Health On The Hill: Democrats, Republicans Stake Out Positions On Debt Limit

Jackie Judd and KHN’s Mary Agnes Carey discuss what congressional leaders said – and what they meant – about Thursday’s budget discussions at the White House and how they might affect health care programs.

Listen to the audio or read the transcript:

JACKIE JUDD: Good day, this is Health on the Hill. I’m Jackie Judd.

The high-stakes talks between Congress and the White House about spending and the debt limit resume on Thursday. President Obama-who initiated this summit-asked Congressional leaders to leave their ultimatums at the door. As always, our focus is on how these talks may impact health care programs. And Mary Agnes Carey of Kaiser Health News joins us now to bring us up to date on that.

Mary Agnes, you have spent the day on Capitol Hill. Both sides have held news conferences about these upcoming discussions – what were they saying?

MARY AGNES CAREY: Basically, not a lot new from where they’ve been before. I think they’re trying to make the case that we can disagree without being disagreeable. Democrats are saying they really don’t want spending cuts unless they see some tax hikes. Republicans today did indicate they might look at some of these “loopholes,” as Democrats have talked about from the tax code – things like for corporate jets, or for yachts or race horses. They might look at closing those, but they want any revenue from that to off-set a tax increase, and Republicans remain firm that any tax hikes are going to hurt the economy.

JACKIE JUDD: And a Democratic leader, Congressman Steny Hoyer of Maryland, said that entitlements may indeed need to be on the table. What do you take from that?

MARY AGNES CAREY: Well, I try to follow up with lawmakers and ask them exactly what they’re talking about on entitlement cuts, especially Democrats. I get a lot of very vague answers, but it seems that Democrats are looking at, potentially, reductions in what Medicare pays to the providers – here we’re talking about maybe to the hospitals, or to the nursing homes, or the home health agencies – versus requiring beneficiaries to pay more. There’s also an examination of Medicaid: a discussion about something called a blended rate, which would look at what the federal government pays states for their Medicaid programs, for the Children’s Health Insurance Program, and also for these new beneficiaries for Medicaid that will qualify under changes in the health law. That’s not really popular with a lot of Democrats, but it’s still on the table. They may be looking at changing the way states can tax providers to raise Medicaid revenue. They’re trying to look at things across the board, but then again, Democrats are adamant they do want to see tax increases before they agree to some of these reductions.

JACKIE JUDD: And some of the reductions that you’ve just described – would they be sufficient to help get to the magic number that the negotiators are trying to reach before August 2?

MARY AGNES CAREY: As you can imagine, in all these discussions, the dials can be turned up and be turned down. So if, for example, Republicans agree to more than, perhaps, some anticipate in a tax increase, you could dial back a Medicare reduction or dial back a Medicaid reduction. And the other thing to keep in mind here is: Any package that’s agreed to at the White House has to pass muster both in the Senate and the House, and you could have significant push-back by Democrats that may not want to touch Medicare or Medicaid or not do so siginificantly. So it’s one of those things where you kind of have to see how it all pans out.

JACKIE JUDD: And August 2 is the deadline for the debt limit to be raised if it is going to before the United States could not pay its bills. But that’s not the drop-dead deadline for any kind of large package, as you suggested. Of course, what’s agreed to at the White House needs to be passed by both chambers of Congress. So what is the timeline that we’re looking at?

MARY AGNES CAREY: The president said yesterday he wants to get a deal by July 22, to allow the markets to be reassured that the government will not default on its bills and to give both chambers time to consider it and work through it. Eric Cantor today in the House — the House majority leader — said, you know, we don’t have to wait until July 22, Mr. President, let’s cut the deal tomorrow. So if folks were willing and could reach compromise, that could happen. But as we know in Washington, these things tend to go on. So we could get very close to August 2 before we have a deal, perhaps, on a shorter-range package or a longer-range package.

JACKIE JUDD: President Obama said yesterday, Tuesday, that he opposed this notion of a short-term deal. He said it would just be kicking the can down the road. Has there been more discussion of that notion today on Capitol Hill?

MARY AGNES CAREY: Eric Cantor, again, the House majority leader, actually said today: That’s one area where I agree with the president. I don’t think we should have a short-term extension. We should have this longer-range package. Don’t kick the can down the road. Take care of it in one bite of the apple. But Steny Hoyer, the House minority whip — a Democrat — talked about: You know if we have to do this two or three times in two or three steps, then that’s what we’ll do. For him, the bottom line was that the United States cannot default on its debts. It has to make good on what it said it’s going to pay its creditors. There’s varying opinions and I think that these will continue. A lot will depend on signals the market sends to Capitol Hill. Are they comfortable? Is the market comfortable with a short-term increase? And also, lawmakers may not want to take this vote in 2012, especially as you get close to an election. So a lot will depend here on the Hill, and also, I think, on Wall Street.

JACKIE JUDD: Mary Agnes Carey of Kaiser Health News, thank you so much.



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