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The debt-limit deal "super committee"
Kaiser Health News
The deal President Barack Obama and Congress struck this week to raise the nation’s debt ceiling has prompted many questions about how a special “super committee” established by the law will affect federal health care programs.
By the day before Thanksgiving, the bipartisan, bicameral panel of 12 lawmakers must report recommendations to trim at least $1.2 trillion in federal spending over the next decade. If the committee members don’t reach consensus, or if Congress does not approve a package they offer by Dec. 23, a series of automatic spending cuts would kick in by 2013, creating additional pressure on the panel to act.
Q: Aren’t Medicare and Medicaid protected from cuts right now?
A: Yes—and no. The debt deal, which was signed into law by Obama on Aug. 2, makes $917 billion in discretionary spending reductions during the next decade. Neither Medicare nor Medicaid would be touched in those reductions.
However, that changes a bit in the second round of funding cuts called for in the law. Between now and Nov. 23, the super committee is asked to find at least an additional $1.2 trillion in debt reduction over 10 years. The panel can make those recommendations by changing any part of the budget. The committee could recommend cuts in entitlement programs, including Medicare and Medicaid. It could also propose tax increases.
Q. Won’t deep differences between the parties over the structure and future of entitlements and taxes prevent the panel from reaching any agreement?
A. Democrats are sure to insist on tax increases to match any spending cuts, which will anger Republicans, and Republicans will surely want entitlement cuts, which will upset Democrats.
Stan Collender, a partner at Qorvis Communications and former congressional budget staffer, said he gives less than 5 percent chance the committee will come to an agreement that Congress will approve. “In an era of hyper partisanship have you seen any other special committee of elected officials come up with some broad-based deficit reduction package looking at tax increases and spending cuts?” he asks.
If Congress doesn’t agree on a debt plan, the current law has a trigger mechanism that will automatically guarantee the $1.2 trillion savings beginning in 2013 through cuts in defense and other federal spending. Included in these cuts would be is a 2 percent reduction in Medicare payments to hospitals and other providers. Medicaid funding would not be touched by that trigger.
Sen. Pat Roberts, R-Kan., describes the idea of across-the-board cuts as “Armageddon” because of their severity and that half of the cuts would have to come from defense. “You can’t cut defense by 50 percent. You can’t cut Medicare providers, including doctors, more,” Roberts said.
Q: There have been plenty of commissions that have worked on debt reduction, including the Simpson-Bowles panel last fall. What makes this different?
A: The threat of the automatic, across-the-board spending cuts is what gives the debt panel more clout than its predecessors, including a commission established by Obama and co-chaired by former Sen. Alan Simpson, R-Wyo., and former President Bill Clinton’s chief of staff Erskine Bowles. Many lawmakers dislike the idea of surrendering any power over the federal purse, especially when it could mean that spending on a favorite program could be at risk.
