Debt panel deliberations involve gloom, doom and blame

Nov 18 2011

As indications continue to suggest the super committee stalemate continues, the panel members and other lawmakers are pointing fingers and assigning blame. Health programs -- including Medicare -- continue to be a sticking point. News outlets also examine how the threatened cuts that would kick in if the panel doesn't find success would impact the health sector.

Los Angeles Times: Gloom Around Deficit-Reduction Panel Grows
But the lawmakers' willingness to set aside partisan differences appeared to do little to break the impasse gripping the 12-member super committee. With just a week remaining before the deadline to vote on a plan, gloomy forecasts began to proliferate. Republicans have drawn a line over the amount of new taxes they will agree to in exchange for reductions in spending on Medicare and other domestic programs (Mascaro, 11/16).

The Washington Post: GOP Supercommittee Members' Tax Plan Gives Party An Identity Crisis
The two conservative lawmakers have pushed the increases as part of their work on the bipartisan congressional "supercommittee" tasked with finding at least $1.2 trillion in deficit reductions by a Thanksgiving deadline. Their plan, which also addresses entitlement spending, would generate at least $300 billion in new tax revenue over the next decade by overhauling the tax code to lower rates but also eliminate deductions and loopholes (Wallsten, 11/16).

The Associated Press/Washington Post: Stalemated Debt-Reduction Panel Members Casting Blame More Than Trying To Resolve Differences
Increasingly gripped by stalemate, Republicans and Democrats on a congressional deficit-reduction supercommittee now seem to be devoting more time to assigning blame than working through the sharp differences that divide them. Despite small steps in recent weeks toward addressing core solutions to the nation's intractable deficit problem, such as new taxes and curbs on the growth of enormously expensive government benefit programs, both sides said further progress had come to a halt (11/17).

The Wall Street Journal: Deficit Stalemate Signs Rise
One week before Congress's deficit-cutting supercommittee hits its deadline, and with signs of stalemate increasing, lawmakers Wednesday grappled with the consequences of possible failure. Some lawmakers pushed to water down automatic budget cuts that kick in if the panel fails, especially those that would hit the Pentagon. The group has until Wednesday to find a way to reduce deficits by $1.2 trillion over the next decade (Bendavid and Hook, 11/17).

Reuters: U.S. Deficit Committee Locked In Budget Stalemate
Budget talks in Congress were locked in stalemate on Wednesday as Democrats and Republicans waited for the other side to make a new offer on taxes and healthcare. With a deadline less than a week away, members of a 12-member "super committee" tasked with finding $1.2 trillion in budget savings confronted the same barriers that have thwarted earlier efforts to rein in the growing national debt, which crossed the $15 trillion mark on Tuesday (Cowan and Smith, 11/16).

Bloomberg: Congress Deficit-Cut Panel Members Hardening Positions As Deadline Nears
Republicans and Democrats on Congress's supercommittee are hardening their positions with less than a week until the deadline to propose a plan to cut the U.S. deficit. Texas Representative Jeb Hensarling, the panel's Republican co-chairman, said yesterday his party won't go beyond its offer to increase tax revenue by $300 billion to cut the debt until Democrats offer a plan to address the long-term growth in federal spending on entitlement programs such as Medicare (Przybyla, 11/17).

Politico: Supercommittee Searches For A Plan B
As Democrats continued to demand more revenue increases and Republicans called for deeper cuts to health care programs, there was increased chatter about the next steps to break the stalemate and avoid the full mandated budget cuts if no agreement is reached before Thanksgiving. One plan would have the supercommittee vote on competing Republican and Democratic proposals, aimed at forcing the other side's hand (Sherman and Raju, 11/16).

National Journal: Deficit Panel Squabbles Over Health Programs
A dispute broke out between super-committee negotiators on Wednesday over whether other committees can cut health programs in a two-step deficit-reduction process. The disagreement involved the panel's possible two-step strategy, which would have committees with tax jurisdiction raising billions from an overhaul of the tax code next year. Republicans insisted that the committees also have the authority to cut any programs under their jurisdiction, including Medicare and Medicaid. Democrats balked, saying that the second-step committee cuts could come from tax changes only. Earlier on Wednesday Sen. Orrin Hatch, R-Utah, warned the super committee not to saddle other committees with instructions to raise billions in revenues from tax reform alone in 2012 (McCarthy, 11/16).

The Fiscal Times: The Super Committee Casts a Hungry Eye on Medicare
If the 12-member bi-partisan committee fails to come up with a plan, an automatic 2 percent across-the-board cut in Medicare provider payments will go into effect starting in 2013 ... But there are many other ways to achieve the same level of savings, CBO said (Goozner, 11/17). 

Market Watch: Health-Care Cuts Likely Focused On 4 Areas: Moody's
Moody's Investors Service expects a government committee that is working on recommendations to reduce the U.S. budget deficit is likely to look for potential health-care spending cuts in four key areas. Moody's expects the committee will look at areas including Medicare cost-sharing for seniors, payments to healthcare providers, prescription drug costs, and Medicaid spending--areas that it said prior-deficit cutting proposals have found some common ground (Stynes, 11/16).

Modern Healthcare: Medicare Cuts Would Sock Not-For-Profits: Fitch
Not-for-profit hospital operating margins would drop by roughly 29%, on average, should Medicare reimbursement decline by 2%, according to projections by Fitch Ratings... The average 2010 operating margin for hospitals rated by Fitch was 2.6%. On average, operating margins would drop to 1.8% should Congress fail to approve an alternative to automatic deficit-reduction cuts that could curb Medicare spending on hospitals by as much as 2%. The Joint Select Commission on Deficit Reduction has until Thanksgiving to propose an alternative for Congress to consider (Evans, 11/16).

The Associated Press: GOP Deficit Reduction Plan Limits Itemized Tax Deductions, Health Insurance Tax Breaks
A GOP plan to raise taxes by $290 billion over the next decade would limit deductions for mortgage interest, charitable donations and state and local taxes as part of a deficit-reduction deal. Some workers could also see their employer-provided health benefits taxed for the first time, though aides cautioned that the plan is still fluid (Ohlemacher, 11/17).

California Healthline: Rural Critical Care Access Hospitals Could Get Hit
In addition to Medicare reimbursement rate cuts, other [super committee] reduction proposals have included eliminating all rural hospital payment programs, according to David Lee, a governmental affairs expert for the National Rural Health Association (Gorn, 11/16).

Related, from KHN: Interest Group Wish List: A Window Into The Challenge For The Super Committee (11/14). 

Politico Pro: Health Industry Faces Threat Of Automatic Cuts
If the super committee doesn't get a deal in eight days, those automatic health care cuts could be on the way -; and providers are getting nervous. It's a nightmare scenario that the provider groups have struggled to prepare their members for. Under the same law that created the super committee, cuts to almost all of Medicare would be capped at 2 percent. Federal actuaries estimate that about $123 billion could ultimately get shaved from provider payments. And that's becoming a stronger possibility every day -; especially after super committee Co-Chair Jeb Hensarling (R-Texas) blamed Democrats Wednesday for stalling the talks by rejecting changes to Medicare (DoBias, 11/16).