B’nai B’rith International is deeply disappointed that Congress has passed a tax reform plan that does not consider the negative long-term consequences to Medicare and Medicaid — the social safety net programs that are a hallmark of this nation’s commitment to those in need. We have expressed profound reservations about the tax reform plan since its inception, when it was clear many programs important to seniors and other vulnerable populations could be in serious jeopardy and were going to face cuts.
Perhaps the biggest danger this Congressional tax plan includes is the likelihood of future cuts to critical federal programs such as Medicare and Medicaid to help pay down what most economists say will be a massive increase in the deficit that will result from these tax cuts. Experts predict that the ensuing revenue short-fall would have to be made up by drastic cuts to programs fundamental to seniors in need. Medicare and Medicaid need to be fully funded to ensure no coverage gap for those who rely on the programs. During the tax reform process, the Congressional Budget Office determined that the tax measure would increase the deficit by $1.4 trillion over the next decade. In 2015, more than 46 million seniors relied on Medicare. But such a massive increase in the deficit could trigger about $25 billion in automatic cuts to Medicare in just one year.
The repeal of the individual mandate is another aspect of the law that is disquieting. Last year 3.3 million people between the ages of 55 and 64 received insurance through the Affordable Care Act marketplace. Repealing the individual mandate, according to the Congressional Budget Office, will cause premiums to increase by 10 percent.
We are, however, grateful that Congress kept in place the Low Income Housing Tax Credit and the medical expense deduction. The tax credit provides incentives for the private sector to create affordable housing residences. We are thankful the tax plan keeps in the allowance for the use of private equity bonds, which currently finance about half of all Low Income Housing Tax Credit construction. As we have noted before, the loss of these bonds would have made it very difficult for new affordable housing to be built and for current housing to be maintained. As the largest national Jewish sponsor of low income housing for seniors, we strongly advocated for this tax credit, which is responsible for producing about 90 percent of all current affordable housing construction in the United States, and has built about 3 million apartments since it was created. We have seen the benefits directly: The Low Income Housing Tax Credit has helped seniors in the B’nai B’rith Housing Network in St. Louis at Convent Place Apartments, and in Massachusetts at the Coolidge at Sudbury Apartments. According to The Affordable Housing Tax Credit Coalition, 5.1 million senior households now use more than half their income on housing, and in 2030 the number of seniors is predicted to double.
The tax reform law’s maintenance of the medical expense deduction will also benefit many, allowing people to deduct medical and dental expenses from their tax bottom line. Since 1942, millions of Americans have saved money on their taxes by deducting medical expenses. According to Internal Revenue Service data, in 2013, 56 percent of the taxpayers who took the deduction were over 65.
B’nai B’rith will continue to work with Congress, the Department of Housing and Urban Development and other agencies to advocate for senior housing and protections for vulnerable seniors and other populations.