Last week, we discussed how the poverty level in the United States is stubbornly high and the threats that we face going forward with our current fiscal spending.
The spending bill passed by the US House of Representatives and now being amended by the US Senate had elements that appeared to save money by cutting Medicaid (health insurance to financially challenged Americans) massively over the next decade. While some cuts would take effect in 2026, the insurance industry and some political think tanks are projecting that by 2034 some 7.5 million Americans would lose coverage.
If this is even remotely accurate, many cash strapped hospitals, particularly in rural areas, would have to close. This means that overtaxed emergency rooms would face a dire existence, and overall public health would suffer tremendously.
Why is congress looking at cuts in Medicare/Medicaid? The answer is simple. That, along with Social Security, which we will discuss shortly, is where the big money is in our budget. Most Americans do not get this. Over the years, several well-intentioned people have told me that to balance the budget all we have to do is cut defense spending. How naïve they are! This year, our interest on the national debt is higher than the defense budget and will soar if the current deficit laden proposal goes through.
Other people tell me simply “tax the rich” Make the billionaires pay more, they say. Okay, but there are not enough billionaires to cover the trillion-dollar deficits that the US government runs up most years. To balance the budget would require two unpopular actions:
1) Cut spending
2) Raise taxes on the upper middle class as well as the wealthy.
Neither seems politically viable given the present mindset.
Okay, besides Medicare/Medicaid, a huge crisis is brewing with Social Security. Both the office of Management and Budget and many, many analysts have been warning all of us that Social Security will go into serious deficit by 2034. The most prevalent projection is that, with the current system, benefits would be cut across the board by 24% in nine years. To some of us, the cut would be annoying but not affect what we eat for breakfast.
However, here a few chilling facts from the Social Security Administration itself.
Among Adults 65+ who are collecting the monthly payments, 39% of men and 44% of women find that social security is 50% or more of their income. Yet, it gets worse. Some 12% of men and 15% of women are in the unfortunate position of Social Security being 90% of their income. A 24% cut would drop many from a lower-income life into dire poverty.
Congress, as the media like to say, simply “kick the can down the road” and the years tick by. The longer they wait, the more draconian the adjustment will have to be to keep the integrity of the present system. Some type of means testing will have to be done where those making several million a year plus, may get the payments, but it will all be taken away when they file their 1040 with the IRS. The upper middle class will also likely need to take some kind of reduction.
While putting these two posts together, sometime sent me a note saying “Jesus said the poor will always be with us. Why are you so worried about these two issues”?
Why? We are Americans and should do better than this.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
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