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Market Oracle FREE Newsletter


While dismantling Obamacare, U.S. Congress aims for Social Security reform

Politics / Social Issues Dec 19, 2016 - 05:50 AM GMT

By: Michael_T_Bucci


Humans are woefully unprepared to deal with a surprise asteroid or comet, said NASA researcher Dr Joseph Nuth at the annual meeting of American Geophysical Union this month. Woefully, Americans are as unprepared to deal with the most ideologically driven reactionary Congress in this nation’s history that will convene on January 3 and decide the future of Obamacare, safety net programs, housing, EPA, Social Security, Medicare and Medicaid, among others.

In the elections of Nov. 8, Americans gave Republicans unified control of government. The policy and budget priorities of Congress promise to reflect a center-right conservative ideology for years to come.

The era of Roosevelt, the New Deal and the Great Society will come to an official end if Congressional Republicans follow the lead of budget technocrat and austerity czar House Speaker Rep. Paul Ryan and move forward with a demolition blueprint etched earlier this year.

As called it: “The incoming administration prefers to use its post-election momentum to repeal the 2010 health care law, roll back possibly hundreds of regulations and enhance security along the southern border.” Additionally, a debt ceiling deadline falls during President-elect Trump’s first 100 days and conservatives will pair deficit reductions plans with any increase.

Jared Bernstein wrote in the Washington Post last March that if the next president be a Republican, the consensus blueprint for the budget policies of today’s Republican Party “will intensify hardship for tens of millions of Americans.”

ACA (“Obamacare”):

The Center on Budget and Policy Priorities wrote December 7, Republican congressional leaders’ plans to repeal most of the Affordable Care Act in January without replacing it “will double the number of uninsured people” in 2019.

President-elect Donald Trump has vowed to repeal Obamacare swiftly upon taking office.

According to a brief by the Urban Institute on December 6, if the GOP adopts a plan similar to the reconciliation bill President Obama vetoed in January, almost 30 million more Americans will join 28.9 million now without insurance, bringing the total number of uninsured to 58.7 million, an increase of 103 percent.

Nationally, the increase in people uninsured will be a result of eliminating the premium tax credits, the Medicaid expansion, and the individual mandate as well as the near collapse of the nongroup insurance market.

Eighty-two percent of the people becoming uninsured would be in working families, 38 percent would be ages 18 to 34, and 56 percent would be non-Hispanic whites. Eighty percent of adults becoming uninsured would not have college degrees.

There would be 12.9 million fewer people with Medicaid or CHIP coverage in 2019 because state spending would fall.

Also, because of the larger number of uninsured, financial pressures on state and local governments and health care providers would increase dramatically from the newly uninsured seeking an additional $1.1 trillion in uncompensated care between 2019 and 2028.

While projected figures are theoretical and people can still seek enrollment in a private plan, many would not be able to afford it without the ACA subsidy and become uninsured.

Mrs. T.P., along with her husband and two children, will be among those New Englanders who will lose health care subsidies if ACA is repealed in the 115th Congress.

Her husband is a seasonal worker in the construction trade and she is an R.N. working per diem in a Maine hospital that does not pay for health care, or provide sick-time and retirement benefits. Based on the couple’s 2017 “predicted income”, they will receive nearly $300 per month in subsidy next year, which reduces their insurance premium to $600 per month for the family of four.

Without ACA subsidies their monthly premium will increase to $900 per month. “I can't really even decrease to a less expensive plan because it's already the rock-bottom plan,” she explained by email.

In the event ACA is repealed, “I will have to re-evaluate my job. I will need to decide if it would be better to leave a job I like and instead take a job I don't like just because it would offer insurance.” If she chooses to remain with her current employer, “I will have to cut other expenses or take from my savings to afford the insurance.”

“As a nurse, I know too well the importance of having insurance, even though it feels each month like I'm throwing away a substantial portion of my income with nothing to show for it,” she added. “I would end that sentence with ‘except for peace of mind,’ but with an annual deductible of $10,000, it doesn't really provide much peace of mind.”

While Obamacare is blamed for rising premium costs, congressional lawmakers have done nothing to lower the cost of pharmaceuticals and medical care as health insurance companies and their investors reap windfall profits.

But as Mr. Trump and GOP congressional leaders are charging forward with Obamacare repeal, few are eager to follow.

Noam M. Levey, writing for the LA Times (Dec. 12), finds not a single major organization representing patients, physicians, hospitals or others who work in the nation’s healthcare system backs the GOP’s Obamacare strategy. Furthermore, new polls also show far more Americans would like to expand or keep the healthcare law, rather than repeal it.


While media headlines revolve around “reforming”, replacing or repealing Obamacare, equal if not greater importance to 60 million Americans will be the coming debate on overhauling Social Security.

Most current retirees rely on Social Security for more than half of their income and future retirees are expected to rely even more.

