Leading Aging Organization Says Proposed Budget Falls Short

February 13, 2003

Scott Parkin, (202) 479-6975
Scott.parkin@ncoa.org

WASHINGTON, D.C. -- A coalition of 50 national membership organizations representing more than 40 million senior citizens asserted that the Administration’s proposed fiscal year (FY) 2004 budget falls short of ensuring economic and health security for older Americans.

James P. Firman, chair of the Leadership Council of Aging Organizations (LCAO), said that "Freezing senior programs such as Meals-on-Wheels, Family Caregiver Support, elder abuse prevention and home care fails to adjust for inflation or growing needs, and comes at a time when states are cutting these kinds of services. If such federal and state cuts are enacted this year, millions of America's frailest seniors will suffer."

"The fiscal impact of the permanent tax cuts proposed by the President would rise dramatically over time, just as the pressure on Medicare, Social Security and other programs for older Americans will increase in order to meet the growing needs of the Baby Boom generation," according to Firman, who is also President and CEO of the National Council on the Aging. "Our understanding is that the 10-year cost of the tax cut proposal would be $1.46 trillion, not including lost interest on the debt. A tax cut of this magnitude would put senior programs at serious risk."

Health Care

Administration officials have stated that beneficiaries who remain in the traditional fee- for-service Medicare program will not receive prescription drug coverage. The LCAO objects to this. All Medicare beneficiaries need and deserve a drug benefit. In addition, we believe that $400 billion is insufficient to provide affordable, meaningful prescription drug coverage. The money can and must be allocated to provide access to continuous, reliable prescription drug coverage for all Medicare beneficiaries, with affordable premiums and coinsurance.

The LCAO is deeply concerned about the Administration’s Medicaid proposal. It is our understanding that the proposal would permit states to participate in a reformed program that would block grant and cap federal Medicaid spending for optional beneficiaries and services. Eighty-three percent of Medicaid spending on seniors is for optional services or beneficiaries. The LCAO opposes capping or block granting the Medicaid program. We support increasing flexibility and access for home and community services, and appreciate the Administration’s New Freedom Initiatives in this area. LCAO also supports a temporary increase in the federal Medicaid match to help states continue to serve millions of vulnerable low-income older Americans.

Social Security

It is estimated that Social Security will experience a shortfall in approximately 2041. Record deficits mean that the federal government is not saving for Social Security’s future. In fact, it’s borrowing from it. If this continues, the next generation will be forced to foot the bill.

While the LCAO believes the Social Security shortfall is manageable and can be corrected without drastic changes such as partial privatization, solutions will be much harder to come by without sufficient federal resources. Making sure that these funds are available should be of the highest national priority. Therefore, the LCAO is disappointed that the budget fails to acknowledge this imperative. Instead of reserving funds for Social Security’s long term solvency, the budget emphasizes large tax cuts. This puts Social Security at risk - a risk that could be avoided by rearranging priorities and reallocating precious resources.

Community Services

The President's proposed budget freezes funding for programs and services under the Older Americans Act (OAA), including home and community-based services, meals, family caregiver support, preventive care, and employment and training for older people who are able to work. Funding for these services has not kept pace with inflation and the growing aging population. At a time when older Americans are the fastest growing population segment, we should be expanding senior programs -- including section 202 senior housing and Senior Corps programs -- not freezing them. The LCAO supports increasing OAA funding by 10 percent. By fully funding OAA services and planning ahead for the needs of our growing elderly population, we can help keep seniors independent and avoid unnecessary and costly medical and institutional care.

The President's budget continues the trend in recent years to weaken the Social Services Block Grant (Title XX) by funding it at only $1.7 billion. The LCAO supports restoring funding to $2.4 billion. SSBG is a vital and flexible source of funding for services to older people. In particular, it is the single largest source of federal funding for adult protective services, which funds state programs to prevent elder abuse and provide emergency services and shelter to those elderly who are abused.

The LCAO will continue to work with Congress and the Administration this year to see that appropriations for these important services are adequate to meet the needs of America’s seniors and their families that care for them.

The Leadership Council of Aging Organizations is a coalition of 50 national nonprofit organizations concerned with the well-being of America’s older population and committed to representing their interests in the policy-making arena. LCAO’s Web site is www.lcao.org.

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