Cuts to Medicare Pay, Other Reductions Likely To Take Effect in March
On Wednesday, lawmakers predicted that mandated spending cuts under sequestration would take effect in March, as they work to come up with a longer-term solution for curbing the national debt, the Washington Post's "Federal Eye" reports (Hicks, "Federal Eye," Washington Post, 1/23).
The mandated spending cuts under sequestration -- which involve about $1 trillion in across-the-board reductions -- include a 2% reduction to all Medicare reimbursement rates (California Healthline, 11/13/12).
Earlier this month, President Obama signed legislation -- negotiated by Vice President Biden and Senate Minority Leader Mitch McConnell (R-Ky.) -- that delayed the cuts by two months (California Healthline, 1/3).
Spending Cuts Expected
However, as the new deadline approaches, lawmakers on both sides say the spending cuts are inevitable, at least temporarily.
According to Politico, some Republicans privately have resigned to the idea of the cuts because they say they have lost the debt default as political leverage to push Obama into accepting spending and entitlement cuts.
Sen. Richard Durbin (D-Ill.) said, "Most Republican senators I spoke with said, 'We're for spending cuts -- we want sequestration to go forward.'" He added, "I think we're committed to some form of sequestration spending cut" (Raju/Bresnahan, Politico, 1/23). Durbin added that the White House also is preparing for the scheduled cuts, by considering options to lessen the effects of sequestration on government services and the federal workforce, which would face layoffs ("Federal Eye," Washington Post, 1/23).
On Wednesday, House Speaker John Boehner (R-Ohio) left the possibility of a deal open. However, he said, "The sequester will go into effect on March 1 unless there are cuts and reforms that give us a plan to balance the budget over the next 10 years" (Rogers, Politico, 1/23).
Political Pressure To Address Entitlement Spending Increasing
According to Politico, as the House and Senate debate over dueling budget reform packages, lawmakers might be forced into a serious policy debate over entitlement reforms, which the 112th Congress largely avoided (Raju/Bresnahan, Politico, 1/23).
Meanwhile, in the wake of losing the debt default as leverage, Republicans could seek to regain their bargaining power by endorsing $69 billion in cuts from discretionary spending, which could force Obama to accept alternative savings from entitlement programs, Politico reports (Rogers, Politico, 1/23).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.