Obama Eyes Multiyear Budget Plan With Cuts to Entitlement Programs
On Wednesday, President Obama is scheduled to announce plans to develop a multiyear debt-reduction proposal that would raise revenues and make cuts to entitlement programs, such as Medicare and Medicaid, according to senior White House political strategist David Plouffe, the New York Times reports.
The move signifies Obama's first attempt to guide the budget debate after months of criticism that he has been too far removed from negotiations. Although the president offered a fiscal year 2012 budget proposal in February, the plan did not call for cuts to entitlement programs, even though many lawmakers blame such programs for soaring deficits.
Obama is expected to urge bipartisan negotiations on the proposal, which will compete with plans offered last week by House Republicans, according to administration officials (Calmes, New York Times, 4/10).
House Budget Committee Chair Paul Ryan (R-Wis.) last week released a FY 2012 proposal that would make $6 trillion in federal spending cuts over the next decade, in part by overhauling Medicare and Medicaid. It would provide Medicare beneficiaries with lump-sum vouchers to buy private insurance and turn Medicaid into a block-grant system. The Medicaid overhaul would provide states with fixed annual block grants of $11,000 per beneficiary to use as they choose (California Healthline, 4/7).
The House Republican Study Committee released an alternate FY 2012 budget proposal that would cut $9.1 trillion in federal spending over the next 10 years and would also include substantial Medicare and Medicaid cuts (Wasson/Millman, "On the Money," The Hill, 4/7). Democrats criticized the proposals for making cuts to entitlement programs but not reducing defense spending or seeking higher tax revenue (California Healthline, 4/7).
Obama Not Expected To Offer Specific Details
Plouffe said that Obama will not offer details regarding the new plan during the announcement but that the president will set deficit-cutting goals, the Times reports (New York Times, 4/10). Plouffe contrasted the goals with the FY 2012 GOP budget proposals by saying Obama wants to take a "scalpel" instead of a "machete" to certain programs (Goldfarb, Washington Post, 4/10).
According to Politico, Obama likely will consider cuts suggested in December 2010 by the bipartisan National Commission on Fiscal Responsibility and Reform, most of which he left out of his initial FY 2012 budget proposal (Nather, Politico, 4/11).
Those recommendations include:
- Instituting a new formula for physician reimbursement that would replace the sustainable growth rate and encourage "care coordination across multiple providers and settings" that also "pays [physicians] based on quality instead on quantity of services";
- Establishing and enforcing a national budget for Medicare, Medicaid and all other federal health programs;
- Stronger authorizations for the Independent Payment Advisory Board, which was created under the health reform law to slow Medicare spending growth, and placing hospitals under its purview in 2015;
- Adopting comprehensive malpractice reform, which would not include a cap for non-economic damages; and
- Increasing cost-sharing among Medicare beneficiaries and requiring plans to provide rebates for brand-name drugs (California Healthline, 11/11/2010).
According to the Times, the Obama administration in December 2010 settled on a strategy in which Obama would wait for Republicans to lay out their spending proposals before he introduced a plan to cut entitlement spending (New York Times, 4/10).
Action on Ryan Proposal Expected This Week
The House this week is expected to pass Ryan's budget proposal on a party-line vote, but Democrats likely will resist the proposal as long as possible, CQ Today reports. The Democratic-led Senate is not expected to approve the measure (Krawzak, CQ Today, 4/10).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.