Coburn Unveils Deficit Plan; Obama Would Veto Other GOP Budget Bill
Coburn said the details of the plan could serve as a menu of policy options for negotiators as they develop fiscal year 2012 budget and debt-limit agreements (Bolton , The Hill, 7/18).
The plan proposes a series of GOP-favored spending cuts to federal agencies and entitlement programs, including Medicaid and Medicare, and a variety of revenue-generating tax loophole closures that Democrats favor (Steinhauer, "The Caucus," New York Times, 7/18).
The package includes $106.7 billion in spending reductions at HHS, along with a plan to cut costs in Medicare and Medicaid by $2.64 trillion over the same period. In addition, the package would raise about $962 billion in revenue by eliminating a series of tax breaks (Bolton , The Hill, 7/18). The plan also would:
- Increase the Medicare eligibility age by two months annually -- beginning with individuals who were born in 1949 -- until it reaches 67;
- Increase premium costs by two percentage points annually for five years for Medicare beneficiaries in the Part B program -- who currently pay 25% of the cost of coverage for physician services -- until they reach the new minimum level of 35% in 2019;
- Shift a greater share of Medicaid costs to states by mirroring the Medicaid block-grant proposal in the House-passed GOP FY 2012 budget resolution (H Con Res 34); and
- Require means testing of government programs, including Medicare (Steinhauer, "The Caucus," New York Times, 7/18).
White House Issues Veto Warning Against House GOP's 'Cut, Cap and Balance' Bill
On Monday in a statement of administration policy, the White House warned House Republican leaders that the president would veto the House GOP-sponsored budget and debt-limit bill (HR 2560), known as the "cut, cap and balance" measure.
The House is scheduled to vote on the proposal on Tuesday evening (Youngman, The Hill, 7/18).
Under the GOP-sponsored bill, which House GOP leaders unveiled on Friday, caps would be placed on discretionary and mandatory spending as a percentage of the gross domestic product. In addition, the bill would increase the debt ceiling by $2.4 trillion, but only if Congress approves a constitutional amendment requiring the federal government to balance its budget. The plan eschews revenue-raising tax increases. The House vote on the bill is considered to be largely symbolic because it is unlikely to pass in the Democratic-controlled Senate (California Healthline, 7/18).
The White House Office of Management and Budget issued a statement that said the bill would "lead to severe cuts in Medicare," among other negative effects (Zigmond, Modern Healthcare, 7/18).
Obama, House GOP Leaders Continue Private Negotiations Despite Stalemate
While budget negotiations at the White House last week remained at an impasse, Obama on Sunday hosted an undisclosed private meeting with House Speaker John Boehner (R-Ohio) and House Majority Leader Eric Cantor (R-Va.) (Fernholz/Kaplan, National Journal, 7/18).
For more than a week, congressional leaders and White House officials had been attempting to reach a deal on a budget and deficit-reduction proposals and legislation to increase the government's debt limit. However, the talks have been held up by partisan disagreements over entitlement spending and taxes. Congress has until Aug. 2 to raise the government's current borrowing cap of $14.3 trillion or risk a federal default on debt obligations (California Healthline, 7/15).
A spokesperson for Boehner said the negotiators are committed to keeping the lines of communication open, although there "is nothing to report in terms of an agreement or progress" in the talks (Hulse, "The Caucus," New York Times, 7/18).
Conservatives Oppose McConnell's Back-Up Plan
Conservative groups in an open letter to GOP lawmakers criticized the budget and deficit-reduction plan developed by Senate Minority Leader Mitch McConnell (R-Ky.) (Bolton , The Hill, 7/18).
Under McConnell's plan, which he described as a "last-choice option" to break the ongoing stalemate, the Obama administration would seek Congress' approval to raise the debt ceiling by $2.5 trillion over three installments in the next 18 months, which would take effect through legislative maneuvering. Meanwhile, proposed spending cuts would be debated in Congress under normal appropriations procedures, without any guarantee that lawmakers would ever vote on them (California Healthline, 7/15).
Groups that signed the letter include the American Majority Action, FreedomWorks and Let Freedom Ring. The letter states, "In one fell swoop, [the plan] abdicates congressional responsibility by granting the president the unilateral authority to raise the debt ceiling and undermines our ability to secure real policy changes that will alter our unsustainable future" (Bolton , The Hill, 7/18).
However, some GOP aides say that Republican leaders believe McConnell's plan could become the top option if other debt discussions fail (Bolton , The Hill, 7/18).
'Gang of Six' To Release Budget Plan
On Tuesday, the five remaining members of the former "Gang of Six" are scheduled to meet with about 50 senators to present a plan to cut the deficit.
The group will present the main points of a proposal that would cut around $3.6 trillion from the federal budget over the next decade (Allen, Politico, 7/18).
Senate Budget Committee Chair Kent Conrad (D-N.D.), a member of the group, suggested a two-step process for cutting the deficit involving a down payment and then a second larger fiscal package later this year (Dennis, Roll Call, 7/18).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.