The Obama administration's proposal on Social Security
Mar 22, 2012, 9:02 a.m.
Seniors are paying special attention this election year to any presidential candidate who refers to Social Security benefits, but to date not much has been said by those running for this highest office. Social Security benefits have been cut in recent years with two eliminations of cost-of-living adjustments (COLA) raises. Now, President Obama has announced his plans to spare Social Security with his new 10-year plan.
Obama's 10-year plan includes about $3 trillion in deficit cuts while avoiding any changes in current Social Security or Medicare eligibility ages. Criticism of his plan is based mostly on the negatives of pitting one economic class against another. The Obama plan does include some cuts to Medicare that amounts to a savings of $248 billion and Medicaid cuts of $72 billion, along with tax hikes for "wealthy" taxpayers.
Currently, the top benefit paid under Social Security is $2,399 per month, and it is based on previous earnings and age of the recipient. Rising health care costs and general living expenses are causing seniors serious concern about their ability to meet future living costs and to maintain their standard of living. Seniors spend more of their income on medical care than do younger persons.
There is a bipartisan attempt to approve new cuts before 2013, when spending cuts will be automatically triggered. Changes included in the Obama plan would not take effect until after 2017, long after the next presidential term ends in 2016.
Proposed changes include:
- Reduced Medicare payments to certain individuals
- Increases in Part B Medicare deductibles (new beneficiaries only)
- Higher copay for home health benefits (new only)
- Surcharge for certain holders of Medigap insurance
- Higher premiums for wealthy persons and others for Medicare Parts B and D.
Other options that may surface this campaign year include adding a means test for determining benefits, slowing raising the age to receive benefits and changes in the way that COLA is calculated.
Any increase in Medicare costs or reductions in social security benefits are hot buttons for seniors, as many only have that benefit to rely upon for income. The Obama plan is expected to receive hot opposition because it relies upon tax increases for job creators to achieve its goals.
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