AFSA HQ Newsletter – December 28th

This newsletter is produced and released on a weekly basis by AFSA HQ. To read the full newsletter, as well as archived entries, visit the AFSA On Call Newsletter section of www.hqafsa.org.

LEGISLATIVE UPDATES

Lawmakers Return; Cliff Approaching

President Obama and the US Senate have returned (or are on the way back) to Washington DC.  The House of Representatives is still out, but are on a 48 hour recall.  Multiple sources indicate that no deals will be reached in time to avoid going over the proverbial fiscal cliff.  Partisan lines centering on tax rates have been drawn, blame games have been played, and the American public is becoming less hopeful that their leaders will resolve anything.   There’s been talk of a “grand bargain,” a watered down version of it, and just going over the cliff with an after the fact retro-solution in January with the new 113th Congress…all of it conjecture at this point.  As soon as we know something solid, we’ll send out an AFSA-Alert or From the CEO message to keep you informed.

Don’t Forget “Doc-Fix”

So much attention has been paid to the so-called fiscal cliff that other issues with major ramifications have been relegated to after thoughts.  One such issue is that of the Sustainable Growth Rate (SGR) formula used to calculate reimbursement rates for doctors who treat Medicare and TRICARE patients.  Lawmakers have been relying on short term fixes, commonly referred to as a “Doc-Fix,” to this flawed formula.

Their most recent effort in December 2011 prevented a 27.4 percent cut in Medicare physician payment rates on March 1st and froze current payment rates through December 2012.  Unless Congress acts again, an estimated 30 percent cut in payments to doctors that treat Medicare and TRICARE payments will occur on January 1, 2013.  Lower reimbursements means lower likelihood that Doctors will take on a new Medicare or TRICARE patient, or possibly drop out of the network altogether.  This in turn reduces your access to care…exacerbating an already significant problem in rural areas.

Why continue with a flawed formula and have to rehash this issue annually?  Like anything else, it comes down to money.    Experts say it would now cost about $316 billion to stop the reimbursement rate cuts over the next decade.  That price tag preempts legislative efforts like H.R. 5707 introduced earlier this year.  In a time of economic turmoil with a cost cutting mentality, mandatory spending of that amount is a very tough sell.

AFSA is not a fan of “kicking the can further down the road” on any issue; we much rather prefer long term solutions.  But in light of what could possibly happen, we hope this can is kicked another year until a permanent Doc-Fix is reached.

New Senator for Hawaii Picked

The Aloha State’s governor, Neil Abercrombie (D), was left with the unfortunate task of choosing a replacement for an iconic senator, the late Senator Daniel Inouye (D).  By law, the governor was presented with three top candidates from Hawaii’s Democratic Party and Abercrombie didn’t have to go far for his decision.  Hawaii’s Lieutenant Governor Brian Schatz (D) was chosen.  Schatz (and democrats) will hold the senatorial seat until 2014 when a special election is conducted for the remaining two years of Inouye’s term (2010-2016).

WORTH REPEATING

“The Constitution is not an instrument for the government to restrain the people; it is an instrument for the people to restrain the government – lest it come to dominate our lives and interests.”

― Patrick Henry

FISCAL CLIFF = SEQUESTRATION = YOU

Editor’s Note: One of AFSA’s primary functions is to advocate on behalf of our membership’s interests, which often involves educating the offices we visit.  Equally important is our role in educating our membership on issues so as to have an informed body ready for action.  Given the headline domination of the buzz word “fiscal cliff,” we thought we’d re-post previous articles to refresh your memory on an issue that might seem “above your pay grade” but is in fact something that directly impacts us all.  Also of note, and in very general terms, the fiscal cliff has two components: one is tax hikes that affect the entire US population, and two is sequestration which will specifically target the DoD…and therefore trickle down to you.

Sequestration Defined

According to Webster’s online dictionary, sequestration means to place (property) in custody, but in the political arena there is a slightly different take.  For lawmakers the term describes a fiscal procedure authorized by the Balanced Budget and Emergency Deficit Control Act of 1985 (commonly referred to as the “Gramm-Rudman-Hollings Act”) that triggers automatic spending cuts in the event Congress exceeds previously agreed-to spending limits in its annual Budget Resolution.  However, the prospect of this maneuver actually being used is another thing; in many eyes, that would be catastrophic, and so far, Congress has been unwilling to let it happen.    

Sequestration garnered renewed attention following the passage of the Budget Control Act (BCA) of 2011 last August.  The agreement included a number of budget cuts but still required Congress to come up with an additional $1.2 trillion in savings by November 2011 or sequestration would result in January 2013.  (If you remember the newscasts from 8 months ago, there was constant talk of a “Super Committee,” a bi-partisan congressional panel tasked with developing a plan to accommodate the BCA.  The Super Committee’s failure to reach agreement by the November deadline mandated the deep cuts soon to be triggered by “sequestration,” the term you hear in the news today.)

Absent alternative congressional action, the January 2013 sequestration required by the BCA would force an additional $60 billion in automatic cuts to the defense budget for FY 2013, over and above the $45 billion already taken which is a cumulative 18 percent cut in one year, plus nearly a half-trillion dollars in additional cuts over the next nine years.  Cuts of this magnitude would devastate an all-volunteer force that has borne 100 percent of the nation’s burden of wartime sacrifice for the last 10 years.  Thousands could be separated, benefits would cut, morale would plunge and readiness would decline if Congress does not act soon.

