GOP Members of Debt Panel Release Deficit-Reduction Proposal

On Thursday, Republicans on the debt committee presented a $2.2 trillion deficit-reduction proposal that would cut $1.2 trillion in spending, including cuts to Medicare benefits and providers, congressional aides said, the Los Angeles Times reports.

The proposal countered an offer that Democrats made earlier this week (Mascaro, Los Angeles Times, 10/27).

According to congressional aides, Democrats on the panel offered a proposal that would reduce the deficit by almost $3 trillion over 10 years through a mix of spending cuts and revenue increases, including $500 billion in cuts to Medicare, Medicaid and other federal health programs. Republicans were sharply critical of the plan's tax increases, which would nearly equal its spending cuts (California Healthline, 10/26).

A Democratic aide said the GOP proposal is "a joke." House Minority Leader Nancy Pelosi (D-Calif.) said the GOP offer "doesn't sound like anything that would even be in the league" of proposals Democrats would accept (Los Angeles Times, 10/27).

Boehner Protests Democratic Proposal

In a recent memo to the debt panel, House Speaker John Boehner (R-Ohio) criticized the proposal offered by Democrats, Politico reports. He wrote that the plan is "[n]ot a serious proposal." He added, "Republicans have been willing to discuss new revenues, but this offer is rooted in unacceptable tax increases, which would have a negative impact on the economy and jobs."

According to Boehner, the plan's $1.3 trillion tax increase is "far more" than he and President Obama agreed upon last summer during budget negotiations (Sherman, Politico, 10/27).

Regarding the plan's treatment of Medicaid, Boehner wrote that the federal government is projected to spend more than $4 trillion on the program across the next decade. However, the Democrats' proposal "only trims the program by $50 billion, with no additional flexibility for states, so the Democrats' savings amount to only 1% of projected future costs," according to the memo (Garrett, National Journal, 10/27).

House Members Want Permanent 'Doc Fix'

Meanwhile, Rep. Allyson Schwartz (D-Pa.) held a bipartisan briefing on Thursday reiterating her call that the debt panel develop a permanent fix to the formula that calculates Medicare reimbursement for physicians, National Journal reports (McCarthy, National Journal, 10/27).

Since 2002, Congress annually has passed a series of short-term bills to block scheduled cuts to Medicare reimbursement rates under the sustainable growth rate formula that determines Medicare reimbursement rates for physicians. The most recent "doc-fix" bill, enacted in December 2010, is scheduled to expire on Jan. 1, 2012, at which point physicians face a 29.4% payment rate cut.

Earlier this month, sources familiar with the debt panel's discussion indicated that members have a "strong interest" in fixing the SGR. If the panel seeks a 10-year fix for the formula, it would need to make up the $300 billion cost through additional spending cuts or tax increases on top of its original spending goals (California Healthline, 10/7).

Schwartz's event supplements a letter she sent to the debt panel earlier this month asking members to address the SGR in their negotiations (McCarthy, National Journal, 10/27).