Health Center Federal Policy

Behind the Scenes: Gearing Up For Lame-Duck-Ageddon, Deficit Reduction, Sequestration

Although there isn’t much obvious activity in Congress right now, behind the scenes Members have started thinking about what’s shaping up to be an interesting fall:  full of discussions of deficit reduction and the must-pass legislation in the lame-duck session at the end of this year.  Among the myriad of issues that will require attention before the start of 2013 are the Medicare Sustainable Growth Rate (SGR) or “doc fix” (which does not apply to health center physicians, but to all who operate in the Medicare fee-for-service space), the expiring Bush-era tax cuts, the expiration of the payroll tax holiday, a possible omnibus appropriations bill, and any changes to the impending across-the-board sequestration agreed to in the Budget Control Act (BCA).  Not to be forgotten, Congress is also under pressure to increase the debt limit (again) at some point at the end of 2012 or beginning of 2013, before which Congress will have to take action or risk jeopardizing the nation’s credit rating.  The biggest challenge of the lame-duck-ageddon, aside from drafting legislation that can pass both chambers, is finding the vast sums of money required to offset all of these must-fix items (a permanent SGR fix alone is over $300 billion).  They come at enormous cost, with each fix requiring offsets that both parties can agree on so we’re keeping a watchful eye that the pay-for’s aren’t slated to come from programs like Medicaid, for example, that health centers depend on.

Deficit Reduction

Although the nation won’t reach our borrowing limit (the debt ceiling) until the end of this year or beginning of next year, leaders in both parties are beginning to position themselves to revisit deficit reduction negotiations this year.  House Speaker Boehner (OH) has made public statements that he will not accept an increase in the debt limit unless it makes cuts that are equivalent to any ceiling increase.  Senate Minority Leader Mitch McConnell has stated that now is the time to begin serious deficit reduction talks.  On the other side of the aisle, Chris Van Hollen (MD), the Ranking Democrat on the House Budget Committee has stated he does not agree with Mr. Boehner’s approach which focuses on spending reductions and indicates he prefers a “balanced” approach to resolving the debt ceiling crisis while Minority Leader Pelosi (CA) asserts that discussions will have to begin soon on what to do about the debt ceiling.  This is just one aspect of the debates we can expect this fall – during the lame-duck the Hill will be in a flurry of activity as Members scramble to resolve expiring provisions in Medicare, the tax code, and the all-encompassing sequestration. Both Congressman Van Hollen and House Budget Committee Chairman Paul Ryan recently indicated that they would not be surprised to many of the “must-do” items listed above kicked down the road until some months into the New Year via short term extensions and then considered in the context of a larger deficit reduction package in 2013.


We have already seen some activity in the House to remove sequestration and replace it with a series of alternative cuts through budget reconciliation, however it is unlikely the Senate will acquiesce to the House’s approach under the current party breakdown and they have not yet offered their own alternative.  We will have a watchful eye on all of these discussions this summer and into the fall, working hard to protect programs that are important to health centers and ensuring the safety net stays intact through the difficult battles ahead.