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Important Benefit Programs Could Face Cuts

Automatic cuts to Social Security and Medicare could be coming under a proposal in Congress. (401(k) 2012/Flickr)
Automatic cuts to Social Security and Medicare could be coming under a proposal in Congress. (401(k) 2012/Flickr)
December 21, 2016

DES MOINES, Iowa – New budget rules proposed for Congress could bring deep, automatic cuts to benefit programs for seniors that had been exempt from those kinds of cuts until now. House budget chair Tom Price has said he would like to see reductions in Social Security and Medicare benefits.

David Reich, a senior fellow with the Center on Budget and Policy Priorities said Price has proposed strict caps on all spending that would kick in if the deficit goes up, even due to tax cuts. And Reich said unlike past budget battles, it looks like Price wants Social Security and Medicare on the chopping block.

Reich asked, "What if Congress decides to enact large additional tax cuts? His document said we really shouldn't exempt anything."

Price is very opposed to many kinds of federal spending, and has said the government cannot afford current programs. President-elect Donald Trump selected Price to be his Secretary of Health and Human Services.

Reich said Price's proposal is slanted strongly in favor of tax cuts, even to the extent of possibly cutting seniors' benefits to pay for them. Medicare and Social Security are both popular, and have their own dedicated sources of revenue. As a result, they have been largely exempt from recent congressional tax and spending fights. And Reich said under the current "pay as you go" budget rules, Congress does not allow itself to increase spending or cut taxes without offsetting the cost. He said Price would break both precedents.

"In place of that, he has this whole series of restrictions on spending only," he added. "None of them operates on the revenue side at all."

Trump has said he wants to cut corporate and individual taxes. Analysts have said his plan would increase the deficit and mostly benefit the wealthy. Trump also has said he would oppose Social Security benefit cuts. But Reich said one problem with automatic reductions is they bypass much of the normal debate.

"You wouldn't say, 'Well, this is how we want to change Medicare' or 'how we want to change Medicaid' or veterans benefits," he said. "And indeed the limits could be set very low, to try to force reductions."

It's unclear what will happen to Price's proposed legislation if he moves to the executive branch. Reich said in any case, it may face opposition in the Senate.

Mary Kuhlman, Public News Service - IA