Health Care Overhaul & Deficit Reductions

Just one week after House Republicans unveiled their deficit-reduction plan, President Obama last week unveiled his own plan for cutting $4 trillion from the federal budget deficit. The two plans propose much different routes to deficit reduction, and among the differences likely to draw the most attention in the upcoming campaign season are how each would cut Medicare and Medicaid costs. The President’s framework would largely preserve Medicare and Medicaid in their existing forms while the Republican plan would essentially convert Medicare into a voucher program and Medicaid into a block grant program giving states a lot more latitude to make changes in benefits. President Obama says his more modest changes and other measures would save $290 billion in medical spending, though critics have charged it may not be possible to clamp down significantly on health care spending without broader changes.

Democrats in the Senate last week defeated legislation approved by the Republican-led House, in largely symbolic fashion, to bar spending government funds on the health-care overhaul law. The House had voted to deny funding for the Affordable Care Act (ACA), but the Senate rejected the measure 53-47 on a straight party-line vote. The votes in both chambers were held last week just days after an 11th hour budget agreement was reached preventing a government shutdown and continuing the financing of government operations through the end of the 2011 fiscal year. The separate budget measure cleared both chambers. The outcome of the de-funding vote was never in doubt, but Republicans pursued the effort as a nod to voters who overwhelmingly elected Republicans to Congress last fall and to force Democrats to be on the record as supporting ACA. The House in January passed a measure to repeal the health care reform law, but that measure failed to advance as well in the Senate. Also, the House on Friday approved, largely along party lines, a budget resolution that proposes $5.8 trillion in spending reductions over the next 10 years (relative to current law). This was the last major issue on the legislative agenda before Congress recessed for a two-week Easter/Passover break that is scheduled to run through May 1.

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