Friday, August 12, 2011

The Debt Deal - with Rep. Ed Markey

Last night I was one of about 30 people attending a meeting with Representative Ed Markey (D-MA) to discuss the Budget Control Act and its likely effect on health care.  It was an information exchange, as he presented how the Budget Control Act is slated to play out and then listened to our concerns as to how that will most likely affect health care, ourselves, and our constituents/clients.

The Debt Deal (Budget Control Act) Basics
Markey laid out the "Debt Deal" as having 3 major steps, with Step 1 already complete: passage by the House and Senate and President Obama's signature on the Bill last Monday, August 1, 2011.

Step 1 is designed to trim $917 Billion from the budget over 10 years through spending cuts and caps.  $350 Billion will come from defense with the remainder from discretionary funds, which could include health care areas except Medicare and Medicaid.

Step 2 is the Super Committee, comprised of 12 members: 6 Republicans and 6 Democrats -- divided evenly between House and Senate from each party.  These legislators must hammer out an agreement by November 23, 2011 that reduces the federal deficit by $1.2 - $1.5 Trillion over 10 years and Congress must then pass that agreement as a Bill by December 23, 2011.
  • In this step, nothing is off the table as far as spending cuts or caps or measures to increase revenues. 
  • The Super Committee must reach agreement - i.e., reach agreement by simple majority (7 yes votes). 
  • If they reach an agreement, that agreement goes to Congress as a bill they must vote on with no options for changes, filibuster, or other political maneuvering.  A simple yes/no vote is required.  
  • The Bill then goes to the President for signature, with Presidential veto possible but unlikely. 
Step 3 kicks in only if Step 2 fails totally -- i.e,. there is no agreement --, Congress fails to approve an agreement, the President vetoes the resulting Bill, or it fails to reduce the deficit enough*.  Step 3 triggers automatic cuts in spending that are basically 50/50 between defense and non-defense budget items. 
*Note that Step 3 would kick in, at a reduced level, if Step 2 results in passage of a Bill that is significantly less than the expected $1.2-$1.5 Trillion.  The cuts in Step 3 would be amounts that would bring the total deficit reduction to the $1.2-$1.5T.
    Super Committee
    The 12 legislators chosen for this high stakes poker game have a great deal of latitude in how they slash the budget to reach $1.2-$1.5 Trillion in deficit reduction.  Nothing is off the table, according to the rules of the game. That includes Medicare, Medicaid, and other programs that are actually protected in Steps 1 and 3.

    This step also includes the possibility of revenue generation.  However, when half the Super Committee has already pledged no tax increases, that immediately ties the other half of the Committee's hands.  As Markey pointed out last night, GOP leadership excluded any Republican leaders from the Super Committee who had indicated they were open to raising taxes**. 

    Response from Attendees
    Attendees included some people from Cambridge Health Alliance, two different Alzheimer's advocacy groups, Mass Senior Action Council (they were out in force with half a dozen attendees -- great advocacy!), Hallmark Health, myself from Tri-CAP (also representing the HealthMINT Network and the Heritage Tenants Association), a Mass Elders advocacy group, individuals representing themselves and their family members, and state senators Pat Jehlan (D-Medford) and David Linsky (D-Natick) and a representative from sate Senator Katherine Clark (D-Malden).  Some groups were represented but I just cannot recall their names, so if were there and I missed you feel free to comment on this post and add that you were there!

    Concerns included fears that:
    • the automatic deficit reduction strategy would decimate essential health research and that will result in far-reaching future medical costs that will only increase our debt, 
    • cuts to medicare providers will result in increased health costs to everyone else,
    • no one seems to be talking about increasing revenues to offset the deficit
    • the GOP is playing hardball while we're caving in and that has to stop
    • it's not a negotiation if one side comes to the table refusing to consider other options (i.e., the "no tax increases" stand by the GOP),
    • defense cuts might unfairly reduce VA benefits, and
    • fear that those already slipping over the edge into an abyss of depression, job loss or pay cuts, housing loss, stress, mental health issues, etc. are not finding any relief and this Bill makes that worse. 
    Markey then asked us each to tell him which Step (2 or 3) we would "vote" for so he can go back to the House and talk to his colleagues.  Nineteen (19) participants voted for Option 2 as preferable over the seven (7) votes for Option 3.  He also reminded us that every legislator needs to hear from all of us.  If we want to have a say in the final outcome, we must mobilize and make our voices heard on the subject.  The Tea Party has been very organized and goal-driven; we must do so also if we don't want our worst fears to come to fruition. 