Flexing muscle before the close of Congress in December, and telegraphing a coming “sea change”, Rep. Sam Johnson, R-Texas, chairman of the House Social Security subcommittee, introduced the “Social Security Reform Act of 2016”.

The bill’s innocuous subtitle reads, “To preserve Social Security for generations to come, reward work, and improve retirement security.” These will be Republican talking points that need proving in the coming days since the bill would slash SS benefits for all but the poorest beneficiaries, raise the retirement age to 69 and reduce the annual cost-of-living adjustment, according to a New York Times assessment.

Furthermore, the House Freedom Caucus, a contingent of far-right House Republicans, will push for a complete overhaul of SS and Medicare in the early days of the next Congress. “We’re hopeful to come up with entitlement reform and deficit reduction plans in the first 30 days,” House Freedom Caucus Chairman Mark Meadows, R-N.C., told RollCall.

According to the Washington Examiner, Meadows said the group of lawmakers came up with a 21-page report to give to President-elect Trump listing 232 rules and regulations he can repeal on his first day in office.

Pew Research Center states the group includes many veterans of the Tea Party movement and was formed with the declared aim of “pushing the House GOP leadership to the right.” Rolling Stone magazine in 2015 classified them as an “ideological and uncompromising band of anti-government radicals.”

Equal pressure will be exerted on lawmakers by the Christian Evangelical base of the Republican party which overwhelming voted for Donald J. Trump in the last election. Dr. Richard Land, president of Southern Evangelical Seminary, saw Trump’s victory as part of God’s plan for America — a divine intervention. Land told the Huffington Post, “This election will bring about the most change in the federal government in relation to its people since the election of 1932, and it will be in the opposite direction from the New Deal.”

During most of President Obama’s tenure, House Republicans have called for a dollar in spending cuts for every dollar increase in the debt ceiling.

“A prudent approach to reform would target the causes of the system’s shortfall with a mix of modest benefit cuts and modest tax increases,” argued the Times editorial board (Dec. 17). However, Johnson’s bill would not raise taxes but would cut taxes that high earners now pay on a portion of their SS benefits.

House Democratic Caucus Chairman Joseph Crowley of New York cautioned that Republicans are “playing with fire” if they think they can make drastic cuts to entitlement programs like Social Security or Medicare.

President-elect Trump pledged to protect Social Security but his promises often contradict each other. Trump has no government experience nor any past voting record that can be used as a guide on how he will treat Republican bills aimed at slashing entitlement programs.

By law, the trustees of Social Security are secretaries of Labor, Treasury and Health and Human Services. Trump’s nominee for Labor is Andrew Puzder, CEO of CKE fast food restaurants Hardee’s and Carl’s Jr.; Treasury nominee is Steve Mnuchin, a former Goldman Sachs partner and now CEO of Dune Capital, a hedge fund. Neither has government experience nor expertise on Social Security.

“Puzfer's nomination will likely result in lower wages and longer hours for millions of Americans,” wrote Eric Reed for Labor Department auditors found 60% of Puzder’s restaurants with wage and hour violations. New York’s Attorney General accused Puzder of presiding over a fast-food chain “that repeatedly stole workers’ hard earned wages.”

Mnuchin is best known as leader of a group that bought failed subprime lender IndyMac for pennies on the dollar in 2009 and renamed it OneWest, explained CNN Money (Nov. 30). Regulators questioned OneWest’s foreclosure practices and “robo-signings” that pushed homeowners into foreclosure without proper review or due process. In November,  the bank was accused of discriminating against minority borrowers during Mnuchin’s tenure there.

The third trustee of Social Security is the Secretary of the Department of Health and Human Services. Trump’s nominee is Rep. Tom Price, R-Ga., who, according to the Times, “has been a champion of cuts to all three of the nation’s large social programs — Medicare, Medicaid and Social Security.” When discussing reforms to Social Security, he has ignored ways to bring new revenue into the system while emphasizing possible benefit cuts through means-testing, private accounts and raising the retirement age.

President-elect Trump and congressional Republican leaders are planning to merge proposals on tax reform next year and “ramming them through Congress with a budget process that would defy Democratic resistance,” cautioned Business Insider (Dec. 13).

According to the Center for American Progress, if Congress passed Trump’s proposed tax cuts, for example, the ensuing rise in debt would trigger automatic spending cuts that would slash Social Security by $1.7 trillion over 10 years,  This works out to a cut of $168 a month on the average monthly benefit of $1,240. If other Trump priorities were enacted, the program cuts would be even deeper.

Republicans have tried to dismantle Social Security ever since President Roosevelt proposed it during the Great Depression, and dismantle Great Society programs ever since LBJ left the Oval Office in 1969.

(Michael T. Bucci is a retired public relations executive. He has authored nine books on practical spirituality and is a contributing opinion writer for a New England regional newspaper.)

© 2016 Michael T. Bucci

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