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Trumka: Budget Cuts to Social Security, Medicare ‘Wrong and Indefensible'

Trumka: Budget Cuts to Social Security, Medicare ‘Wrong and Indefensible'

The budget that President Obama released today is drawing intense criticism for its cuts to Social Security and Medicare benefits. AFL-CIO President Richard Trumka called those cuts “wrong and indefensible.”

A president’s budget is more than just numbers. It is a profoundly moral document. We believe cutting Social Security benefits and shifting costs to Medicare beneficiaries—while exempting corporate America from shared sacrifice—is wrong and indefensible. 

The budget cuts Social Security cost-of-living adjustments by adopting a so-called "chained" CPI formula that amounts to a $130 billion cut to Social Security recipients. Edward F. Coyle, executive director of the Alliance for Retired Americans, says using the chained CPI is:

Nothing other than unfairly balancing the budget on the backs of America’s seniors, who’ve done nothing but work their entire lives towards earning the promise of Social Security’s guaranteed benefits. 

In addition, the budget shifts $64 billion of health care costs to Medicare beneficiaries. Says AFSCME President Lee Saunders:

The collapse of the private pension system means that Social Security and Medicare are more important than ever and should be regarded as solutions, not budget problems. Unfortunately, these proposed cuts would make things worse.

NEA President Dennis Van Roekel says the cuts to Social Security and Medicare are the wrong approach.

Right now the focus should be on protecting and increasing benefits for our seniors, not pulling the rug out from under them as seniors and families are working so hard to make ends meet.

Small Business Majority CEO John Arensmeyer says “small businesses support preserving Social Security” and that cuts could “undermine our burgeoning recovery and should be left out of any final budget deal.”

Trumka also says that while budget calls for major sacrifices by seniors and federal workers, its “revenue neutral” approach to corporate taxes means, “it fails to ask big, profitable corporations to pay their fair share of taxes.”

Trumka and others also faulted the budget for failing to invest in enough jobs.

Putting aside the injustice of demanding sacrifice from the innocent while letting the guilty off scot-free, the Obama budget falls short of putting our economy on a path toward higher wages and full employment. 

SEIU President Mary Kay Henry says, “To truly address the deficit and continue our economic recovery, we must focus on creating more good jobs. That should be priority number one.”

But the president’s budget falls short in that regard, says Trumka, by “cutting the part of the budget that pays for investments in worker training and jobs, which has already been cut to its lowest level since the Eisenhower administration, by another $100 billion."

This austerity budget is bad economic policy at a moment when the economy remains weak and we urgently need more job-creating investments.

However, Trumka and others did note that the budget includes several “praiseworthy proposals.”

AFT President Randi Weingarten praised the universal access to pre-kindergarten in the budget and its proposal to:

Expand high school opportunities to be more hands-on and more focused on thinking rather than testing, like those at P-TECH (Pathways in Technology Early College High School) in Brooklyn, N.Y. The president's budget also invests in our public schools and students through proposals to rehire teachers and keep them in the classroom, and to preserve Pell Grants to make college more affordable and accessible.

Other positive aspects of the budget includes the strengthening of programs to protect workers against wage theft, unsafe workplaces and employer retaliation. It also closes the outrageous loophole that allows Wall Street financial managers to pay a special lower tax rate. And it reforms some of the tax loopholes that allow corporations to get away with shifting profits overseas to avoid U.S. taxes.

But Trumka also pointed out that:

Last November, working Americans voted for jobs and growth, not for budget austerity and benefit cuts. We urge the President to drop these cuts and build support for investing in jobs.

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