Most Americans, as well as the world at large, were keeping more than just an interested eye on the recent debt deal (or debacle). Note: I will refrain from writing what I really feel about it because: 1. What goes on the internet stays there forever; and 2. I don't want to confirm for any future lineal descendants that such words were even in my vocabulary (as in "I didn't know great-grandpa Krull was a sailor!" kind of words). Therefore, let's take a look at what the debt deal means to seniors, as far as we can tell.
In short, the deficit deal passed by Congress and signed by President Obama is a mixed bag for older Americans. From all appearances, Social Security and Medicaid will be protected from cuts (at least for the time being), but many other federal programs are likely to be trimmed.
For months we've been trying to figure out what Congress would do about the debt ceiling, and how their actions would affect the nation's seniors. While the recent debt deal neither raises taxes nor make cuts to Social Security or Medicare, it does lay the future groundwork for renewed discussions as the national debt continues to swell. It is not a matter of if it will pop, but when.
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. However, to preserve these programs, other programs were necessarily reduced. No one has yet to locate the money tree.
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, find a better solution, or else cuts will go into effect across both national defense (one of the few enumerated constitutional functions of the federal government) and add-on entitlements, like Medicare and Social Security.
Bottom line: The debt crisis has been postponed rather than resolved. When it comes to national priorities, the traditional question has been "guns or butter." At present, we have money for neither... other than what we can borrow.
Reference: AARP (August 2, 2011) "Debt Deal: No New Taxes and No Social Security or Medicare Cuts – Yet"
