Obama’s Budget Proposal Mixes Help and Cuts for Older Americans

HUD Housing Effecting Senior Citizens 

Douglas Rice, senior policy analyst at the Center on Budget and Policy Priorities, says the cut reflects U.S. Department of Housing and Urban Development plans to reform the housing program for the elderly, which pays for new construction of housing for older low-income residents and for rental assistance. Current project residents would not see cuts, but new construction would not get money. “It looks like HUD has been somewhat frustrated by the elderly housing program and is seeking to reform it,” Rice says. Still, other HUD programs would see increases, including the Section 8 housing program, which provides aid to hundreds of thousands of older residents, Rice says. Obama said the nation had started the decade with a surplus but now faces $12 trillion in debt. He blamed the Medicare prescription drug expansion and the tax cut programs from 2001 and 2003 for the $7.5 trillion debt he inherited. The recession added an additional $3 trillion, and Obama's stimulus plan last year added $1 trillion. His budget rolls back the tax breaks for families earning more than $250,000.

 

Obama said his budget priorities reflect the “building blocks of the middle class. “Americans are willing to work hard, and, in return, they expect to be able to find a good job, afford a home, send their children to world-class schools, receive high-quality and affordable health care, and enjoy retirement security in their later years,” he said. Here are some of the programs for older Americans that would see increases under the budget:

Retirement security Checks for $250. Obama proposed distributing $250 each to Social Security recipients because no cost-of-living adjustment is planned this year. Although inflation is negligible, older Americans still face rising costs such as health care. “It matters a lot to seniors on fixed incomes,” said David Sloane, AARP's senior vice president for government relations and advocacy. And the money will be spent, which will help the economy. Auto-IRA. Saving for retirement would get a lot easier for the 50 percent of workers who have no workplace retirement savings program now. Under the auto-IRA proposal, small businesses would get increased tax credits to administer new IRAs for their workers where retirement savings is automatically deducted from paychecks. Workers would be enrolled unless they proactively opted out. Studies show those programs make a big difference in getting people to save, Sloane said. “This is one of our top priorities,” Sloane said. “If people don't have an opportunity to save for their retirement, it will put pressure on the federal government,” to help them out later. Tens of millions of workers without pensions would benefit from the automatic IRAs, the budget estimated. The White House also wants to make it easier for companies that have 401(k)s to adopt automatic enrollment, which is a particularly effective way to increase saving among low-income and minority workers. Automatic enrollment increases participation in 401(k) plans from 70 percent to about 90 percent. Saver's Credit. Families earning less than $85,000 would get more help under the saver's credit. Their retirement savings would get a 50 percent federal match, up to $1,000. Source: AARP Bulletin Today By Tamara Lytle

 

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