Why a Balanced Budget Amendment Would Harm Social Security and Federal Deposit Insurance The problems with a constitutional balanced budget amendment, which the House will vote on this week, go far beyond the significant economic harm it could cause. For instance, its requirement that policymakers offset federal spending in any year with revenues collected in that same year would prevent Social Security and the Federal Deposit Insurance Corporation (FDIC) from using their reserves for their intended purposes of paying benefits and responding to bank failures, respectively. Social Security. By design, the Social Security trust fund has built up reserves — in the form of Treasury securities backed by the full faith and credit of the United States — which it will use to help pay benefits for
retired “baby boomers” in the late 2020s and early 2030s. Social Security now holds $2.9 trillion in Treasury securities. But under the balanced budget amendment, it would essentially be unconstitutional for Social Security to use these savings to pay promised benefits. Instead, it could have to cut benefits, because all federal spending would have to be covered by tax revenues collected during that same year. More precisely, Social Security could use its accumulated Treasury securities to help pay benefits only if the rest of the federal budget ran an offsetting surplus (or if the House and Senate each mustered the three-fifths vote to override
the balanced budget requirement). Bank deposit insurance. The FDIC holds more than $90 billion of reserves, in the form of Treasury securities, to insure depositors’ savings. It calls upon these reserves when banks fail, jeopardizing those savings. The balanced budget amendment, however, could make it unconstitutional for the FDIC to use its assets to pay deposit insurance, since doing so would generally constitute “deficit spending.” As with Social Security, the FDIC could make these payments only if the rest of the budget ran an offsetting surplus that year or if Congress overrode the balanced budget requirement.
If deposit insurance were no longer effective, panicked depositors could make runs on banks, causing a chain reaction that could turn a recession into a depression. That’s what happened from 1929 to 1933. Indeed, federal deposit insurance was enacted in 1933 — after a series of banking panics — to halt that collapse. In sum, even though Social Security and deposit insurance have built up substantial reserves to pay benefits and claims, those reserves could fail to provide protection under a constitutional balanced budget requirement because the reserves wouldn’t count as revenues in the current fiscal year, while payments from the reserves would count as spending in the current fiscal year.
Medical Marijuana’s ‘Catch-22’: Federal Limits On Research Hinder Patients’ Relief By the time Ann Marie Owen turned to marijuana to treat her pain, she was struggling to walk and talk. She also hallucinated. For four years, her doctor prescribed the 61-year-old a wide range of opioids for her transverse myelitis, a debilitating disease that caused pain, muscle weakness and paralysis. The drugs not only failed to
ease her symptoms, they hooked her. When her home state of New York legalized marijuana for the treatment of select medical ailments, Owens decided it was time to swap pills for pot. But her doctors refused to help. “Even though medical marijuana is legal, none of my doctors were willing to talk to me about it,” she said. “They
just kept telling me to take opioids.” While 29 states have legalized marijuana to treat pain and other ailments, the growing number of Americans like Owen who use marijuana and the doctors who treat them are caught in the middle of a conflict in federal and state laws — a predicament that is only worsened by thin scientific data.
Because the federal government classifies marijuana a Schedule 1 drug — by definition a substance with no currently accepted medical use and a high potential for abuse — research on marijuana or its active ingredients is highly restricted and even discouraged in some cases….Read More
CMS Finalizes Medicare Advantage and Part D Changes for 2019 This week, the Centers for Medicare & Medicaid Services (CMS) released the final Medicare Advantage and Part D 2019 Rate Announcement and Call Letter. This is the finalized annual update to Medicare Advantage and Part D programs, which includes payment updates and policy changes for calendar year (CY) 2019. CMS also released a preview and fact sheet of the Final Rule Implementing Policy and Technical Changes to Part C and Part D for CY 2019,
which will be that address the social formally published at determinants of health, a later date. like nutritional support. Notable changes for the 2019 Finalizing a new method for plan year include: calculating payments to Eliminating the Star Rating Medicare Advantage plans Measure that separately that employers can offer to captures the results of audits Medicare enrollees. and enforcement actions. Expanding the list of Expanding the ability for plans conditions included in the to offer supplemental benefits CMS-HCC Risk Adjustment that are health related but are Model. not covered by Traditional Together with the changes in Medicare, including benefits the proposed rule, this Rate
Announcement and Call Letter provides for increased plan flexibility and reduced oversight. As Medicare Rights outlined in our comments to both draft documents, this flexibility will require increased understanding, vigilance, and research by beneficiaries as they choose and utilize coverage through Medicare Advantage Plans. View the CMS fact sheet. View the 2019 Rate Announcement and Call
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