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Federal Deficit Reduction
Federal Deficit Reduction
Last Updated: 11/22/2011

The Latest: The co-chairs of the deficit reduction “super committee” announced that the committee has failed to come to an agreement on a deficit reduction strategy. The bipartisan 12-member committee was created by the Budget Control Act to craft a plan by November 23 to reduce the national deficit by at least $1.2 trillion. The committee’s failure to reach an agreement means that automatic spending cuts totaling $1.2 trillion will take effect during January 2013, which includes reductions in Medicare payments to hospitals and other providers of 2 percent over nine years (2013 to 2021). Additional information is available in HAP Memo 11-122 .

Background: The President signed legislation to raise the nation’s debt ceiling and reduce the deficit. The measure raises the debt ceiling by $900 billion ($400 billion immediately and $500 billion during September following a presidential request) and enacts cuts of $917 billion over ten years. While Medicare and Medicaid would not be impacted by the initial cuts, the legislation tasks a 12-member, bipartisan Congressional committee with recommending $1.2-1.5 trillion in additional savings by November 23. Congress must vote on the recommendations by December 23, and the President could request an additional increase in the debt ceiling of $1.5 trillion if passed. If Congress fails to act on the committee’s proposal or send a balanced budget amendment to the states before the end of the year, the bill would automatically trigger across-the-board cuts totaling $1.2 trillion in mandatory and discretionary spending beginning during 2013. Medicaid would not be subject to the cuts, but Medicare provider payments would face a cut of no more than 2 percent over nine years (2013-2021). The President would then be authorized to request an additional increase in the debt ceiling of $1.2 trillion. Additional information is available in HAP Memo 11-71.

Additional Information:

Available Resources:

HAP Joint Letter to Super Committee on Removing Medicaid and Medicare from Consideration for Cuts (November 2011)
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Bipartisan Congressional Letter to Joint Select Committee on Deficit Reduction about Mandatory and Discretionary Spending and Revenues (November 2011)
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Congressmen Lobiondo and Neal Letter to House Committee on Ways & Means and the House Committee on Energy & Commerce about Preserving Access to Rehabilitation Hospitals (November 2011)
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Public Perception of Health Care in Pennsylvania: Terry Madonna Opinion Research Annual Omnibus Poll (October 2011)
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The House Ways and Means Committee’s Potential Health Offsets Paper (September 2011)
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AHA-HAP Federal Budget Advocacy Day Materials
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Letters to President Obama and Members of the Pennsylvania Congressional Delegation on Medicaid and Children’s Health Insurance Program (CHIP) Cuts
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Issue Brief: Medicare
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Issue Brief: Medicaid Block Grants
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HAP Federal Advocacy Message (July 2011)
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HAP Letter to PA Congressional Delegation on Funding Reductions to the Medicare and Medicaid Programs (June 2011)
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Chart: HAP Summary of Selected Provisions of Several Key Congressional Budget Proposals
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