House of Representatives
Rules Committee, August 1, 2011
(a) SHORT TITLE.—This Act may be cited as the “Budget Control Act of 2011”
SEC. 302. ENFORCEMENT OF BUDGET GOAL
(8) IMPLEMENTING DIRECT SPENDING REDUCTIONS. — On the date specified in paragraph (4) during each applicable year, OMB shall prepare and the President shall order a sequestration, effective upon issuance, of nonexempt direct spending to achieve the direct spending reduction calculated pursuant to paragraphs (5) and (6). When implementing the sequestration of direct spending pursuant to this paragraph, OMB shall follow the procedures specified in section 6 of the Statutory Pay-As-You-Go Act of 2010, the exemptions specified in section 255, and the special rules specified in section 256, except that the percentage reduction for the Medicare programs specified in section 256(d) shall not be more than 2 percent for a fiscal year.
(9) ADJUSTMENT FOR MEDICARE. — If the percentage reduction for the Medicare programs would exceed 2 percent for a fiscal year in the absence of paragraph (8), OMB shall increase the reduction for all other discretionary appropriations and direct spending under paragraph (6) by a uniform percentage to a level sufficient to achieve the reduction required by paragraph (6) in the non-defense function.
By Don McCanne, MD
The deficit reduction agreement will likely result in an automatic two percent reduction in Medicare payments. The only way that can be prevented is by an agreement of a special twelve member bipartisan Joint Select Committee on Deficit Reduction to find alternative methods of reducing the deficit, and then to have their recommendations approved by an up-or-down vote of both current houses of Congress.
The probability of reaching a complex and controversial agreement that leaves Medicare totally unscathed is almost zero in this dysfunctional Congress. President Obama has already demonstrated that he is quite willing to capitulate to the demands of the right-wing obstructionists in Congress. This next time it will be much easier since the terms of the extortion have already been included in this legislation. Since Medicare remains a prime target for the reactionaries, it is very unlikely that it can clear this hurdle without further reductions.
Medicare payment rates have not been increasing at the same level as private insurance rates, understandably creating considerable uneasiness amongst the providers of health care. The Affordable Care Act will further reduce some Medicare payments, and now the Budget Control Act of 2011 will reduce them even further.
These trends will motivate the wealthy owners of Congress to seek private options such as Paul Ryan’s premium support (voucher) proposal, while diminishing their support of Medicare as an egalitarian system of social insurance. With reductions in funding and departure of the healthy and wealthy, Medicare would inevitably transition into a welfare program.
Happy Birthday Medicare! (Oh, that wasn’t nice.)