Congress Has History of Reversing Cuts
From The Wall Street Journal:
In 1997, Congress passed a budget law that mandated tough curbs on Medicare spending, setting up formulas to reduce doctor payments if broad spending targets were exceeded. But when the formula began taking a serious bite out of doctor reimbursements in 2002, Congress acted to reverse the cuts -- a step it has repeated five times since then.
That history shows why some critics believe billions of dollars in budget savings Congress is promising through its health-care overhaul might never materialize.
Under both Democrats and Republicans, Congress repeatedly has waived curbs it has tried to place on spending. It has given back other savings from the 1997 law to hospitals, skilled nursing facilities and other providers, most notably in 1999. More recently, Congress has twice switched off a cost-saving trigger that was contained in a 2003 bill establishing a Medicare prescription-drug benefit. Congress also frequently has waived budget resolution limits, as well as pay-as-you-go rules requiring offsets for tax cuts and entitlement spending.
The House bill passed last weekend trims government spending in several areas by more than $400 billion, through a combination of cuts falling largely on pharmaceutical makers, private health insurance companies and hospitals.
"Congress is notorious for passing Medicare savings, and then after the cuts take place and the political groups get activated, we restore all the money," said Rep. Paul Ryan (R., Wis.). "The [new] cuts will never take place. ...In the next few years, they'll all be given back" with some exceptions.
Last month the Senate tried to debate a measure that would permanently change the 1997 cost-cutting formula, at a cost of $250 billion over a decade. But the move to open debate failed after getting support from only 47 senators. The odds of passing a permanent fix to the formula now appear dim, because lawmakers can't find a politically palatable way of offsetting the cost with tax increases or other spending cuts. Instead, they're likely to pass another short-term fix that might further add to the deficit.
In 1997, Congress passed a budget law that mandated tough curbs on Medicare spending, setting up formulas to reduce doctor payments if broad spending targets were exceeded. But when the formula began taking a serious bite out of doctor reimbursements in 2002, Congress acted to reverse the cuts -- a step it has repeated five times since then.
That history shows why some critics believe billions of dollars in budget savings Congress is promising through its health-care overhaul might never materialize.
Under both Democrats and Republicans, Congress repeatedly has waived curbs it has tried to place on spending. It has given back other savings from the 1997 law to hospitals, skilled nursing facilities and other providers, most notably in 1999. More recently, Congress has twice switched off a cost-saving trigger that was contained in a 2003 bill establishing a Medicare prescription-drug benefit. Congress also frequently has waived budget resolution limits, as well as pay-as-you-go rules requiring offsets for tax cuts and entitlement spending.
The House bill passed last weekend trims government spending in several areas by more than $400 billion, through a combination of cuts falling largely on pharmaceutical makers, private health insurance companies and hospitals.
"Congress is notorious for passing Medicare savings, and then after the cuts take place and the political groups get activated, we restore all the money," said Rep. Paul Ryan (R., Wis.). "The [new] cuts will never take place. ...In the next few years, they'll all be given back" with some exceptions.
Last month the Senate tried to debate a measure that would permanently change the 1997 cost-cutting formula, at a cost of $250 billion over a decade. But the move to open debate failed after getting support from only 47 senators. The odds of passing a permanent fix to the formula now appear dim, because lawmakers can't find a politically palatable way of offsetting the cost with tax increases or other spending cuts. Instead, they're likely to pass another short-term fix that might further add to the deficit.
posted by Sid Cottingham | 9:24 AM
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