In a surprising piece of good news, the usually dysfunctional Congressional leadership came to an agreement with President Obama on legislation that would prevent a government default and enact an overall budget that increases some spending and raises revenues. Ironically, this seemed only to be possible once House Speaker John Boehner had announced his resignation and his job was in jeopardy of an overthrow by the so-called Freedom Caucus of conservatives. Those conservatives will likely vote against the deal but Boehner is free to bring it to the floor where he will get more than enough Democrats to support it to win easy passage.
I have previously reported on the threat to the Social Security disability trust fund which was schedule to run out of money in 2016. It will now be allowed to borrow from the Social Security retirement funds and extend the disability fund until 2022. There will be some minor cuts in the program resulting from changes to encourage disabled persons to work and requiring a doctor to examine applicants for the benefits.
The budget legislation also averts the large increase in Medicare Part B premiums for the 30% of beneficiaries who were going to see those premiums rise from $105/monthly to $159/monthly. The legislation allows an increase to only $120/month. This increase will not apply to most Social Security recipients who, by law, cannot see their benefits decrease because of increased Medicare premiums. Since Social Security officials recently announced there will be no cost of living increase in 2016, the Medicare Part B premium cannot increase for 70% of beneficiaries. Also, the annual Medicare deductible will increase from $147 to $167 rather than the $223 that was going to take effect without the new legislation. General revenues will provide a “loan” to Medicare to pay for these changes which will be paid back with slightly higher premiums over five years.
All this shows that Congress can compromise and make changes that help people while also including some reforms that save money. As Senator Harry Reid said “We did what we should be doing, sitting down and talking through our differences.”
Referring to the Social Security disability trust fund dilemma, Nancy Altman, the president of Social Security Works, said, “The hostage has been released.”