Deficit Committee Will Not Pass Reduction Plan

On November 21, the cochairs of the congressional Joint Select Committee on Deficit Reduction announced that they will not submit a plan to Congress for reducing federal spending by $1.2 to $1.5 trillion. This announcement triggers across-the-board cuts to many federal programs, excepting Medicaid. This action concludes the work of the so-called super committee created as part of the Federal Budget Control Act of 2011.

 

Cochairs of the Joint Select Committee on Deficit Reduction Senator Patty Murray (D-WA) and Representative Jeb Hensarling (R-TX) announced on November 21 that the joint committee (the “super committee”) will not submit a plan as charged to replace across-the-board cuts to the federal budget that are scheduled to take effect in 2013.

The committee’s failure to pass a plan triggers sequestration, or spending cuts to numerous federal and defense programs over a nine-year period, from 2013 to 2022. Currently, Medicaid is exempted from these across-the-board cuts; however, other nondefense areas such as education are not.

Congress has until January 2013 either to pass deficit reduction legislation of a different composition to meet the $1.2 trillion target or to attempt to revoke sequestration and avoid the automatic cuts entirely, an action that President Obama has stated he will veto. The final statement from the committee urges congressional action regarding reductions in deficit spending.

If you have any questions about the Federal Budget Act and its potential impact on school or administrative Medicaid programs, please contact the Policy and Research Division at policy@paradigm-healthcare.com.