Health Center Federal Policy, Uncategorized

Negotiators Close in on Debt Deadline, Deficit Deal Still Not Reached

In the last few weeks we’ve seen deficit talks ramp up, break down, and then watched negotiators get down to details again – all in the name of a deal that both parties and the Administration can agree on to reduce the federal deficit and raise the debt ceiling.  Negotiations have been tense at times and the landscape of a deal is ever-changing, but as we close in on the U.S. Treasury’s predicted debt ceiling drop-dead date of August 2nd, the principles are working hard to create a package that deals with the deficit and the debt that everyone can support.  With only two full weeks to go before the debt ceiling must be raised and Moody’s and Standard and Poor’s indicating possible re-evaluations of the U.S.’ bond rating, here’s a sense of where the lead negotiators are right now:

The White House

President Obama continues to state publicly that he is optimistic about a deal being reached and that all of the pieces are on the table to get to an agreement – whether that is a $4 trillion package as he prefers or a smaller $2 trillion package that he would also accept.  President Obama has been deal-brokering for several weeks now and he  hosted talks daily last week.  The President presented three options to Congressional leaders at the end of this week:  a far-reaching $4 trillion deal, reportedly including taxes and cuts to entitlement programs such as Medicaid; a $2 trillion package requiring each side to give a little; and a mini-package with no revenue measures and no entitlement cuts that would rely on cuts to discretionary appropriations, and that would have comparatively limited impact on resolving the nation’s financial problems.  The President gave Congress a window to respond to his proposal and is actively seeking feedback and alternate ideas from Representatives and Senators, urging them to move quickly.

The Senate

Senators Reid and McConnell continue to participate in negotiations, with the two leaders now bringing focus back to the upper chamber by also negotiating separately from the House on an alternate path to raise the debt ceiling.  This past week, Minority Leader McConnell floated a “last-choice option” that would allow the President to raise the federal debt limit without guaranteed spending cuts through a series of votes to take place through 2012.  Under this proposal, the President could raise the debt limit without Congressional approval—so long as Congress does not vote it down.  Majority Leader Reid has indicated some interest in the McConnell proposal and the two leaders may use this moment as a jumping off point to lay out a plan which could include establishing a joint committee to draft enforceable deficit reduction measures and some amount in spending cuts.  Additionally, this weekend Senator Coburn, former participant in Gang of Six negotiations, previewed a plan he’s been working on which could cut $9 trillion in federal spending across many programs including defense and entitlement spending.   If a broader bicameral solution does not emerge soon, the Senate may have the momentum to rally support around its own proposal, whatever shape that takes.

The House

House Republicans in general reacted skeptically to Senator McConnell’s proposal, indicating it could not pass the House. In addition, the majority in the lower chamber has taken a firm stance against including any revenue measures in a final deal and some House lawmakers have indicated they do not believe the August 2nd date is a real deadline for action.  Speaker Boehner and Leader Cantor continue to participate in bipartisan talks with the White House.  House Democrats have indicated some openness to the McConnell plan, while also indicating their first choice is for a “big deal” that would likely include revenue measures along with spending reductions, which is a sticking point in the negotiations.  In the midst of the deal-making, the House plans this week to take up the recently introduced “Cut, Cap and Balance Act” to cut and cap spending and require Congress pass a Balanced Budget Amendment (which they also plan to vote on separately next week).

Negotiations are getting hairy, but the talks continue.  Here at NACHC, we’ve made sure that the White House, and Senate and House leadership understand the importance of the Health Center program and the unique and successful relationship between Community Health Centers and Medicaid.