Senate GOP Head Rolls Out ‘Last-Choice Option’ To Resolve Budget Talks
On Tuesday, Senate Minority Leader Mitch McConnell (R-Ky.) unveiled an elaborate plan he described as a "last-choice option" to break the stalemate on a fiscal year 2012 budget and deficit reduction package, the Washington Post reports. McConnell released the plan hours before congressional leaders convened at the White House for their third consecutive budget meeting this week (Montgomery/Kane, Washington Post, 7/12).
Background on Negotiations
The negotiations -- which in recent days have included President Obama -- are at a standstill because of partisan disagreements over taxes and entitlement spending.
Republican lawmakers want broad spending cuts and entitlement reforms, while Democrats have sought new tax increases to generate revenue.
Negotiators also have been trying to reach an agreement to increase the government's current borrowing cap of $14.3 trillion or risk a federal default scheduled to take effect on Aug. 2 (California Healthline, 7/12).
Details of McConnell Proposal
Under McConnell's plan, the Obama administration would seek Congress' approval to raise the debt ceiling by $2.5 trillion over three installments in the next 18 months (Washington Post, 7/12). In addition, each request would be accompanied with proposals for significant entitlement cuts favored by the GOP (Schatz, CQ Today, 7/12). For each of the requests, Congress would pass a so-called "measure of disapproval," which Obama would veto. Those vetoes can be overridden by a two-thirds majority in each chamber, the Los Angeles Times reports.
However, since neither party holds such a majority, the debt ceiling increase would take effect by default (Mascaro/Oliphant, Los Angeles Times, 7/12).
Meanwhile, the proposed spending cuts would be debated in Congress under normal appropriations procedures, without a guarantee that lawmakers would ever vote on them.
According to USA Today, the McConnell plan essentially gives Obama greater authority to avoid a default while exempting Republicans from responsibility if one did occur (Jackson, USA Today, 7/13).
During a speech on the Senate floor to explain his plan, McConnell acknowledged that the plan is "not my first choice," but he noted that as a bipartisan deal looks increasingly unlikely before the approaching Aug. 2 deadline, the proposal shows that lawmakers agree that a federal default on debt obligations is not an option (Washington Post, 7/12).
A Senate Democrat also noted the plan was brought up and "not rejected" during the White House budget meeting later in the day, adding that it was "set aside as a fall-back plan" (CQ Today, 7/12).
Response to McConnell Plan
According to the Post, Democratic leaders privately embraced the plan as an option to circumvent the looming fiscal crisis. Senate Majority Leader Harry Reid (D-Nev.) told reporters that he is "willing to look at [the plan]." Meanwhile, some top Republicans and key tea party-affiliated bloggers openly expressed skepticism and condemnation of it.
In an interview with Fox News, House Speaker John Boehner (R-Ohio) refused to dismiss the proposal, which he said would serve as a "backup plan if we can't come to an agreement" (Washington Post, 7/12). However, Sen. Tom Coburn (R-Okla.) -- who has been a prominent participant in the ongoing fiscal debate -- called the plan "a political response" and "a political answer" (CQ Today, 7/12).
According to several aides, Reid has asked McConnell to consider forming a joint bipartisan committee to draft a plan that is more enforceable and more acceptable to reluctant GOP lawmakers (Washington Post, 7/12).
Meanwhile, the White House took a "strictly non-committal" stance on the McConnell plan, according to Politico. White House press secretary Jay Carney said, "The president continues to believe that our focus must remain on seizing this unique opportunity to come to agreement on significant, balanced deficit reduction" (Mason, Politico, 7/12).
CBO Chief Offers Cost-Savings Ideas
On Tuesday, Congressional Budget Office Director Douglas Elmendorf offered a "menu of possibilities" of spending cuts that Congress might consider as they debate strategies to lower federal spending as part of the budget and deficit-reduction package, CQ HealthBeat reports.
In a speech during a U.S. Chamber of Commerce forum, Elmendorf suggested:
- Scaling back the scheduled expansion of Medicaid in 2014 and insurance subsidies under the federal health reform law;
- Raising the Medicare eligibility age from 65 to 67; and
- Raising Medicare beneficiaries' share of premium costs from 25% to 35% (Norman, CQ HealthBeat, 7/12).
Cantor Confirms Discussions of Spending Cuts in Medicaid, Medicare
House Majority Leader Eric Cantor (R-Va.), who also delivered a speech at the Chamber of Commerce forum on Tuesday, confirmed that spending cuts in Medicare and Medicaid had been discussed during the budget talks led by Vice President Biden. He added that the proposals still are under consideration in the ongoing negotiations with the White House.
A summary of the cuts prepared by Cantor and obtained by CQ HealthBeat showed a range of spending reductions of between $334 billion and $353 billion over 10 years (Norman/Reichard, CQ HealthBeat, 7/12). The list includes 27 proposals that would charge copayments for home health care and clinical laboratory services, and increase premiums and copays for high-income Medicare beneficiaries, among other key changes to the two entitlement programs (Pear, New York Times, 7/12).
Questions About Savings Arise With Proposed Medicare Eligibility Hike
A proposal to raise the Medicare eligibility age from 65 to 67 garnered some support from Obama this week as part of the budget and deficit reduction negotiations, but health policy experts and analysts have questioned the potential savings of such a move, CQ Today reports.
Observers note that younger Medicare beneficiaries tend to be healthier than older ones, which means that health care costs for beneficiaries ages 65 to 67 would be considerably lower. As a result, lawmakers would have to consider whether the political cost of raising the eligibility age would outweigh the fiscal benefits, according to CQ Today (Kenen, CQ Today, 7/12).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.