Martha McSteen, President
Max Richtman, Executive Vice
President
Robert Mahaffey, Executive Director,
Communications
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FOR IMMEDIATE RELEASE: |
CONTACT: |
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TAX CUT SIGNED
INTO LAW LIKELY TO BUST BUDGET, UNDERMINE MEDICARE PRESCRIPTION DRUG
CAMPAIGN Washington, D.C. – The tax bill signed yesterday by President Bush is unlikely to be less than the administration’s original tax proposal and it’s final cost may preclude significant investments in Medicare and Social Security, Martha McSteen, President of the National Committee to Preserve Social Security and Medicare said today. "With this tax bill, the President has chosen to provide upper-income taxpayers with significant refunds rather than use the budget surplus for prescription drug coverage for the millions of Medicare beneficiaries," she added. "The true cost of the final tax bill may be as much as $2.3 trillion over the next ten years, she noted, pointing to an analysis by the Center on Budget and Policy Priorities. This is significantly higher than $1.35 trillion Congress provided for under FY2002 budget resolution," she added. The tax bill comes amid mounting concern over the accuracy of current budget projections. Last month, House Budget Committee’s ranking member John Spratt (D-SC) pointed out to his colleagues the historic unreliability of long-term budget estimates. The past two decades have shown that budget realities are often far different than the projections of even the most unbiased forecasters. The Congressional Budget Office’s ten-year budget estimate has been off by as little as $1.8 trillion and as much as $5 trillion, Rep. Spratt wrote to colleagues. "If the budget surpluses do not materialize over the next 10 years, then the government will have to dip into the Medicare trust fund to finance these tax cuts. The tax legislation contains a "contingency fund" that is financed primarily by the Medicare Part A trust fund," she added. "Like most Americans, seniors favor a tax cut. But our members do not want to trade off a life-time guarantee of Medicare coverage for prescription drugs for a small one-time refund," she said. Congress should revise the tax legislation this year to make room for other priorities, she added. The Congressional Budget Office estimates that an affordable and comprehensive Medicare prescription drug benefit that is available to all beneficiaries would cost more than $300 billion over ten years. "Most beneficiaries who lack coverage are middle class individuals who have contributed to the Medicare program since its inception and were promised access to mainstream medical care. Increasingly, that means prescription drug treatments," Ms. McSteen said. Unfortunately, the administration is not able to devote an adequate portion of the surplus for prescription drug coverage because of the tax cut. ### | |
With millions of members and supporters across America, the National Committee is one of the nation's largest grassroots organizations engaged in political advocacy and devoted to the retirement security of all citizens - from "twenty-something" generation and baby boomers to the nation's thirty-four million seniors. The National Committee is a nonprofit, nonpartisan, tax-exempt organization independent of Congress or any government agency