In the wake of President Donald Trump’s budget proposal, the country’s largest public insurer and its largest pension provider have come together to support a new proposal to replace Social Security and Medicare.
The American Federation of Government Employees, the union for the nation’s government employees, released a letter Thursday urging Congress to pass the President’s proposal, which would cut the Social Security payroll tax rate from 12.4 percent to 8.2 percent.
The letter, signed by AFFE President J. David Cox, argues that the proposal would not have much of an impact on Social Security because it would not be replacing any benefit, but rather, it would “eliminate an entitlement that has existed for decades.”
The AFFEA also said it is concerned that the President has failed to mention the need for tax reform.
“It would be a mistake to assume that the tax cut would only benefit the wealthy,” the letter said.
“There are other things the President could have done to address our nation’s fiscal challenges.”
It also argues that, unlike the American Health Care Act, which was designed to provide coverage to millions of Americans, the proposed plan “would be paid for by cutting Medicare’s retirement benefits and Medicaid, both of which are in need of a major overhaul.”
The proposed Medicare cuts would also result in the elimination of Medicare Advantage, which provides health care coverage to people who make too much to qualify for Medicare, and the elimination or shrinking of Medicare’s Medicare Advantage funding.
“This will not only eliminate the Affordable Care Act’s essential coverage benefits for people with pre-existing conditions, but it will leave millions of seniors with no option to maintain their Medicare benefits,” the AFFEE letter says.
“These are the only provisions that the president could have eliminated without eliminating Medicare.”
Cox wrote that he would continue to work with members of Congress to make sure the plan “reforms and increases benefits for those who rely on Medicare.”AFAE President Joe Pescatore has also called for the proposal to be repealed.
“We do not believe that the [Trump] administration should continue to make the changes they are making to Social Security,” he said in a statement.
“I urge the administration to immediately repeal the proposed cuts and ensure that those benefits are not cut further.”
The president’s budget plan would cut spending on both programs by $5.5 trillion over 10 years.
It would also eliminate a variety of benefits including a guaranteed minimum income, a program that would provide cash assistance to people earning less than $250,000 per year.
The White House says that the changes would create a “balanced and sustainable federal budget” for the next decade.