Both Nancy Pelosi and Harry Reid are making some bold predictions about the Catfood Commission II and their roles in it. Pelosi said she wouldn’t appoint anyone to the committee who didn’t oppose benefit cuts to Medicare, Medicaid and Social Security. And Reid tried his own dollar-for-dollar pledge by stating there must be a 1:1 ratio between tax and cut solutions on the committee.
First of all, Pelosi’s appointees will matter much less than Reid’s, since it will only take one Democrat to break any impasse against a phalanx of anti-tax Republicans. See Mark Warner angling for a spot; I would imagine at least one Gang of Six member will get on there from the Democratic side. As for the 1:1, that’s a nice try. But it’s more of a quaint theory than an undying pledge.
I think it’s pretty clear that the committee will look to enact the same kind of cuts that the President and John Boehner wanted in their grand bargain. That includes the objectively bad policy of raising the Medicare eligibility age, cost-shifting in the form of higher co-pays and deductibles, means testing, using the “blended rate” for Medicaid that would lower federal participation in the program, or even the return of chained CPI. Republicans will say “even Barack Obama supported this” as they tick off each one.
Maybe nobody on the commission will agree to this. Maybe it’ll be a wise council agreeing to better policies like reforming dual eligibles by putting them in the cheaper program to administer, or negotiating on prescription drug prices in Part D, or even delivery system reforms like all-payer. Or maybe they wash their hands of the deadlocked commission and move to the trigger, which would cut provider payments across the board by about $120 billion over ten years.
But let’s be realistic. This gang of 12 won’t even be health policy experts, in all likelihood. They’ll just hack away at safety net programs, most of them in the health sector. And they only need one Democrat to bow to lobbyist pressure and sign off on an unbalanced deal, rather than walk away and end up with that provider cut.
If the debt committee hits a dead end, the agreement between President Barack Obama and congressional leaders decrees an automatic 2 percent cut to Medicare providers. That’s on top of a 6 percent cut already enacted to finance the president’s health care law, according to the nonpartisan Kaiser Family Foundation. And the earlier cut is still being phased in.
“The story isn’t over,” said Joe Baker, president of the Medicare Rights Center, a New York-based advocacy group. “The future of the programs really hangs in the balance. It could lead to deep cuts and irreversible changes to Medicare and Medicaid that shift costs to beneficiaries.”
The hospital industry, which agreed to cuts of $150 billion to help pay for Obama’s expansion of coverage to the uninsured, says it’s just about had it. Nonpartisan analysts in the government predict the cuts in the health care law alone are enough to push about 15 percent of hospitals, nursing homes and home health agencies into the red.
“America’s hospitals find it difficult to support a debt ceiling proposal that could negatively affect Medicare for our nation’s seniors,” American Hospital Association president Rich Umbdenstock said in a statement. “Access to care could be curtailed by further cuts to Medicare funding for hospital care.”
The hospital industry will be unrelenting on committee members on the Democratic side. There’s also the sword of Damocles hanging over the head of the committee, the sustainable growth rate, which doctors and hospitals want altered (usually called the “doc fix”) at great cost to the Treasury. That hangs on the periphery of this debate much like the Bush tax cuts.
You could definitely see the committee deadlocking, and then in the 2012-2013 period, new cuts created to offset defense and Medicare provider cuts, with the result being a large, unbalanced all-cuts deal. But the recent history of negotiation suggests an “historic agreement” being reached, in that the middle class would be history.