Deficit Committee Begins Meetings Today

by Rebecca Farley on September 8, 2011

The Joint Select Committee on Deficit Reduction today began its work of identifying at least $1.2 trillion in federal spending reductions. The committee is working on a tight timeline, with a Nov. 23 deadline for reaching agreement.

With the committee’s task spanning the entire range of federal spending and revenue, all healthcare programs are potentially at risk for cuts. Medicaid and Medicare in particular may be prime targets because they account for a large share of federal spending. Several proposals that have been put forth this year to reduce Medicaid spending would have devastating effects on the behavioral health safety net, including converting Medicaid to a block grant, creating “blended” federal match rates for each state, and repealing health reform’s Maintenance of Effort requirements.

The National Council this week signed on to a letter by the Partnership for Medicaid that encourages the Committee members to reject “arbitrary, across-the-board” Medicaid reductions and instead urges them to consider the Partnership’s proposed policy changes that would improve care quality and produce savings while also protecting beneficiaries’ access to care.

The Partnership letter also thanks President Obama and congressional leaders for exempting Medicaid and the Children’s Health Insurance Program from the automatic cuts that will occur should the Joint Select Committee fail to reach agreement on a spending reduction plan. Reaching an agreement will be a difficult task, given the ideological diversity on the Committee and the need for any plan they craft to be approved by both chambers of Congress – currently controlled by different parties with dramatically differing views on acceptable levels of spending cuts and revenue increases.

If Congress does not enact a spending reduction plan, across-the-board cuts will be imposed on all federal spending, with half the cuts to fall on security spending, and half to fall on non-security spending. However, several programs of critical importance to behavioral health are exempted from these cuts, including Medicaid, CHIP, and SSI. For more details on the automatic cuts and the Medicaid exemption, see this article from the Center on Budget and Policy Priorities.


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