FISCAL CLIFF AVERTED

At literally the last minute President Obama and the Congress crafted a deal that will raise the marginal tax rate on income above $400,000 a year for individuals and $450,000 for married couples but preserve the so-called Bush-era tax cuts for the rest of Americans. However, other parts of the puzzle: raising the debt ceiling and sequestration (automatic across the board budget cuts) have been kicked down the road a couple months and will have to be addressed by the new Congress. Presumably cuts to the Social Security budget will be in play.

Social Security and Medicare will, presumably, be on the table when those cuts are addressed. Such cuts could impact on the hearing process for disability & SSI claims and could include the closing of Field Offices.

The “temporary” reduction for the employee portion of the Social Security payroll tax, which was in effect for the past two years, has been allowed to expire. This means additional revenue for the trust funds. President Obama has also indicated a willingness to consider a modification in how the cost of living increase for Social Security benefits is calculated. And raising the eligibility age for Medicare from 65 to 66 is likely to be part of the conversation as well.

Finally, SSA Commissioner Michael J. Astrue’s term is up this month and a replacement will need to be appointed by the President.