Obama’s Recent Budget Proposal Tough on Seniors

Barack Obama’s most recent budget proposal may not betoo popular amongst senior citizens. According to Merrill Matthews, “ifCongress were to pass the president’s budget, seniors would have less money andworse health care, and pay more for the ‘privilege.’” 

In orderto slow the growth of federal spending, Obama proposes social security cuts,medicare cuts, estate tax hikes, and 401(k) tax hikes.  To “cut” social security, Obama would reduceseniors’ annual cost of living adjustment (COLA), which is an increase inSocial Security payments that reflects inflation.  Known as the “chained CPI,” this measurepurports to save $130 billion over 10 years. Additionally, Obama’s proposal cuts over $300 billion to MedicareAdvantage plans and over $300 billion in reimbursements to Medicare providers.  The budget proposal would also increase theestate tax to 45 percent, hoping to save around $79 billion.  The proposal also tackles 401(k) retirementsavings, placing a $3 million cap on tax free retirement savings and requiringnon-spouse beneficiaries of 401(k) accounts to withdraw within five years,which would save an estimated $14 billion over 10 years.  Although these figures may be alarming toseniors, this budget proposal is unlikely to be passed.

See MerrillMatthews, Obama to Seniors: It’s Time forYou to Pay, Forbes, Apr. 11, 2013.