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President’s Deficit Commission Acts on Proposed $400 Billion Cuts to Medicare and Medicaid

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Unable to secure the 14-member supermajority necessary to force congressional action on its plan, the President’s Deficit Commissioninstead scored a symbolic victory today when 11 of its 18 members agreed on a set of proposals aimed at reducing the federal deficit through tax reform measures and spending cuts.  HANYS alerted its members to all of the health care cuts therein and is weighing in against these reductions with the New York State Congressional Delegation. The proposals included nearly $400 billion in Medicare and Medicaid cuts, the largest of which was a $60 billion cut to Medicare Graduate Medical Education funding.

More than half of the Medicare and Medicaid cuts were directed at covering the cost of securing a permanent fix to the Medicare physician fee schedule formula. The Commission’s revised plan would cut mandatory and discretionary spending while reforming the tax code to reduce rates and broaden the tax base. In total, the proposals would reduce the federal deficit by nearly $4 trillion through 2020, to 2.3% of Gross Domestic Product by 2015.

Although they were not formally adopted, the Commission’s proposals are expected to gain traction within the Administration and on Capitol Hill as efforts to focus on deficit reduction heighten. The President will likely choose from among the Commission’s ideas to develop his budget proposals for federal fiscal year 2012, scheduled to be released in February. Congress will also likely pick from among the proposals to establish its budget resolutions for the next fiscal year.

HANYS is urging members of the New York State Congressional Delegation to reject any proposals to reduce Medicare and Medicaid funding to hospitals and health systems. New York’s hospitals and health systems are projected to absorb $15 billion in Medicare and Medicaid cuts under federal health care reform alone over the next ten years. Further reductions are untenable. Contact: Susan Van Meter

Published December 3, 2010