Debt Panel Unable To Reach Deal, Triggering Automatic Budget Cuts
On Monday, the debt panel officially announced that it cannot reach a bipartisan deficit-reduction deal by the deadline this week, the Washington Post reports.
Monday was the cutoff for the panel to submit a deficit-reduction plan to the Congressional Budget Office for scoring before Thanksgiving.
In a statement, committee Co-Chairs Rep. Jeb Hensarling (R-Tex.) and Sen. Patty Murray (D-Wash.) said, "Despite our inability to bridge the committee's significant differences, we end this process united in our belief that the nation's fiscal crisis must be addressed and that we cannot leave it for the next generation to solve." They added, "We remain hopeful that Congress can build on this committee's work and can find a way to tackle this issue in a way that works for the American people and our economy" (Montgomery/Kane, Washington Post, 11/21).
According to the debt deal made last summer, the panel's failure triggers $1.2 trillion in automatic cuts -- know as sequestration -- to various domestic and defense programs. Many lawmakers want to repeal the cuts, which come over 10 years, out of concern for defense programs, while some have taken issue with the cuts effect on Medicare (Krawzak, CQ Today, 11/21).
The cuts will reduce payments to Medicare providers by 2% but will not make changes to Medicare benefits (Walker, MedPage Today, 11/21). The total Medicare cuts would amount to $123 billion over a decade. Medicaid would not be affected by the automatic cuts (Morgan, Reuters, 11/21).
Although some lawmakers have said they will seek to dismantle the cuts, House and Senate leaders have pledged to uphold them.
House Speaker John Boehner (R-Ohio) said he feels obligated to honor the cuts, while Senate Majority Leader Harry Reid (D-Nev.) said he will continue supporting the cuts as long as the White House does (Davis, National Journal, 11/21).
On Monday, President Obama said he will veto any effort to repeal the automatic cuts (Condon, National Journal, 11/21). He said, "There will be no easy off-ramps on this one," adding, "We need to keep the pressure up to compromise, not turn off the pressure" (Kim/Sherman, Politico, 11/21).
Public Opposes Automatic Cuts, Poll Finds
Sixty-one percent of U.S. residents believe Congress should block the automatic cuts, according to the latest United Technologies/National Journal Congressional Connection poll.
The poll surveyed 1,003 adults from Nov. 17 through Nov. 20. According to the survey, 38% of U.S. residents said they were most concerned with sequestration cutting "too much from government programs like Medicare and Social Security" (Brownstein, National Journal, 11/21).
More Health Cuts Ahead
Although the automatic cuts reduce health spending, the U.S. will require further health cuts in the coming years as the population ages and begins to use more federal entitlement programs, Reuters reports.
Joseph Antos of the American Enterprise Institute said, "Two percent is not a lot for Medicare to absorb. About all that happens is a few more providers, like doctors and hospitals, stop accepting new Medicare patients."
Without significant changes to entitlement programs, Medicare, Medicaid and Social Security will consume 100% of all tax revenues by 2047, according to the Government Accountability Office.
Ipsita Smolinksi, a financial analyst in Washington, D.C., said, "Congressional staffers and members have been pretty direct with health care industries: If you're not on the list now, you probably will be later" (Reuters, 11/21).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.