Budget negotiations: Administration gives momentum to health care cuts

Jul 6 2011

Obama administration officials have advanced a significant amount of cuts from Medicare and Medicaid in the debt ceiling talks — saying the money could come from hospitals and other facilities without directly imposing new costs on beneficiaries or making radical changes to the Medicare program.

The New York Times: Administration Offers Health Care Cuts As Part Of Budget Negotiations
Obama administration officials are offering to cut tens of billions of dollars from Medicare and Medicaid in negotiations to reduce the federal budget deficit, but the depth of the cuts depends on whether Republicans are willing to accept any increases in tax revenues. Administration officials and Republican negotiators say the money can be taken from health care providers like hospitals and nursing homes without directly imposing new costs on needy beneficiaries or radically restructuring either program (Pear, 7/4).

Politico: Guide To Health Industries At Risk In Debt Deal
Last year, health care industry groups gave President Barack Obama's reform plan the support it needed to become law. Now, those same groups are sweating over what might happen in the debt ceiling talks — because their fortunes might be about to change. Critics of the reform often attack it as a collection of "backroom health care deals," and Democrats did have an easier time passing it because powerful groups — like hospitals and the drug industry — endorsed the legislation, or at least agreed to hold their fire. Some of them did get rewarded for their help, by being spared from deeper cuts or other legislation they've opposed for years (Nather, 7/4).

Politico Pro: Searching For Magic Words To Seal The Deal
When is a Medicare cut not a Medicare cut? In truest Washington form, the answer is not so clear. The nation's financial health isn't the only thing in flux as Congress continues to haggle over ways to reduce federal spending. As party leaders try to balance the need for new money with the desire to tame spending, the vernacular used by lawmakers to define everything from a tax cut to a cost saver could also change. At issue are the give-and-take demands leaders from both parties have made so far. Democrats want Republicans to agree to measures that generate new revenue, either in taxes or by closing existing loopholes that favor the wealthy. Republicans, however, oppose any deal that boosts taxes, and instead insist Democrats find savings in entitlement programs, namely Medicare and Medicaid (Dobias, 7/1).

CBS (Video): Will Obama Bypass Congress On Debt Ceiling?
What it means, according to the Bipartisan Policy Center, is that come early August, the Treasury would only have enough money to pay about 56 percent of its bills. Former Treasury official Jay Powell says the government would likely pay interest first, leaving popular domestic programs in jeopardy. "It could be Social Security. It could be Medicare. It could be Medicaid. We can't pay everything," Powell says. The stalemate in Washington has some asking if President Obama could simply bypass Congress and order the Treasury to keep borrowing (Johnson, 7/3).