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PERSPECTIVE
MARCH 2018
budgets.
Ways and Means staff
have wisely spent time working with the Social Security Administration, the Congressional Budget Office and others to refine cost projections surround- ing the proposal. These efforts could prove pivotal in terms of establishing an initial rebate formula and creating a transition period for future retirees impacted by the repeal of the so-called thirty-year rule.
Members may recall that
under the thirty-year rule, retirees with 30 or more years of substantial earn- ings under Social Security are exempt from the WEP. However, the new Social Security formula will be solely based on years of contribution into Social Security and puts an end to the thirty-year rule for future Social Security recipients.
“Heading into 2017 the feeling was that we’d see a bill containing the WEP reform proposal finally pass the House, if not the
Senate as well. The right people are on board and the support is there to act on the compromise pro- posal,” states Duhamel. “What no one could predict is that the circus- like atmosphere during the 2016 Presidential Campaign would not only continue, but become far worse. Chaos does not lend itself to much posi- tive work getting done.
“Between the battle over healthcare reform and then federal tax reform, Congress did not spend
much time addressing other issues in 2017. Very few bills were passed last year, which did not allow much opportunity to address issues such as WEP. Our hope is that now that those issues are largely resolved, the nuts and bolts work on WEP reform can move forward.”
As federal negotiations continue, members should look to MassRetirees.com and our weekly toll-free hotline for late breaking news.
ARE CUTS TO
MEDICARE / MEDICAID
LOOMING?
Federal Deficit & Budget Impasse Cause For Concern
the deficit. In fact, surplus tax revenue raised through Social Security is turned over to the general fund and I.O.U. issued to Social Security in return.
While Medicare is funded, in part, through the Payroll Tax, the program does rely on some general appropriations. Congress also sets the rate of reimbursement for Medicare providers, that could be directly impacted by budget cuts.
Medicaid, which is entirely funded through the general appropriations budget, is most vulnerable to cuts and program changes. In addition to providing health insurance to the poor and millions of chil- dren, Medicaid also provides nursing home care for millions of retirees. The program operates as a partnership between the federal and state governments, which help
Please See Page 11 ☞
An important aspect of the new federal tax law is what impact the reduction in tax revenue will have on the federal budget. While Senate rules limited the anticipated deficit caused by the decrease in federal taxes to a loss of $1.5 trillion over ten years, many economists and independent analysis fear it may prove to be much higher.
Regardless of which projec- tions are correct, the fact remains that the federal gov- ernment will continue to take
in less tax revenue than it needs to support current spend- ing levels. This fact has resulted in new calls from House Speaker Paul Ryan (R- WI) and other conservatives for cuts to federal spending – including reforms to Medicare, Medicaid and Social Security.
Because Social Security is fully funded via the Payroll Tax, the program is not dependent upon general gov- ernment appropriation and does not (at least for the imme- diate future) contribute toward
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