Supporting Our Nation's Seniors
Having emerged from the worst recession in generations, the President has put forward a plan to rebuild our economy and win the future by out-innovating, out-educating, and out-building our global competitors and creating the jobs and industries of tomorrow. But we cannot rebuild our economy and win the future if we pass on a mountain of debt to our children and grandchildren. We must restore fiscal responsibility, and reform our government to make it more effective, efficient, and open to the American people. The President’s 2012 Budget is a responsible approach that puts the nation on a path to live within our means so we can invest in our future – by cutting wasteful spending and making tough choices on some things we cannot afford, while keeping the investments we need to grow the economy and create jobs. It targets scarce federal resources to the areas critical to winning the future: education, innovation, clean energy, and infrastructure. And it proposes to reform how Washington does business, putting more federal funding up for competition, cutting waste, and reorganizing government so that it better serves the American people.
To support our Nation’s seniors, the Budget will:
Strengthen Social Security. The President recognizes that Social Security is indispensable to workers, people with disabilities, seniors, and survivors and is probably the most important and most successful program ever established in the U.S. Based on current forecasts, Social Security can pay full benefits until 2037. The President is committed to making sure that Social Security is solvent and viable for the American people, now and in the future. He is strongly opposed to privatizing Social Security and looks forward to working in a bipartisan way to strengthen social security for years to come. Guiding the Administration in these talks will be the President’s six principles for reform: any reform should strengthen social security for future generations and restore long-term solvency; the Administration will oppose any measures to privatize or weaken the social security system; while all measures to strengthen solvency should be on the table, the Administration will not accept an approach that slashes benefits for future generations; no current beneficiaries should see their basic benefits reduced; reform should strengthen retirement security for the most vulnerable, including low-income seniors; reform should maintain robust disability and survivors’ benefits.
Improve Medicare. The President recognizes that Medicare is a sacred trust with America’s seniors and supports policies that will strengthen the Medicare program and extend the life of the Medicare trust fund. The Budget proposes for $485 billion for Medicare spending in 2012, which reflects improvements made to Medicare in the Affordable Care Act (ACA). The Budget puts forward a robust set of proposals to reach the President’s goal of reducing improper payments in Medicare and strengthen Medicare program integrity more broadly. Additionally, it provides $581 million in discretionary program integrity funding to implement activities to reduce the payment error rate and enhance civil and criminal enforcement for Medicare, Medicaid, and CHIP. The Budget prioritizes effective implementation and application of program integrity tools and resources that were provided by the ACA, including enhanced provider screening and participation requirements, improved data analysis capabilities, expanded overpayment recovery activities, and enhanced law enforcement authorities. As a result, the Administration will be better able to minimize inappropriate payments, protect against fraud, and provide greater value for program expenditures to beneficiaries and taxpayers. In December, the Administration worked with Congress to offset legislation preventing an imminent decrease in physician payments and keeping these physicians in the system seeing patients. In the Budget, the Administration goes further and proposes to continue this level of payment, and offset the increase above current law for the next two years with specific health savings. Beyond that, the Administration is determined to work together to put in place a long-term plan to reform physician payment rates in a fiscally responsible way, and to craft a reformed reimbursement system that gives physicians incentives to improve quality and efficiency while providing them with predictable payments for the care they furnish to Medicare beneficiaries.
Protect Seniors from Abusive Financial Products. The Dodd-Frank Wall Street Reform and Consumer Protection Act established an Office of Financial Protection for Older Americans in the Consumer Financial Protection Bureau (CFPB) to facilitate financial education for seniors, help them make sound financial planning decisions and avoid unfair, deceptive and abusive practices. CFPB’s Office of Financial Literacy is authorized to make grants to State securities commissions for enhanced protection of seniors.
Reduce Funding for New Construction of Housing for the Elderly while Renewing Currently Assisted Units. In a constrained fiscal environment, the Administration had to make tough choices. The Budget provides a total of $757 million for the Housing for the Elderly Program, which is a $68 million cut relative to the 2010 enacted level. Preserving assistance to all existing units is the top funding priority, which the Budget achieves, and though there are reductions in new construction and expansion activities, the Budget still includes $387 million for them. The Administration is committed to working with Congress to update and reform these programs so that project sponsors can maximize use of the funding for new construction by effectively leveraging and targeting investments based on need and by providing residents access to key services required to age in place or live independently.
Help Families Care for Aging Relatives at Home. The Budget includes $96 million for the Administration's Caregiver Initiative, an effort to expand help to families and seniors so that caregivers can better manage their multiple responsibilities and seniors can live in the community for as long as possible. Without creating new programs, this initiative provides new resources to support the network of agencies in local communities across the country that already provide critical help to seniors and caregivers.
Establish Automatic Workplace Pensions. Currently, 78 million working Americans—roughly half the workforce—lack employer-based retirement plans. The Budget proposes a system of automatic workplace pensions that will expand access to tens of millions of workers who currently lack pensions. Under the proposal, employers who do not currently offer a retirement plan will be required to enroll their employees in a direct-deposit IRA account that is compatible with existing direct-deposit payroll systems. Employees may opt-out if they choose. The smallest firms would be exempt.
Double the Small Employer Pension Plan Startup Credit. Under current law, small employers are eligible for a tax credit equal to 50 percent (up to a maximum of $500 a year for three years) of the start-up expenses of establishing or administering a new retirement plan. To make it easier for small employers to offer pensions to their workers in connection with the automatic IRA proposal, the Budget will increase the maximum credit from $500 a year to $1,000 per year.
Increase Funding for Biomedical Research Including Aging Research. To accelerate progress in biomedical research, the Budget continues to support research both on the campuses of the National Institutes of Health (NIH) and for approximately 300,000 scientists and other research personnel at institutions across the country. Investments will focus on priority areas including genomics, translational research, technologies to accelerate discovery, enhancing the evidence base for health care decisions, and reinvigorating the biomedical research community. The Budget provides more than $2.5 billion to NIH aging research.
Reduce and Improve the Senior Community Service Employment Program. Because difficult choices had to be made in order to invest in programs that would yield the highest returns, the Budget reduces funding for the Senior Community Service Employment Program (SCSEP) by 45 percent. At the same time, the Budget transfers the program to the Department of Health and Human Services to improve coordination with other senior-serving programs. This change will not only create savings, but also improve program operations and allow SCSEP to better support not only employment outcomes, but also health, wellness, and independence for seniors.