What Seniors Need to Know About the Sequester
Federal budget discussions lead one to wonder what generations of the future will think of the many terms we use to describe the ever changing landscape in Washington or whether maybe future generations will continue the debate with expressions of their own.
So far, recently, we have undergone discussion of the debt ceiling, the “fiscal cliff,” and then the “sequester.” If we have not yet had enough, the next discussion appears to be on a proposed “continuing resolution” quaintly described as the CR.
All of these things do have consequences. The debt ceiling crisis resulted in downgrading the U.S. credit rating for the first time in its history. The “fiscal cliff” was avoided by a compromise. We are now a few days into the “sequester” and it has been implied, at least, that a “continuing resolution” might, if agreed upon, keep the government running since, without it, there could be another government shutdown on March 27, 2013 as occurred in 1995.
The sequester does have a serious effect but, as we are repeatedly told, it would phase in gradually. Sequester was supposed to be a result so radical, so extreme, that both parties would be forced to compromise. Apparently aversion to compromise was underestimated. Beginning March 1, under sequester, $85 billion is to be cut half from military programs and half from domestic. What kind of arrangement would be made with a continuing resolution is still unknown. This is what seniors need to know about sequester.
Social Security. Social Security benefits are not to be affected. Also Veterans program benefits are to continue as is. However, the staffing for these agencies would be reduced. Federal government furloughs have been discussed for some time. Calls to the Social Security 800 number could be further delayed, field offices could be reduced in staffing or closed, checks for first time Social Security recipients could be delayed and a further backlog in claims can be expected.
Medicare. Again, Medicare benefits are not to be affected or reduced. However, there would be across the board cuts to Medicare providers by 2%. Because of reductions and prior warnings of reductions, some medical practitioners could opt out of providing services to Medicare patients. If the sequester issue is resolved, one of the budgetary solutions that had been considered might further reduce payments to practitioners so it is important, even if sequester ends, that Medicare payments to providers be followed as an issue for seniors.
Domestic programs. Domestic programs most directly impacted would include Meals on Wheels, federal energy assistance with programs like LIHEAP, and caregiver support programs.
Investments. No one knows how a lengthy sequester would affect investments. Some believe that continued gridlock in Washington combined with a decline in domestic production as a result will have a significant impact on investments. Others believe investments would not be affected. It would seem that at least some areas of the economy would take a hit. For instance, investments related to defense – the other area charged with sizeable cuts – could take a downturn but all of this is speculative.
Services. Those who remember the government shutdown in the standoff between Bill Clinton and Newt Gingrich in 1995 will remember, for instance, that national parks were affected. Cuts in the area of park rangers and park hours and services could be anticipated also this time. Also, air travelers, in particular, may be delayed with reduction in hours and numbers of TASA employees for screening.
Reduced hours for federal employees in several departments could result in frustration. Consideration must also be given to the fact that there are those seniors who are still employed in federal government positions who would take an unexpected pay reduction.
What is the Continuing Resolution? Instead of an ongoing budget, the government is currently running on a continuing resolution that is scheduled to expire March 27. In order for the federal government to continue operating, Congress will need to pass another continuing resolution. This could conceivable take it through the end of the fiscal year September 30. It still does not resolve the sequester.
The original thought was that Democrats would be so committed to avoiding cuts in domestic spending and Republicans would be so committed to avoiding cuts to the U.S. military, that the parties would come together and work out a solution. We are still waiting for that solution and possibly at the point that the public generally begins to feel the strain associated with the cuts the answer will arrive.
For more, listen to “50+ Planning Ahead” a weekly radio program on WCHE 1520 on every Wednesday from 4:30 pm to 5:00 pm with Janet Colliton, Colliton Law Assocs., PC, and Phil McFadden of Home Instead Senior Care.
About the Author Janet Colliton
Esquire, Colliton Law Associates, P.C. Janet Colliton has practiced law for over 38 years, 37 of them in Chester County, Pennsylvania, a suburb of Philadelphia. Her practice, Colliton Law Associates, PC, is limited to elder law, Medicaid, including advice, applications and appeals, and other benefits planning including Veterans benefits, life care and special needs planning, guardianships, retirement, and estate planning and administration.