Obama Releases Budget Proposal That Includes $400B in Health Cuts
On Wednesday, President Obama released his $3.77 trillion budget proposal for fiscal year 2014, which would raise taxes on higher-income individuals and cut spending on health care programs by $400 billion, the Los Angeles Times' "Politics Now" reports.
Obama's FY 2014 spending blueprint joins rival proposals drafted by House Budget Committee Chair Paul Ryan (R-Wis.) and Senate Budget Committee Chair Patty Murray (D-Wash.) as Congress prepares to enter negotiations this summer on how to reduce the national debt (Hennessey, "Politics Now," Los Angeles Times, 4/10).
Obama's spending blueprint is similar to an offer he made in December 2012 to House Speaker John Boehner (R-Ohio) in negotiations to avoid the mandated spending cuts under sequestration, which took effect March 1 (Montgomery, Washington Post, 4/10).
Overall, the budget proposal would reduce the federal deficit by $1.8 trillion over a decade, bringing the deficit to about $500 billion in 2016 and down to 1.7% of the economy by 2024 (Crutsinger, AP/U-T San Diego, 4/10). The proposal would eliminate the cuts under sequestration and replace them with other savings. The sequester cuts include a 2% reduction to Medicare reimbursement rates for providers.
Some of the proposal's $400 billion in Medicare spending reductions would come from negotiating better prescription drug prices for beneficiaries, but the plan also calls for higher-income beneficiaries to pay more. Savings also would come from reducing Medicare payments to health care providers, including hospitals (California Healthline, 4/8).
For HHS' budget, Obama's proposal allocates a total of $80.1 billion, or about $4 billion more than was budgeted for the department in FY 2012. The budget plan also provides the government with more funding to implement the Affordable Care Act's health insurance exchanges (Corbett Dooren/Burton, Wall Street Journal, 4/10).
Obama's proposal also would raise revenue by limiting itemized deductions for higher-income families and by imposing a 30% minimum tax rate on households with annual incomes of more than $1 million (Washington Post, 4/10).
Under Obama's proposal, cost of living benefits for elderly U.S. residents who receive federal benefits would be lowered by creating a new way of calculating inflation increases, known as chained CPI.
The Obama administration estimates that change -- which has sparked criticism from some lawmakers and consumer advocacy groups -- would save about $230 billion over the next decade ("Politics Now," Los Angeles Times, 4/10). However, the White House has said some low-income elderly U.S. residents and veterans would be protected from the proposal (California Healthline, 4/9).
Meanwhile, the proposal leaves out cuts to Medicaid that the Obama administration proposed as recently as last year (California Healthline, 4/8).
The proposal includes programs touted by Obama in his State of the Union address, such as an increase tobacco taxes to pay for an early childhood education initiative ("Politics Now," Los Angeles Times, 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.