Since the signing of the Budget Control Act of 2011, the Act which includes the increase in the national debt ceiling, senior advocates have been working to determine its effect on programs including Medicare, Social Security and Medicaid.
Congress has voted to raise the debt ceiling 10 times since 2001. The ceiling was raised in 2002, 2003, 2004, 2006, 2007 and twice in 2008. Why all the debate this time around? One side was insisting on reducing spending by cutting federal assitance to programs like Medicare, Medicaid, and Social Security to decrease the defecit, while the other was insiting on an increase in revenue (read taxes) while maintaining those programs. Many questions remain on whether funding for senior programs will continue or in what amounts.
The Act’s Impact on the Future
There are still many questions left unasnwered regarding what impact the Budget Control Act will have moving forward. The Act consists of three steps:
The national debt ceiling is going to be raised $400 billion initially. The President also has the option to institute an additional increase of $500 billion moving forward. Congress is slated to reduce spending by $917 billion over the next 10 years. In 2012, $21 billion is to be cut from federal spending. Many people do not seem overly concerned with the scheduled reduction for 2012 because budget reduction occurs frequently and legislation is often amended.
A Joint Select Committee on Defecit Reduction is to be put together of 6 Democrats and 6 Republicans. The Committee must come up with debt reduction legislation on or before November 23 of this year. Their goal is to cut $1.5 trillion dollars of debt over the next 10 years, with a required reduction of at least $1.2 trillion. Any proposal the Committee creates will be voted on by Congress before the end of 2011, and many speculate will include cuts to Medicare, Medicaid and Social Security spending.
If no plan is put in place to reduce at least $1.2 trillion over 10 years, whether Committe member do not agree or Congress refuses to pass their proposal, there would be sweeping federal spending reduction. The reducution would equal the full amount, up to $1.2 trillion, that can not be agreed upon by the Reduction Committe and Congress. Medicaid, Medicare, and Social Security as well as veterans’s benefits are all protected from large spending reduction if the process reaches this stage.
What Can You Do Today ?
No on knows how these reduction will effect senior programs such as Medicaid, Medicare, and Social Security. One thing is clear, the future is alot less certain. To take steps to protect your spouse, home and life savings today register online to attend a free educational workshop hosted by Dennis B. Sullivan, Esq, CPA, LLM or by calling 800-964-4295 (24 hours a day). You can also check out Free Elder Law Guides developed by the team of professional at Dennis Sullivan & Associates. By planning now you can save you and your family the stress of having to worry about the future.