Quick Hit Steven Ross Johnson Monday December 17th, 2012, 2:36pm

Medicare, Medicaid & Social Security Vital To Illinois Economy, New Report Finds

As lawmakers continue to make little progress in their negotiations over the federal budget, local senior rights advocates warn that proposed cuts in spending to the country’s social safety net would negatively affect many of the state’s elderly and most vulnerable residents.

The importance of Social Security, Medicare and Medicaid was the focus of a new report that illustrates the positive impact these programs have on the state’s economy, as well as those who receive the benefits.

“We need to remember Social Security, Medicare and Medicaid are truly the foundation of the middle class,” said Emily Stuart, director at the Illinois Alliance for Retired Americans. “Without them, the middle class would most certainly suffer.”

According to the report, approximately 6.3 million of Illinois’ 12.8 million residents received benefits from Social Security, Medicare or Medicaid in 2011, totaling nearly $60 billion in assistance.

The study also found that in 2008, Social Security helped 514,000 Illinois seniors out of poverty, and that between 2006 and 2008, the rate of poverty among Illinois seniors was 8 percent for those receiving benefits, while the poverty rate among those who did not receive benefits was 44 percent. 

In all, Social Security was credited with helping more than 772,000 Illinois residents avoid poverty in 2008, a number that included seniors, children, disabled workers and the surviving family members of the deceased.

In terms of Medicare and Medicaid, the report found that both programs combined accounted for 37 percent of all health care spending in Illinois in 2009, totaling more than $32 billion.

Stuart said a key point that has largely been ignored in the debate over how to reduce the nation’s deficit has been the vital role such social programs have played over the years in helping to maintain the middle class, and how cuts to the safety net could threaten the economic security of thousands of Americans. 

“It’s so important for our members of Congress, and everyone, to remember what this country was like before Social Security and before Medicare,” Stuart said. “Before Social Security passed in 1935, nearly half of seniors in the U.S. were living in poverty.”

Stuart said any budget negotiations should not include Social Security as part of the solution, since the program has not been a contributing factor to the country’s debt. 

“These are programs that we are all paying into,” Stuart said. “Social Security and Medicare are programs that we built and we want to protect, and we don’t want to see a privatized Social Security or a privatized Medicare, or benefits reduced.”

Recent reports have indicated efforts by the White House and congressional Republicans to come up with a deficit reduction plan before the end of the year have mostly stalled over the issue of raising taxes.  

President Obama has supported allowing the Bush-era tax cuts to expire and raising the tax rate for the top 2 percent of income earners — a view shared by a majority of the public according to a recent poll conducted by the Pew Research Center. Meanwhile, GOP lawmakers have favored keeping the tax cuts in place for everyone.

Less contentious an issue has been the willingness of both parties to reduce government spending. The president’s plan would call for $350 billion in cuts to health programs, plus another $250 billion in other spending cuts over the next 10 years. Republicans seek to cut $600 billion from health programs and another $600 billion from other, non-specified programs over the same period.

The issue of spending cuts has been a particularly sensitive one for progressives, who have criticized both Democrats and Republicans for proposing any change that they feel would weaken the social safety net.

At a speech last month at the Center for American Progress, U.S. Dick Durbin said even though changes to Medicaid, Medicare and Social Security would need to be discussed at some point, he felt they should not be a part of the current budget talks.

If no agreement can be reached before the December 31 deadline, a series of automatic cuts and tax increases totaling $600 billion would go into effect at the beginning of 2012, the results of which many economists have projected would put the country back into recession.


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