A coalition of consumer and health care provider groups say that many of the across-the-board federal spending cut proposals before Congress would harm the elderly, children and low-income families.
AARP, the American Hospital Association, American Medical Association, American College of Cardiology and LeadingAge an association of 5,400 not-for-profit organizations that advocate for older Americans singled out the proposed Commitment to American Prosperity (CAP) Act as particularly harmful in a study released Wednesday.
This bill, according to an analysis the groups commissioned from the Lewin Group, would limit federal spending to about 20.8 percent of the gross domestic product [GDP] and automatically cut across all federal programs in any year when spending is projected to exceed the cap.
The analysis by the Lewin Group, a subsidiary of UnitedHealth Group, found that the CAP Act would cut $4.2 trillion from federal spending between 2013 and 2021.
That would mean potential cuts of $1.3 trillion from Social Security, $859 billion from Medicare and $575 billion from federal Medicaid payments to states during that period.
The report says:
• Cuts to Social Security and other income support programs would force 3.8 million people into poverty 2.1 million of them seniors, a 44 percent increase among this age group.
• 5.1 million individuals could lose their health insurance.
• Slashing fees for medical services could lead to fewer doctors participating in the Medicare program.
• Cuts to hospitals could force most to operate in the red, jeopardizing access to care.
The report looked at the CAP Act as a case study and didn't include breakdowns specific to Utah or any other states. But any cuts to Social Security would harm Utah's economy.
Laura Polacheck, AARP's associate state director, said one in 10 Utahns receives Social Security, which pumps over $334 million into the state economy each month. Nearly 20 percent of Utahns age 65 and over would have virtually no income without the benefit.
The bill was introduced in February by U.S. Sens. Bob Corker (R-Tenn.) and Claire McCaskill (D-Mo.) The co-sponsors were Sens Lamar Alexander (R-Tenn.), Richard Burr (R-N.C.), Saxby Chambliss (R-Ga.), Jim Inhofe (R-Okla.), Johnny Isakson (R-Ga.), Mark Kirk (R-Ill.), and John McCain (R-Ariz.)
The CAP Act sponsors say that by 2035, on our current trajectory, U.S. debt would reach 185 percent of GDP.
"If this occurs, interest payments on our national debt will reach nearly nine percent of GDP as much as we currently spend on national defense, education, roads, and all government agencies combined," says a statement from Corker's office.
The CAP Act could be part of any final deal to raise the current $14.3 trillion debt ceiling, but it's not the only proposal on the table. The Lewin Group report says similar consequences could result from any across-the-board measure that sets specific limits on spending. The groups are urging Congress to reject proposals that call for arbitrary spending caps.
"We cannot force our nation's most vulnerable citizens and their families to bear the brunt of federal budget deficit reduction," LeadingAge CEO Larry Minnix said in a statement. "It's unethical, unconscionable and unsound economics."
This week, the Congressional Budget Office said the nation's rapidly growing debt increases the probability of a fiscal crisis that could force drastic spending cuts.
Congress is negotiating whether to lift the debt limit to avoid a first-ever default on U.S. obligations. Vice President Joe Biden is leading the talks, with Democrats and Republicans fighting over domestic programs, especially Medicare and Medicaid.
Debt-ceiling fight ensnares them most vulnerable
Congressional negotiations about whether to raise the debt ceiling include calls to cut Medicare and Medicaid. But a study commissioned by advocacy groups says the cuts could cast vulnerable Americans into poverty, cause them to lose their health insurance and provoke doctors to turn away Medicare patients.