Obama Open to Short-Term Budget Deal To Avoid Looming Default
On Wednesday, White House officials indicated that President Obama is willing to consider a short-term fiscal year 2012 budget and debt-limit package -- a prospect he publicly rejected last week -- to avoid a federal default on debt obligations on Aug. 2, the Washington Post reports.
However, press secretary Jay Carney said the enactment of a stopgap measure will be contingent upon Congress' delivery of a larger, long-term deal "a few days" later (Nakamura et. al, Washington Post, 7/20).
Carney stressed that Obama only would accept a "very short-term" deal of no longer than 30 days, because a longer extension only would delay a resolution of the issues at hand. According to the AP/Boston Globe, Obama's softened stance likely reflects the reality of a looming fiscal crisis if Congress cannot end its ongoing stalemate (Feller, AP/Boston Globe, 7/20).
Obama Restarts Direct Negotiations With Focus on 'Gang of Six' Plan
Meanwhile, Obama on Wednesday restarted direct negotiations with congressional leaders during multiple meetings at the White House, CQ Today reports (Schatz, CQ Today, 7/20).
According to the New York Times, the president met separately with Democrats and Republicans in an apparent effort to pressure the two sides to reach a compromise on the outstanding issues. More specifically, Obama asked the leaders to weigh in and build upon the 10-year, $3.7 trillion deficit-reduction package that the Senate's bipartisan "Gang of Six" released on Tuesday (Hulse/Calmes, New York Times, 7/20).
A summary of the plan indicates that it would cut more than $200 billion from federal health spending. Proposed health-related spending changes include:
- Overhauling the Medicare physician payment formula;
- Eliminating a long-term care insurance program created by the federal health reform law, known as the CLASS Act;
- Making spending cuts to Medicare and Medicaid; and
- Enacting medical malpractice reform.
However, it is unclear what exact spending cuts would be made to Medicare and Medicaid (California Healthline, 7/20).
According to CQ Today, early reactions from lawmakers appeared to be positive, but Senate leaders, lawmakers on influential committees, and other prominent liberals and conservatives took a cautious approach toward the plan. As of Wednesday evening, a bipartisan Senate letter of support for the package had just 33 signatures, far short of the 60-vote supermajority that would be required to secure its passage, CQ Today reports (Schatz, CQ Today, 7/20).
Reactions to Gang of Six Plan Among Health Care Stakeholders
Several physician groups praised a proposal to eliminate the Medicare physician payment formula -- known as the sustainable growth rate formula -- in the Gang of Six budget plan, Modern Healthcare reports.
The American Medical Association, the American Academy of Family Physicians and other physician advocates in a written statement said, "Failure to recognize the impact of the [formula] on the long-term financial health of the Medicare program would be to ignore one of the most pressing financial and health care policy issues facing our nation" (Daly, Modern Healthcare, 7/20).
Former CMS Administrator Thomas Scully said the proposal is "a valiant effort directionally." However, he questioned how the group would replace the SGR and fund such a change.
Likewise, former CMS Administrator Gail Wilensky said, "It's good that [Gang of Six members] want to get rid of this ongoing hole, but there's no suggestion they have any idea, not only what they would replace it with, but also how they would fund it" (Ethridge, CQ Today, 7/20).
Chip Kahn, president of the Federation of American Hospitals, said fixing the SGR would require "gigantic" reductions in provider reimbursement, "which will mean that all providers will receive less money on a year-to-year basis [than] they receive now." He noted, "It's easy to write numbers on a piece of paper and everybody's kumbaya, but numbers have consequences."
According to CQ HealthBeat, hospital executives and health lobbyists are concerned about proposed cuts to Medicare and Medicaid, which would compound cuts already required under the federal health reform law (Reichard, CQ HealthBeat, 7/20). In addition, health care advocacy groups criticized the plan's elimination of the long-term care insurance program created by the reform law, known as the CLASS Act.
Larry Minnix, president and CEO of LeadingAge, said, "CLASS will save money for individuals, families, states and the federal government over time." He added, "More important, it will help people remain independent at home while not draining government resources" (Modern Healthcare, 7/20).
House Leaders Discuss Concerns With Competing Bipartisan Senate Plan
Meanwhile, opposition to the fallback plan unveiled last week by Senate Minority Leader Mitch McConnell (R-Ky.) is growing (New York Times, 7/20). Senate Majority Leader Harry Reid (D-Nev.) and McConnell are working together to develop a version of McConnell's proposal in hopes of attracting broader bipartisan support.
Under the plan, which McConnell 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. The proposed spending cuts would be debated in Congress under normal appropriations procedures, without any guarantee that lawmakers would ever vote on them (California Healthline, 7/20).
However, on Capitol Hill on Wednesday, House Speaker John Boehner (R-Ohio), House Minority Leader Nancy Pelosi (D-Calif.), House Majority Leader Eric Cantor (R-Va.) and House Minority Whip Steny Hoyer (D-Md.) discussed problems with the plan (New York Times, 7/20). In addition, more than 80 House lawmakers have signed a letter urging the House leadership not to bring the measure to the floor when it is released (CQ Today, 7/20).
Reid on Wednesday said the finalized version of the plan could be weeks away from being released as the Congressional Budget Office requires at least two weeks to provide a score of the package (AP/Boston Globe, 7/20).
Reid To File Cloture on 'Cut, Cap and Balance' House Bill
On Wednesday, Reid announced that he would file a cloture motion on Thursday for the House-approved, GOP-sponsored budget and debt-limit bill (HR 2560), known as the "cut, cap and balance" measure. The legislative maneuver would set up a floor vote on Saturday for a motion to proceed on the bill.
However, the Democratic-controlled Senate is expected to reject the bill (Schatz, CQ Today, 7/20).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.