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How Drastically is Soc Sec & Medicare Cut in the Cliff? What''s worse for seniors?
going off the cliff or Boenher's/GOP recommendations???
- Husker41Lv 78 years agoFavorite Answer
For those already retired, neither alternative will make much difference immediately. In the longer run, going over the fiscal cliff is almost certain to bring on another recession - perhaps even a depression - and the GOP plan would cut retiree benefits unnecessarily. It's a choice between two devils.
I'm hoping the White House/GOP negotiations will come up with something better. In the short run, simply extending the current tax provisions would be far better than either alternative above, but more work on the problem would be needed next year. This is sometimes referred to as "kicking the can down the road".
The Fiscal Cliff:
The laws leading to the fiscal cliff include the expiration of the Bush tax cuts and planned spending cuts under the Budget Control Act of 2011. This law was enacted as a compromise to resolve a dispute concerning the public debt ceiling. Some major programs, like Social Security, Medicaid, federal pay (including military pay and pensions), and veterans' benefits, are exempted from the spending cuts. Spending for defense, federal agencies and cabinet departments would be reduced through broad, shallow cuts referred to as budget sequestration.
— Income tax rates rise for virtually all Americans. The 2012 individual marginal rates of 10, 15, 28, 33 and 35 percent revert to the pre-Bush-era levels of 15, 25, 28, 36 and 39.6 percent.
— The withholding rate on the payroll tax that finances Social Security reverts to 6.2 percent from the current reduced rate of 4.2 percent for the first $110,110 of a worker's salary. The Wall Street Journal notes: "For someone earning the 2011 median income of $50,054 that translates into $1,001.08 a year or about $40 less in a biweekly paycheck." The tax "holiday" had been in effect for two years.
— The estate tax rises to 55 percent for an inherited estate worth more than $1 million. In 2012, it's 35 percent and only applies to inheritances exceeding $5 million.
— The tax on dividends more than doubles from 15 percent to 39.6 percent.
— The tax on capital gains rises to — depending on income — somewhere between 10 and 20 percent, from a range of 5 to 15 percent in 2012.
— About 2 million Americans lose unemployment checks as long-term unemployment extensions expire.
— Payment to physicians treating Medicare patients are cut 27 percent as annual "doc fix" expires. Congress routinely creates a "fix" to adjust physician reimbursements to something close to the going rate for medical service, rather than a 1997 reimbursement formula.
The GOP PLAN:
No details available on the latest GOP proposal sent to the White House, but Senate Republican leader Mitch McConnell said ... Republicans want to curtail annual cost-of-living benefits for Social Security and other government benefits, as well as raise the age of eligibility for Medicare from 65 to 67 beginning at some point in the future.
The 2012 individual marginal rates of 10, 15, 28, 33 and 35 percent would remain in place for another year.
Previous GOP plans would reduce Medicare & Social Security benefits significantly, but mostly by freezing things at current benefit levels for existing retirees, and giving less in the way of benefits to future retirees.
- ?Lv 45 years ago
The GOP thinks all previous each body is like Ronald Reagan, suffering from Alzheimer and could no longer bear in mind who reduce their reward come 2014. it extremely is wishful questioning. Social safe practices heavily isn't damaged yet Medicare might want to apply a strengthen, shall we only have immigration reform and positioned 10 million new workers on FICA, clean up 2 problems with one bill. raising the Medicare age gained't help. those elderly sixty 5 are the healthiest contained in the entire team, take them out and it is going to strengthen the cost for those final. duh. possibly in a decade Obamacare may strengthen up a technology of seniors that are in good structure than they are literally and it may bypass. the cost of residing doesn't strengthen if congress manages the commercial device and inflation. what he proposes is an get away valve for poor congressional over sight. make the seniors pay if the republicans supply us Reaganesque double digit inflation.
- oldmanLv 78 years ago
It's my understanding that whatever happens will not change much for the poor and disabled presently receiving benefits, though I can't swear to that. It is my understanding the primary change that would happen to those two groups is the way future COLA's would be figured. It would simply be too unpopular with too large a contingency, to mess much with the benefits of present recipients. It is those coming up in the future who will see the biggest change. Those young people complaining now about us receiving these benefits, may be blessed with not receiving them when they get our age. How fitting.
- Dave MLv 78 years ago
Problem is when your retired & a senior - there is usually very little you can do about your situation - some seniors are able to find a part time job to supplement but - as everyone knows it takes a certain amount of income to live - keep a roof over your head and a meal at least a couple times a day.
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- ?Lv 78 years ago
Too much talk and misinformation by a toxic media now, you need to just turn off the news and wait and see what, if anything happens.
- ?Lv 68 years ago
I won't know until I see something happen. So far it's nothing but talk and most of that's misinformation.
- BizarczarLv 58 years ago
We wont know until we get that little piece of paper in the mail.