Budget Talks Remain at Impasse; Senate Dems Unveil FY 2012 Package
Negotiations over a fiscal year 2012 budget and deficit reduction proposals between President Obama and House Speaker John Boehner (R-Ohio) on Monday ended without any consensus, the Washington Post reports (Montgomery, Washington Post, 7/11).
Democrats familiar with Monday's talks said that Obama continued to seek the GOP's support for a $4 trillion "grand bargain" package that includes spending cuts, entitlement reforms favored by Republicans and new revenue through tax increases, according to National Journal (Condon, National Journal, 7/11).
Two days earlier, Boehner withdrew from private talks with Obama on a $4 trillion plan -- which would have been tied to a proposal to increase the federal debt limit -- over objections to Democrats' desires for tax increases. Instead, Boehner suggested lawmakers pursue a scaled-back deal, adding that any new plan should feature cuts identified last month during bipartisan negotiations led by Vice President Biden, which could save between $2 trillion and $3 trillion (California Healthline, 7/11).
At a news conference before Monday's meeting with Boehner, Obama said that he would continue to seek "the biggest deal possible" to address the nation's long-term fiscal challenges. He added that he is willing "to take on significant heat from my own party to get something done" if Republicans are ready to do the same, the New York Times reports (Calmes, New York Times, 7/11).
Obama challenged Republicans to "eat your peas" by supporting a larger budget and deficit-reduction package, and he warned that he would not sign a short-term "stopgap" measure to avoid a federal default.
Meanwhile at a Capitol Hill news conference, Boehner said Republicans would not vote for a package with any tax increases. However, Boehner during the White House meeting with Obama indicated that he is willing to consider $1 trillion in new revenues by reforming the tax code, which would offset the costs of allowing the Bush-era tax cuts for high-income individuals to expire in 2013, the Times reports (Landler/Hulse, New York Times, 7/11).
Democratic officials confirmed that Obama would consider a change in Medicare that would increase the eligibility age for beneficiaries from 65 to 67. One official noted that Obama only is willing to discuss a "very slow phase-in" of the eligibility age increase, which would take effect in 2036 (National Journal, 7/11). Officials said the change would be possible because of broadening access to health insurance under the federal health reform law (Landler/Hulse, New York Times, 7/11).
Conrad Unveils Senate Democratic Budget Framework
Senate Budget Committee Chair Kent Conrad (D-N.D.) on Monday unveiled the Senate Democrats' fiscal year 2012 budget blueprint, which would cut the deficit by $4 trillion over 10 years through a combination of spending cuts and tax increases, Politico reports.
According to Politico, the budget framework proposes:
- Modest spending reductions in Medicare and Medicaid;
- Raising taxes on the 1% of U.S. residents with the highest incomes;
- Eliminating corporate tax loopholes and shelters; and
- A series of salary and additional spending freezes for White House, congressional and federal employees.
During a Senate floor presentation of his plan, Conrad compared his proposal with the House-approved GOP FY 2012 budget resolution (H Con Res 34), noting that his blueprint would largely preserve the federal health safety-net programs by cutting only $80 billion from Medicare and Medicaid.
Countering Republican criticism that his plan falls short of being an actual budget proposal, Conrad said, "We believe there are some ideas in this package that deserve consideration as [the budget negotiations with the White House] go forward" (Wong, Politico, 7/11).
Drugmakers, Hospitals Lobby Against Budget Considerations
The Pharmaceutical Research and Manufacturers Association on Monday expressed opposition to a measure proposed by Democrats as part of the ongoing budget negotiations that would affect drugmakers' operations and costs, CQ HealthBeat reports (Norman, CQ HealthBeat, 7/11).
Last month, Democrats introduced legislation (HR 2190) that would reduce Medicare Part D drug costs by requiring drugmakers to provide prescription rebates to individuals eligible for both Medicare and Medicaid and to low-income Medicare beneficiaries. Democrats say the bill would lower the federal deficit by more than $112 billion over the next 10 years (California Healthline, 6/17).
PhRMA suggested that the proposal could threaten the U.S. job market. The group released a study that found the biopharmaceutical industry is an essential element of the economy because it employed 674,000 workers in 2009 and supports an additional 3.4 million jobs.
A separate study by American Enterprise Institute analyst Joseph Antos found that the measure would not provide any immediate relief to the impending debt crisis, CQ HealthBeat reports.
Meanwhile, the Coalition to Protect America's Health Care -- which counts the American Hospital Association and the Federation of American Hospitals among its members -- on Monday announced a new television advertising campaign criticizing a proposal that would cut reimbursement rates for hospitals (CQ HealthBeat, 7/11).
As part of the ongoing budget talks, negotiators have been considering a series of proposed cuts in entitlement spending that would target payments to health care providers while attempting to avoid compromising the quality of care or the structure of Medicare and Medicaid (California Healthline, 7/5).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.