President Signs Budget Deal; Concerns About Health Care Cuts Persist
On Tuesday, President Obama signed the fiscal year 2012 budget and deficit reduction agreement (S 365), ensuring that the U.S. will not default on its debts, the New York Times reports (Steinhauer, New York Times, 8/2).
Hours earlier, the Senate passed the House-approved measure 74-26, ending months of contentious negotiations (Rogers, Politico, 8/2).
Details of the Deal
Under the agreement, federal discretionary spending will be cut by a total of about $2.4 trillion over the next decade, while the debt ceiling will be raised in two stages. The measure will:
Enact an immediate debt-limit increase of $400 billion, followed by another $500 billion increase this fall and a further increase of between $1.2 trillion and $1.5 trillion next year, at the president's request;
Require a new 12-member bipartisan, bicameral congressional panel to develop another deficit-reduction package with $1.5 trillion in cuts, which Congress would have to approve by late December of this year; and
Trigger $1.2 trillion in automatic spending cuts, which would be evenly distributed between defense and non-defense purposes, should the federal government reach certain spending caps (California Healthline, 8/2).
The immediate debt-limit increments -- totaling $900 billion -- will be offset by $917 billion in federal spending reductions over 10 years that will not affect Medicaid or Medicare, Politico reports (Politico, 8/2). A House GOP summary of the debt deal clarified that the automatic spending cuts will apply to Medicare, not Medicaid, other entitlement programs or civil or military spending. A White House fact sheet also indicated that the cuts to Medicare will be limited to 2% of the program's cost (California Healthline, 8/2).
Cuts to Medicare Payments, Reduced Access for Beneficiaries Likely, Observers Say
Although the debt deal shields Medicare from immediate spending cuts, failure by Congress to enact further spending reductions at the end of this year would trigger a series of automatic cuts of as much as $1.2 trillion, the Los Angeles Times reports (Levey/Cloud, Los Angeles Times, 8/3).
Under the deal, Medicaid is exempted and Medicare is protected from deep spending cuts if the triggers are engaged. However, the congressional deficit-reduction advisory committee that the deal creates is not bound by those stipulations (California Healthline, 8/2).
Health care industry analysts believe the committee likely will target Medicare for cuts (Los Angeles Times, 8/3). Officials in the hospital industry -- which agreed to about $155 billion in spending cuts to help subsidize the cost of expanding health coverage to more uninsured U.S. residents under the health reform law -- warn that further cuts could add additional pressure on struggling emergency departments and force trauma units to close (Adamy, Wall Street Journal, 8/2).
In addition, lobbyists for the providers have said that the potential cuts could compromise Medicare beneficiaries' access and quality of care (Jan/Emery, Boston Globe, 8/3).
Meanwhile, the American Medical Association is preparing for further Medicare payments cuts on top of a scheduled cut in January. 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 (Ethridge, CQ Today, 8/3).
Panel Draws Opposition, Lawmakers Move Forward With Selection Criteria
The creation of the 12-member bipartisan, bicameral congressional panel -- which will be known as the Joint Select Committee on Deficit Reduction -- has drawn opposition from both Democrats and Republicans who say it relinquishes their role in writing and revising legislation for the $1.5 trillion in additional savings, the New York Times reports (Pear/Rampell, New York Times, 8/1).
Meanwhile, Senate and House leaders have begun to create selection criteria for the panel's 12 members, and some lawmakers are nominating colleagues or privately lobbying for a place on the panel (Ota, CQ Today, 8/2).
The debt deal requires Senate Majority Leader Harry Reid (D-Nev.), Senate Minority Leader Mitch McConnell (R-Ky.), House Speaker John Boehner (R-Ohio) and House Minority Leader Nancy Pelosi (D-Calif.) to each appoint three members to the committee within the next 14 days (Shiner/Brady, Roll Call, 8/3).
According to CQ Today, some of the names that have been mentioned as possible candidates include Senate Finance Committee Chair Max Baucus (D-Mont.), Senate Minority Whip Jon Kyl (R-Ariz.) and House Budget Committee Chair Paul Ryan (R-Wis.) (Ota, CQ Today, 8/2).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.