For months we’ve been on the edge of our seats trying to figure out what Congress would do about the debt ceiling, and how their actions would affect the nation’s seniors. Finally, we can all breathe a quick sigh of relief … then go back to waiting. The recent debt deal did not raise taxes and it did not make the threatened cuts to Social Security or Medicare, but it does lay the groundwork for renewed discussion in the future. The AARP says the deal is mixed bag for older Americans, but not as bad as it might have been. Proposed cuts to Social Security and Medicare did not make it into the final bill. Of note, too, is that the proposed changes for calculating the Social Security Cost Of Living Adjustment (COLA) – a less generous formula that effectively cuts the benefit – did not make it into the final bill either. But in order to preserve these programs many other programs were slashed, including those emphasizing nutrition, senior job placement, and home and heating assistance. Nevertheless, the debt discussion was not put to rest, merely put on hold. One of the biggest results of the law is to create a congressional super-committee of six Democrats and six Republicans who must make significant budgetary recommendations by late November. By Christmas-time this year, Congress must act on these recommendations, or find a better solution, or else severe cuts will go into effect across both military and entitlements spending like Medicare and Social Security. For now, seniors can breathe a bit easier. But, clearly, the debt crisis has been postponed rather than resolved.
Reference: AARP (August 2, 2011) “Debt Deal: No New Taxes and No Social Security or Medicare Cuts – Yet