Avoiding the terrible effects of sequestration should not be a political issue but unfortunately it has become one.  Standing in between a House-passed measure and a Senate that has yet to act are the thousands of men and women whose sole purpose for serving is to ensure our national defense.  While AFSA remains politically neutral, as an Association, our focus is on issues pertinent to our membership and this is one of them.  We urge Members of Congress to come up with an immediate, bipartisan resolution to avoid this unconscionable prospect.  At the same time, we want to remind our membership to get involved; act so your choice is not removed from the equation.  Contact your elected officials and let them know how you feel about the issue.  Register to vote and tie it to decisions like these.  Follow up with your elected officials via phone calls or CapWiz.    and if you don’t receive a response, send them another letter asking them where it is.

TRICARE Impacted by Sequestration

Under the law governing sequestration, the president can exempt military personnel accounts or reduce them by a lower percentage. This past summer, President Obama told Congress that he would exempt military personnel accounts from sequestration; meaning the jobs, pay, allowances and retirement benefits for those in uniform are protected from sequestration IF the cuts take effect January 2, 2013. But TRICARE IS NOT IMMUNE to spending reductions. TRICARE, a part of the Defense Health Program which falls under the DoD’s operations and maintenance budget, is subject to sequestration.  The bottom line; the entire military community could be affected by sequestration.

Reconciliation Defined

In an earlier edition of On Call, “sequestration” was explained in detail.  Another option that also looms as a potential solution to mandated budget cuts by Congress is known as “reconciliation.”

Webster’s defines reconciliation as the act of reconciling, as in to check (a financial account) against another for accuracy.  Another, more ominous definition is to cause to submit to or accept something unpleasant.  With regard to reconciliation in the context of national budget cuts, this definition is highly accurate as a reconciliation of our budget would truly be accepting of something unpleasant.

Created in the 1974 Budget Act, reconciliation has been used before on 19 occasions with 3 of the attempts vetoed.  A primary factor in its use is that it’s supposed to limit discussion strictly to budgetary concerns, no slipping in other hidden agendas to a fiscal bill.  Also it limits the amount of floor debate to only 20 hours, forcing Congress to move forward.

If sequestration is the “quick kill” to budgetary concerns, than reconciliation is the “long drawn out death” that nobody wants to sit through.  In either case they are indicative of a failure by Congress to resolve the budget, and both are undesirable outcomes.  Pay attention to the dialogue in the near future as we near the deadline for sequestration.  If the word reconciliation slips into the conversation, don’t mistake it for a desirable alternative to sequestration; we don’t want that either.

Threat to Defense and American Recovery

Sequestration poses the greatest single threat to American recovery in the near term.”  These are the words of former DoD Comptroller, Dov S. Zakheim, who in a recent Foreign Policy Magazine article (http://shadow.foreignpolicy.com/posts/2012/06/11/the_disaster_that_is_sequestration_by_dov_s_zakheim) warned that cuts triggered by the August 2011 Budget Accord and failure of the congressional “Super Committee” will be highly disruptive to current and long-term defense programs.  Equally alarming he says, is the impact of the sequester on the economy as a whole.  He points to a recent study by the Bipartisan Policy Center which found that sequestration will produce a net loss of more than 1 million jobs and lower America’s GDP by one-half percent.  Click on the link above to read his complete article.

FROM THE FIELD

What’s On Your Mind?

Is there a particular area of interest you think we should be covering in more detail?  Is there a political situation or definition that we could explain, educate or expound upon that would be beneficial to our membership?  Fill in the blanks…

“I THINK AFSA SHOULD __________.”   Send inputs to: afsaoc@hqafsa.org

AFSA MEMBER BENEFITS

AFSA New Member Term Life Insurance Benefit

New AFSA members under the age of 40 receive $10,000 of Term Life Insurance provided at no-cost for the first 12 months. For more information click here, or call Marsh Affinity Group Services toll-free at (800) 882-5541.

Columbia Southern University (CSU) Learning Partnership

The AFSA/CSU partnership provides AFSA members a 10 percent discount on all of CSU’s tuition rates, along with the waived $25 application fee.   This discount is available for all AFSA members, employees, and their immediate family members (spouse and children).   Go to CSU’s website here and select “Air Force Sergeants Association” as the Partner Benefit provider.

Trident University

Trident is a WASC accredited, 100% online university, offering quality Bachelor’s, Master’s and Ph.D. degree programs, and dedicated military and veteran student support. AFSA members, spouses and dependents benefit from a tuition discount of 15% for bachelor’s degrees, and 27.5% for master’s/MBA degrees under TUI’s military tuition assistance program. In addition, there is no cost for textbooks, the $75 application fee is waived (bachelor’s and master’s degrees only), and a pre-admissions credit transfer evaluation is offered at no charge or obligation.  For more information call (800) 375-9878 extension 2019 or click here.

Over 20 Other Items of Interest

For a complete and detailed listing of the many benefits to AFSA membership, go to the AFSA webpage and click on the left menu listing “Member Benefits” or just click here.


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This newsletter is produced and released on a weekly basis by AFSA HQ. To read the full newsletter, as well as archived entries, visit the AFSA On Call Newsletter section of www.hqafsa.org.

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