What Does the Latest Budget Deal Mean for Seniors?
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What Does the Latest Budget Deal Mean for Seniors?

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October 21, 2013

The federal government is back to work, and the debt ceiling has been raised. But what about the Affordable Care Act and deep sequester cuts to programs? See what's in the latest budget deal.

Appropriations

Congress provided short-term funding for federal government programs through a continuing resolution (CR) through Jan. 15, 2014. The level is the same as FY13, a post-sequester amount totaling $986.3 billion.

On Jan. 15, an “enforcement sequester” will kick in, triggering another round of indiscriminate across-the-board cuts if appropriations aren’t reduced to fit under the FY14 cap of $967 billion or the sequester isn't eliminated or pushed back.

States and local areas soon will be able to draw down Older Americans Act (OAA) dollars, but some programs that had to shut down or scale back services may not be up and running at full capacity immediately.

Social Security

Offices should be able to offer the full gamut of services, and Congress provided another $470.6 million for administration.

Debt Limit

The legislation gives the President authority to raise the debt limit until Feb. 7, 2014. During this period, Congress would have to vote to actively prevent an increase.

After Feb. 7, the Administration would retain its current flexibility to take “extraordinary measures” to delay hitting the debt ceiling, and it’s unclear whether a new limit would be reached in a matter of weeks or months. At that point, it would be up to Congress to raise the limit again.

For now, sufficient resources are available to continue paying Social Security and Medicare benefits, as well as other government obligations.

Affordable Care Act

Despite demands to repeal or delay the Affordable Care Act (ACA) in exchange for keeping the government open, none of these provisions were adopted. The medical device tax, reinsurance tax, and employer contributions for those in Congress and the Administration who are now required to participate in the exchanges all remain intact.

However, the bill does include a provision to strengthen ACA provisions regarding income verification for those seeking subsidies to help cover the cost of their health insurance.

What’s Next

The agreement provides for the long-delayed conference committee negotiations to craft a compromise FY14 budget resolution between the House and Senate versions passed earlier this year. The House and Senate proposals remain far apart. For example, the Senate included $1.85 trillion in deficit reduction, split evenly between spending cuts and revenues, while the House included $4.6 trillion in spending cuts alone. 

The committee has a deadline of Dec. 13 to come up with an agreement on the total level of spending for the upcoming year and potentially also craft measures to replace all or part of the sequester and address larger debt and deficit issues.

House committee member include: Reps. Ryan (R-WI), Cole (R-OK), Price (R-GA), Black (R-TN), Clyburn (D-SC), Van Hollen (D-MD), and Lowey (D-NY).

Senate members are: Sens. Murray (D-WA), Wyden (D-OR), Nelson (D-FL), Stabenow (D-MI), Sanders (I-VT), Whitehouse (D-RI), Warner (D-VA), Merkley (D-OR), Coons (D-DE), Baldwin (D-WI), Kaine (D-VA), King (I-ME), Sessions (R-AL), Grassley (R-IA), Enzi (R-WY), Crapo (R-ID), Graham (R-SC), Portman (R-OH), Toomey (R-PA), Johnson (R-WI), Ayotte (R-NH), and Wicker (R-MS).

It remains unclear what progress will be made. Democrats and some Republicans will want to eliminate or push back the sequester. However, Speaker Boehner recently reiterated that tax cuts will not be on the table.

Democrats had been united on a “balanced package”—against a grand bargain that would impose greater spending cuts without revenue increases. There are concerns, however, that there may be support for delaying the sequester by about two years and pay for it through cuts in mandatory programs like Social Security, Medicare, Medicaid, or SNAP (Food Stamps).

There is no penalty or new budget enforcement mechanism if the committee doesn’t issue a proposal by Dec. 13. However, without an agreement, we will return to yet another scenario with a potential government shutdown looming in mid-January and a default in ensuing weeks.

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