Budget experts focus on health costs

Nov 3 2011

Four well-known budget gurus testified Tuesday in a public super committee hearing, telling the panel they should raise revenues and overhaul expensive federal health programs in order to develop a budget compromise that will meet the $1.2 trillion, 10-year mandate.

The Associated Press/Washington Post: Bipartisan Budget Hawks To Debt-Cutting Panel: Raise Revenue, Revamp Health Programs
Four prominent deficit-cutters told Congress' bipartisan super committee on Tuesday that they should raise revenues and make major changes to expensive health programs on their way to a debt-reduction compromise that should exceed their $1.2 trillion, 10-year mandate. But in an indication of the partisan divisions that have stalled the evenly divided panel, lawmakers on the committee spent much of their time touting their own plans for mopping up red ink and sparking the economy (11/1).

Reuters: No Deal By U.S. Deficit Panel Would Be Dire: Experts
Budget experts warned on Tuesday of dire consequences if the congressional "super committee" fails to come up with a deficit reduction plan within a month, amid signs negotiations are faltering. ... Experts who have spearheaded past fiscal commissions said they feared party politics that were keeping lawmakers from tackling federal health and retirement programs spending and taxes would lead to a long-term decline of U.S. economic growth (Smith and Cowan, 11/1).

Los Angeles Times: Budget Veterans Have Advice For 'Super Committee'
Failure by Congress to approve a compromise would trigger mandatory cuts, slicing equally across defense and domestic accounts, that both sides want to avoid. But because the mandatory cuts would not take effect until 2013, many in Congress think they can undo them in the year ahead. Even as private conversations among smaller groups of committee members continue, the panel has essentially deadlocked along partisan lines. … But the experts warned that entitlement programs should not be off-limits. Simpson called the AARP ads "disgusting" for trying to dissuade committee members from cutting entitlement programs (Mascaro, 11/2).

The New York Times: Deficit Panel Is Warned That It Must Not Fail And Is Urged To Compromise
Four experts on fiscal policy -; two Democrats and two Republicans -; told the panel that Congress should reduce the budget deficit by adopting spending cuts and increases in tax revenues. One co-chairman of the president's fiscal commission, Erskine B. Bowles, said he had great respect for each member of the committee, but added, "I am worried you're going to fail -; fail the country" (Pear, 11/1).

Kaiser Health News: Health On The Hill: Budget Experts Warn Super Committee About Consequences Of Failure
Kaiser Health News staff writer Mary Agnes Carey talks with Jackie Judd about the super committee's public hearing Tuesday when it heard from the leaders of previous deficit reduction groups (11/1). Read the transcript or listen to the interview.

Kaiser Health News Video: Simpson, Bowles Blast Health Care Spending
In this video, former Sen. Alan Simpson and former Clinton White House chief of staff Erskine Bowles both zeroed in on health care costs and the deficit during testimony before the super committee on Tuesday (11/1).

Market Watch: Fiscal Experts Sternly Warn Super Committee
The heads of high-profile deficit-cutting commissions on Tuesday urged the congressional super committee to aim high just weeks ahead of its deadline, saying failure to reach an agreement about shrinking the U.S. debt could result in another downgrade. ... In public, at least, super committee members still appear far apart on how to achieve savings. Co-chair Rep. Jeb Hensaling, a Texas Republican, said the super committee can't "tinker around the edges" of entitlement programs like Medicare and Medicaid. Democrats, however, have resisted making cuts to those programs part of the super committee's work (Schroeder, 11/1).

Politico Pro: Debt Panel Questions Focus On Health
The panel Tuesday pressed health-related questions to Simpson and former Sen. Pete Domenici, both Republicans, and former White House officials, Alice Rivlin and Erskine Bowles, both Democrats. All are veterans of previous deficit-reduction commissions. Broadly, Republicans signaled an interest in shifting the government Medicare program to one that relied more on private insurers. They focused on how premium hikes, means-testing and stricter eligibility requirements might impact Medicare spending, and argued for more state flexibility for Medicaid. Democrats focused more broadly on overall health care costs, and singled out private insurers as driving rising health care costs. Their questions largely centered on ways to accelerate many programs in the Affordable Care Act, particularly on how Medicare could use its heft as a health care purchaser to drive down costs (Dobias, 11/2).

The Hill: Super Committee Members Examine Medicare Proposals
Super committee members from both parties raised concerns Tuesday about a new bipartisan proposal for overhauling Medicare. The 12-member panel is less than a month away from its deadline for finding at least $1.2 trillion in deficit reduction, but it's said to be looking for closer to $4 trillion. That would require substantial health care savings, but super committee members clearly still have differing opinions about how -; and whether -; to pursue major changes to Medicare and Medicaid (Baker, 11/1).

The Washington Post: Super Committee Must Not 'Fail The Country,' Bowles Says, Offering His Own Plan
Bowles then surprised the committee by laying out a path to compromise that would split the difference between the competing debt-reduction proposals each side offered last week. He challenged Democrats to accept deeper cuts to federal health programs and Republicans to embrace $800 billion in new taxes, as House Speaker John A. Boehner (R-Ohio) did during this summer's negotiations over the federal debt limit (Montgomery, 11/1).

Modern Healthcare: Bowles Supportive Of Raising Medicare Age
The former co-chairman of the president's fiscal commission responded favorably to the concept of increasing the eligibility age of Medicare beneficiaries during a hearing of the Joint Select Committee on Deficit Reduction Tuesday. "We did not have that in our plan," Erskine Bowles, former chief of staff to President Bill Clinton and co-chairman of President Barack Obama's National Commission on Fiscal Responsibility and Reform, said in the hearing's question-and-answer period. "As I have thought about it since that time, under the Affordable (Care) Act, we provide subsidies for people who have really chronic illnesses and people who have limited income so they can afford health care insurance in the private sector," he said, adding that means people who are 65, 66 and 67 should be able to get insurance (Zigmond, 11/1).

The Washington Post: Super Committee's Secrecy Disappoints Republican House Freshman
But the hesitation of some freshmen suggests that the super committee's recommendations may face the type of challenge that has become familiar in the House since Republicans took over in January. A bloc of Republicans might reject the super committee's strategy, despite the fact that the group was formed specifically to tackle the problem that propelled many of them to office (Helderman, 11/1).

Reuters: U.S. Military Retirees Fret About Health Care Fees
In recommendations to the budget-cutting congressional super committee in September, President Barack Obama proposed two steps to offset rising military health care costs. He said Congress should impose a $200 annual fee on Tricare-for-Life, a health insurance plan for military retirees 65 and older that pays for most expenses not covered by the government's Medicare insurance plan for the elderly. The fee on Tricare-for-Life, which is now free, would then increase annually according to a cost of living adjustment. The White House estimated the proposal would save $6.7 billion in mandatory federal spending over 10 years (Alexander, 11/2).

The Fiscal Times: Super Committee: Gridlock Again on Taxes, Spending
Co-chair Jeb Hensarling, R-Texas., said that he supported the recommendations to "Go Big" and reiterated his position that a grand bargain needs to include reforms to health care and retirement programs. "Certainly we cannot tax our way out of this crisis," Hensarling said in his opening statement. "We cannot solve it by tinkering around the edges of our entitlement programs" (DePaul, 11/2).