Archived Story

Rep. Matt Lori: Next round of cuts may come from Washington

Published 11:41am Friday, October 14, 2011

Michigan’s Legislature made significant reforms in the first part the session this year to balance its budget and bring state spending under control.
We had to make difficult decisions on what cuts were necessary to make long-term change to Michigan.
Now that Michigan’s spending is being addressed, attention turns to the federal government, which barely averted a shutdown earlier this year when Congress raised the debt ceiling. With its budget still in a state of flux, there might be cuts to programs that are geared toward older Michigan residents.
While Michigan and other states are constitutionally required to have balanced budgets, the same is not true about the federal government. Congress traditionally operates with a debt, and every time the national debt rises above the established debt ceiling, the U.S. House and Senate must either raise the debt ceiling or cut spending.
The debate surrounding the debt ceiling turned ugly this past summer, and Congress went down to the wire before approving a temporary debt ceiling, averting a government shutdown. But the fix is only temporary, with Congress providing only the broadest outlines of a permanent plan that appears to be taking shape in Washington.
In the first stage of the plan, Congress agreed to freeze all discretionary spending for the next 10 years. In addition to defense spending, these cuts affect many domestic programs for older Americans, Congress has not yet ascertained how much these programs will need to be cut, if at all.
The next stage of the process involves the so-called congressional super-committee, which has been meeting to determine how to further reduce the deficit by $1.5 trillion by Nov. 23. Every method to cut spending is on the table, including new taxes, reduced entitlements and cuts in discretionary programs. The committee’s plan must be approved by Congress by Dec. 23.
If this super-committee cannot come up with a plan, or if Congress fails to enact it by the deadline, then $1.2 trillion in across-the-board cuts will take place on Jan. 1, 2013. Half the cuts would come from defense spending. The other half would come from programs that could include the Low Income Home Energy Assistance Program, public transportation, subsidized housing and other similar plans.
On the plus side, Congress could not reduce Social Security payments, nor could Medicaid or Medicare benefits be cut. However, Medicare reimbursements to providers could be cut by up to 2 percent. That could affect medical treatment for senior citizens.
Experts say the best-case scenario would include only minor cuts to senior programs for fiscal years 2012 and 2013. But with the caps required to be in place for 10 years, there is no relief in sight for reduced funding levels that might occur. A decade of reduced spending frozen in place by law could be devastating.
In addition, experts say Medicaid-funded long-term care could be threatened if cuts go as deep as is feared. Long-term care provided by nursing homes could no longer be a Medicaid entitlement.
We certainly hope that the cuts to programs that affect older adults will be minimized at a federal level. But you should keep informed by watching the news, reading the newspaper and keeping in touch with your senior centers to see what developments — if any — will affect you.
If you have questions about state spending or other state issues, please do not hesitate to call my office toll-free at (877) 262-5959. You can also send a letter to me at N-993 House Office Building, P.O. Box 30014, Lansing, MI  48909. Or you can send me an email at mattlori@house.mi.gov.

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