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Medicare and Social Security on Collision Course With Deficit (Press Release)
Alexandria, VA (September 29, 2003)--Americans may soon face painful Medicare and Social Security cuts, and higher payroll taxes, unless a soaring federal deficit can be brought under control, warns a national seniors organization. "It's time we heed the warnings from the Comptroller General of the United States," says George Smith, Chairman of TREA Senior Citizens League (TSCL). The Comptroller General says, "we are facing a huge fiscal hole. The first thing we should do is stop digging!" (1)
Recently David M. Walker, the U.S. Comptroller General, said that, "it takes a crisis to stimulate action on difficult policy challenges. Although our nation's long-term fiscal outlook is seriously out of balance, there are a variety of government policies, programs and operations now in place and others being considered that build in costs for the future." He said that these costs are often "not adequately considered when key decisions are made." (2)
In recent weeks the nation learned that the budget deficit is hundreds of billions more than thought, and that the military and construction costs in Iraq will require additional tens of billions more than projected. "While the nation is spending billions to help provide health care and other services in Iraq, our seniors are beginning to ask why Congress hasn't done more to help their own constituents here at home," Smith says.
"We could learn a lesson from the past," Smith explains. In the late 1970's Congress repeatedly delayed action on Social Security until faced with crisis. Abrupt changes were made to the benefit formula, and a transition formula that was provided to phase - in the changes was a virtual failure. The economy did not perform the way economists expected. The changes cut the benefits more than could have been expected for those who became eligible to retire just two years after enactment. As a result, persons born from 1917 through 1926, who were affected by these changes, receive lower benefits than other Social Security recipients with similar work records. "Abrupt change helped give birth to the Notch Babies," says Smith. "This may happen again in the near future. Economic conditions are shaky, and Congress is delaying much-needed reform of the Social Security system."
"Congress is facing even greater challenges today. The longer we wait, the deeper the cuts might have to be. If we start now, changes can be much smaller and phased in over a longer period of time giving time to adjust," Smith says. "If we continue to put off fixing Social Security and Medicare, we may be giving birth to the next generation of Notch Babies," Smith declares. "We urge seniors to contact their Members of Congress to demand a plan for reducing the deficit and protecting Social Security and Medicare," Smith concludes.
TSCL is a national group of politically active seniors concerned about the protection of their earned Social Security, Medicare, military, and other retirement benefits. TSCL members participate in a number of grassroots lobbying and public education campaigns designed to ensure governmental bodies, including the Social Security Administration and the Centers for Medicare and Medicaid Services, live up to their commitments. For more free information on this issue and our organization, please contact TREA Senior Citizens League, Department S706M, 909 N. Washington St., Suite 300, Alexandria, VA 22314, or visit our website at: www.tscl.org.
(1) Social Security Reform: Analysis of a Trust Fund Exhaustion Scenario, Statement of David M. Walker, General Accounting Office, July 29, 2003.
(2) Announcement Speech of David M. Walker to the National Press Club, General Accounting Office, August 28, 2003. Distributed by The Senior Exchange, Inc.
Serving The Mature American With Timely, Low-Cost, Self-Help Information September 2003
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