Obama’s Sequestration Plan Includes Medicare Cuts; GOP Rejects Plan
On Thursday, President Obama released a two-stage plan to avert mandated spending cuts under sequestration that calls for $1.6 trillion in tax increases, in exchange for unspecified spending reductions this year followed by legislation in 2013 that would cut $400 billion from Medicare and other federal health programs over a decade, the AP/Sacramento Bee reports (Espo, AP/Sacramento Bee, 11/28).
House Speaker John Boehner (R-Ohio) immediately rejected the proposal, saying that he expected more significant entitlement reforms in exchange for compromises on taxes (Montgomery/Kane, Washington Post, 11/29).
The proposal, which was delivered to the Capitol by Treasury Secretary Timothy Geithner, mirrors entitlement savings proposed by Obama in his fiscal year 2013 budget proposal, which Republicans have said is insufficient to tackle the program's structural problems.
The two-stage proposal would defer for one year about $110 billion in spending cuts domestic and defense programs that are set to take effect Jan. 2 (Hook et al., Wall Street Journal, 11/29).
In addition, the plan calls for year-end approval for new spending that, among other things, would prevent a scheduled reduction to Medicare physician reimbursement rates (AP/Sacramento Bee, 11/28). However, the proposal does not include major structural changes to Medicare, such as raising the eligibility age.
According to the Journal, Republicans have suggested a willingness to accept about $800 billion in revenue increases over 10 years, in exchange for significantly greater reductions in entitlement spending (Wall Street Journal, 11/29).
Boehner 'Disappointed' With Slow Progress
After meeting with Geithner, Boehner said he is "disappointed" that "no significant progress" has been made in negotiations since his meeting with Obama two weeks ago, Reuters reports (Cowan/Lawder, Reuters, 11/29).
"Despite claims that the president supports a balanced approach, the Democrats have yet to get serious about real spending cuts," Boehner said. He noted that unless the White House makes a better offer, there is a "real danger of going off the fiscal cliff."
However, he added that he remains "hopeful that productive conversations can be had in the days ahead" (Berman, The Hill, 11/29).
Democrats Wait for Counter Offer
Meanwhile, Senate Majority Leader Harry Reid (D-Nev.), after a separate meeting with Geithner and administrative officials, said, "Republicans know where we stand."
He added, "We're still waiting for a serious offer from the Republicans" (Mascaro/Parsons, "Politics Now," Los Angeles Times, 11/29).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.