    Congressman Markey, we appreciate your invitation for us to meet with you and give you our input on this critical matter and to represent our constituents' needs.

    Additional information sources for this morning's article:
    Disclaimer:   I attended this meeting as part of my paid job with Tri-CAP and thus "reported" on it in this format.  My views do not necessarily reflect the views of Tri-CAP. 


    1. More info:
      On Tuesday, August 2, 2011, President Obama signed the Budget Control Act of 2011 (S 365). The bill passed the U.S. Senate by a vote of 74-26 and the U.S. House of Representatives by a vote of 269-161. According to the Congressional Budget Office (CBO), the agreement reached over the weekend between the White House and Congressional leaders would cut approximately $2.1 trillion from the federal deficit over the next decade. The agreement would raise the $14.3 trillion debt ceiling through 2012, immediately cut almost $1 trillion over the next 10 years (enforced by binding annual caps through 2021) and set up a 12-member joint congressional committee (made up of 3 Democrats and 3 Republicans from each chamber) to recommend by November 23, $1.2 to $1.5 trillion in further cuts (which could include raising revenues and cutting entitlements) and Congress must consider them by December 23. If Congress fails to pass a proposal that cuts the deficit by at least $1.2 trillion, automatic across the board cuts (sequestration) in spending would be implemented – half of which must come from “defense” (as traditionally defined). If the proposal cuts less than $1.2 trillion the difference would come from automatic across the board cuts in spending. Basic entitlement programs for low-income individuals and Social Security are exempted from the automatic across the board cuts (Medicare cuts are limited to 2% and are limited to the provider side). The plan also requires the House and Senate to consider a balanced budget amendment by the end of the year.
      For FY 2012, non-security discretionary (which provides funding to agencies such as CDC and HRSA) as defined under the law would be capped at $359 billion in FY 2012. This is $22 billion more than the House provided in the budget resolution it passed earlier this year and nearly level funding with this year’s FY 2011 appropriations bill for all relevant “non-security” discretionary spending. This increase in spending allocations for FY2012 could impact the ongoing appropriations process on Capitol Hill. The Labor-HHS-Education appropriations bill, which funds the Centers for Disease Control and Prevention (CDC) and the Health Resources and Services Administration (HRSA), will likely be considered after the August recess. It remains to be seen if this, and other appropriations bills, will receive higher allocations in light of the increased funding available for FY2012 in the Budget Control Act. APHA will continue to monitor the appropriations process closely.
      The new law could have additional serious implications for future discretionary health spending as the 10-year caps that are part of the first phase of this plan, do not exempt discretionary from potential future cuts that could be recommended by the new joint panel, or if the panel fails to act, or if it proposes savings of less than $1.2 trillion, when across the board cuts would kick in – including health discretionary spending. In addition, the joint panel could also recommend, and Congress could pass, additional cuts to “non-security” discretionary spending.

    2. Claire, your summary of this meeting is incredibly informative (and Steve, thanks for the additional details). I've been away while all the negotiations and finalizing of the Debt Ceiling were taking place and wanting to know the details and also the potential organizing/policy response to them. This really filled me in. I'm also glad to know that my Rep, Markey, is reaching out to people on these issues and listening!

      Roxanne R-W

    3. Steve, thanks for the additional info. I was hoping for comments like yours to add to what was really notes from a meeting in which I tried to capture without adding or editorializing.

      Roxanne, glad to hear from you too. I figured you must have been pretty busy lately.

      Anyone else who has info to add or some thoughts on how this will affect them, their clients, or their constituents, that's what the comments area is for!