Earlier this week Congress and the Administration brought together a debt ceiling deal that avoided possible U.S. Government Default and implemented a structure by which the debt ceiling will be raised, spending cuts will be enacted, and further automatic cuts will happen should Congress and the Administration not agree on additional savings.
The debt ceiling agreement and subsequent actions in Congress are important to the National MS Society because it is estimated that approximately 40% of people living with MS rely on Medicaid or Medicare or a combination of both for their health care needs. Changes to these programs are therefore quite important and a top priority for the Public Policy Office.
In addition to agreeing to hold a vote on a Balanced Budget Amendment to the U.S. Constitution, the ‘Budget Control Act’ encompassed the following two key components:
1. Nearly $1 Trillion in cuts over 10 years by enacting discretionary spending caps
• The President gets authority to immediately increase the debt ceiling by $400 billion (to take us through Sept 2011) then another $500 billion happens automatically unless Congress passes a measure of disapproval (which would then be vetoed).
2. Creation of a 12 Member Joint Select Committee on Deficit Reduction in Congress to identify another $1.2 to $1.5 Trillion in cuts by November 23, with votes taken by December 23.
• Often referred to as a ‘super committee, it must identify and Congress must enact $1.2 trillion in debt reduction by end of year or a trigger kicks in which will sequester that amount through automatic, across the board cuts. (For a Q & A on the Committee see Kaiser Health)
• If the committee approves and Congress passes debt reduction less than $1.2 trillion, the automatic spending reductions would make up the difference. For example, if Congress only enacts $800 billion, then $400 billion will happen through across the board cuts.
• The committee can consider any part of the budget including entitlements (such as Medicaid) and revenues.
• Cuts to entitlements (to elicit savings) are likely to occur through policy changes, or structural reforms of the program(s). Policy changes could include greater state flexibility and federal waivers (impacting Medicaid possibly).
• If at least $1.2 trillion in savings is enacted, then the debt ceiling increases again, dollar for dollar, automatically, which will take us through 2012.
The debt bill exempts Social Security, Medicaid, and low income entitlement programs from sequestration, however, if the $1.2 billion in savings is not enacted, then Medicare provider and plan reimbursement can be cut but up to 2% as part of the sequester. The across the board cuts through sequestration would be split, 50% defense and 50% non-defense spending which creates incentive for the super-committee to actually put forward a plan.
The Society is pleased that Medicaid has been spared immediate cuts and has been exempted from potential across the board cuts down the road. We thank champions on Capitol Hill for helping make this happen. Moving forward, the Society will continue to collaborate with organizational partners to educate Capitol Hill about the importance of programs like Medicaid, Medicare, and Social Security to people living with disabilities. Stay tuned for opportunities to weigh in with your members of Congress and help protect these vital programs! If you are not signed up to receive the Society’s federal action alerts, be sure to sign up through this site (www.nationalmssociety.org/MSActivist) TODAY!
[For additional information on the financial burdens facing people living with MS, here is a fact sheet]