Aug 5, 2011 | Vol. XVI No. 12 |
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The Dust Settles on the Debt Ceiling Debate...
...But Little is Settled
On Tuesday, President Obama signed into law the Budget Control Act of 2011 to raise the debt ceiling and reduce the federal deficit after weeks of Congressional wrangling and a final agreement that combines initial budget cuts with a longer-term plan for more significant deficit reduction. Here is a synopsis:
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What Happens First
The deal raises the debt ceiling high enough to pay U.S. obligations through 2012. It establishes discretionary spending caps that cut $1 trillion over ten years, targeting both security (e.g., defense, homeland security, military construction/veterans affairs, etc.) and non-security programs. FY12 and FY13 budget authority will be reduced modestly by $7 billion and $3 billion, respectively, but the cuts become more dramatic over time. |
What Happens Next
A Joint Committee of six Republican and six Democratic members of Congress (half each from the House and Senate) will be established within two weeks to develop legislation to reduce the deficit by at least $1.2 trillion more over ten years. Proposals can include changes to revenue and entitlements, although these issues are very contentious. The package must be approved by a majority of the committee by Nov. 23 and be adopted by of Congress by the end of the year. If a package is not passed, then automatic spending cuts totaling $1.2 trillion over ten years would occur (called a sequester) starting in January 2013, half from security and half from non-security programs. Social Security, Medicaid, Food Stamps and other low-income programs are exempt from the automatic cuts, but health center funding and the health center trust fund established under the Affordable Care Act are not exempt. |
Analysis
Much depends on the 12 members of the Joint Committee, who will have the opportunity to make vast changes to all manner of revenue options (e.g., repealing the tax cuts for the most wealthy), fundamental alterations to entitlement programs (e.g., block grant Medicaid, privatize Social Security and/or Medicare), and funding levels for discretionary programs (e.g., further cuts to health centers, public housing, etc.). While the protections to entitlement programs under the sequester (the back-up plan pending lack of agreement) offer some relief from a worst-case scenario, there is very little non-defense, discretionary funding left in the budget to cut; hence the immediate threat to health centers, housing programs, and all manner of non-Medicaid/Social Security programs that serve to prevent poverty and homelessness. Unfortunately, the rancor demonstrated over the past year will likely only get worse as the 2012 Presidential election nears. More details here from the Center on Budget and Policy Priorities |
TAKE ACTION
Members of Congress will be on recess in their home district/state for the next month. Use this opportunity to invite them to your project, meet with them in their local office, and attend any town hall meetings they hold. You can find local contact and event information at the member's website (find your members at www.house.gov and www.sentate.gov).
We do not know what will happen going forward but our message remains simple:
- Further cuts to human services (like health centers) are unacceptable.
- Cuts to entitlements (like Medicaid) are unacceptable.
- The cuts promised through the sequester would be devastating to HCH projects and patients.
- The only responsible way to reduce the deficit is to include increased revenues and reductions in defense spending.
Communicating with your members is important even if they are not appointed to the Joint Committee because they will be expressing their priorities to their leadership and the Committee members once they are appointed. Your input is vital, especially to balance the well-financed pressure coming from interest groups looking to protect military spending and the interests of the wealthy. Stay tuned for more information as the process develops. |
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Dan Rabbitt, Health Policy Organizer
National Health Care for the Homeless Council
drabbitt@nhchc.org | 443-703-1337 | www.nhchc.org
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HEALTH CARE AND HOUSING ARE HUMAN RIGHTS
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