Congress Nibbles at Obama's Budget

Now it's Congress' turn.

Last week President Obama made his budget proposal, and lawmakers on Capitol Hill already have begun trying to bend it to their will.

On April 18, in fact, the House Ways and Means Committee will take up one of the most controversial pages in the budget book: the proposal to change the way that benefits under Social Security and other federal programs are adjusted for inflation. The "chained consumer price index," or chained CPI, would mean less-generous cost-of-living adjustments for the future.

Republicans say they like the idea because it will help reduce the federal budget deficit.

But Obama is having trouble winning over his own party to the idea, which he said is part of a series of compromises aimed at reaching "a grand bargain" to address the deficit.

Reps. Alan Grayson (D-Fla.) and Mark Takano (D-Calif.) have gotten 37 lawmakers to sign a pledge against the chained CPI and other benefit cuts.

"Voters across the political spectrum oppose cuts to Medicare, Medicaid, and Social Security benefits, and we must do whatever it takes to protect these vital benefits from cuts," the pledge says. "That's why we write to let you know that we will vote against any and every cut to Medicare, Medicaid, or Social Security benefits - including raising the retirement age or cutting the cost of living adjustments that our constituents earned and need."

The pledge borrows a tactic used successfully by Republicans to rally members against tax cuts. The success of that idea, though, revolved around conservative Grover Norquist's influence in reminding politicians of the pledge when difficult votes arose.

One Obama budget idea that's getting more support among Democrats is paying drug makers less for brand-name medications prescribed to low-income seniors.

To participate in Medicaid, drug makers are required to give the federal government a rebate that's sort of like a volume discount. The Medicare program doesn't get the same discounted rate. The Medicaid discount doesn't apply to patients who are eligible for both programs. Bills in both the House and Senate would require drug makers to pay rebates totaling about $140 billion over the next 10 years for these " dual eligibles." Sen. Jay Rockefeller (D-W. Va.) says his legislation is aimed at "putting low-income seniors and people with disabilities before pharmaceutical profit."

The pharmaceutical industry, however, has successfully fought off the proposal for years. In a statement, Matthew Bennett, senior vice president of Pharmaceutical Research and Manufacturers of America, disparaged the idea as nothing more than " mandatory government price controls."

 

Also of Interest

• Obama's Budget Aims to Expand the Estate Tax
• 4 Ways Obama's Budget Would Change Medicare
• Join AARP: Savings, resources and news for your well-being

 

See the  AARP home page for deals, savings tips, trivia and more