KHN's Mary Agnes Carey and Politico Pro's David Nather talk with Jackie Judd about Congress' return to Washington to work on proposals to lower the deficit. How to, and if, Medicare and Medicaid are reformed in the process are part of the mix of policy and politics lawmakers are considering in reducing the deficit.
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JACKIE JUDD: Good day. This is Health on the Hill, I’m Jackie Judd. Congress returns to work today from a two week recess and the nation’s economic health is front and center. Mary Agnes Carey, senior correspondent for Kaiser Health News, and David Nather, Health Policy Reporter for Politico Pro, are here to discuss what’s ahead. There are a lot of moving parts here. Mary Agnes, let’s start with the Biden Deficit Commission and the Gang of Six. Who are they and what are they supposed to be doing?
MARY AGNES CAREY: The Gang of Six is a group of three Republicans and three Democrats. They have been meeting for months in the Senate to try to find an agreement, a bipartisan agreement, on how to reduce the deficit. Several members of the Gang of Six were part of President Obama’s Deficit Commission. The thought is they are working off that roadmap that the Commission put out.
The head of the Gang of Six, Kent Conrad, the Senate Budget Committee Chairman, has talked about that they are extremely close. These folks have been meeting for months. They have been talking to each other over the recess. The thought is that they could come out with some sort of budget blueprint as early as this week.
JACKIE JUDD: And none of these conversations can take place, of course, without some discussion of what to do with the big health care programs, Medicare and Medicaid. Do we have any sense yet of what direction those kinds of talks will be heading in?
MARY AGNES CAREY: Well, it’s unclear. If you go back and look at the deficit reduction panel that they were previously on, they talked about could you limit the growth in Medicare spending? Could you have a premium support model - again Paul Ryan in the House, the House Republican, has put out a premium support model that is under a lot of fire - but could there be another way to do that? They could look at those areas or other areas of Medicare spending and try to find some compromise.
And you talked about another panel that is kicking in, that is the Vice President’s panel. Vice President Biden is going to convene that panel this week. It has got members from the House and members from the Senate. They are supposed to come out with a plan by June; we will see how that fairs. But as we know the Gang of Six has been meeting for a longer period of time and could move forward a little bit earlier.
JACKIE JUDD: The Wall Street Journal reported today, there is a long story on the Gang of Six, and in it, it was written, the Gang of Six is likely to shape the national debate, whatever they come up with. Is it really the preeminent group in this, David, and how do all these moving parts intersect?
DAVID NATHER: Well, it’s going to be a high profile group, just for the fact that it’s a half and half group of Senators, most with some prominent reputations. But remember, if they come out with something, they can help to shape the debate, but you already have these two high profile deficit plans on the table right now, Paul Ryan’s and President Obama’s, and these are the official ones, that is not even counting the deficit commission one. Now, if the Biden Commission comes in and does its own thing as well, that becomes potentially one more idea to add to the mix.
What you have to remember, though, is these are such potentially huge changes to Medicare and Medicaid, the big entitlement programs, that it makes you wonder how much they can accomplish right now, or would want to accomplish with a presidential election coming up. You know, there are certainly smaller things they can do that can kind of get them on the path to reducing spending in those entitlement programs, but are the conditions really there for a full-fledged agreement on both of those programs? That is really unclear right now.
JACKIE JUDD: What is your answer to that? Is the time right for a full-fledged big debate that concludes in some kind of action? What is the mood on the Hill?
MARY AGNES CAREY: The big move for legislative on the Hill, the legislative moves, the biggest things tend to happen in the off election years. To David’s point, we do have a presidential election next year. We do have members of congress and both parties are fighting for control.
So, to your point: why cut a deal? Why would any Republican want to give the President or Democrats a victory in carving out a deficit reduction deal now? But that said, we have read all these comments. We have heard members of both parties talking about their concerns - not only theirs but their constituents - about the deficit, about the debt. And they also know how congress works, that to get this kind of consensus, you need to get it now.
We are pretty far out from that 2012 election. That is the only - I believe it was Judd Gregg who said this in one of the stories today, a former Senator, former Budget Committee chair - that this is the time now to reach this deal. So, it is a very complicated mix of policy and politics and maneuvering and where will they end up? There is a possibility of it happening, but the politics really make it tough.
JACKIE JUDD: But are there any hard and fast deadlines by which Congress must do something?
DAVID NATHER: Well, if they are going to do something that gets attached to the debt limit increase, it has to happen sometime between May and July. May is when they really start considering. July is about the end point where treasury secretary Geithner has said —
JACKIE JUDD: He is out of accounting tricks!
DAVID NATHER: That’s it, can’t juggle the money anymore. So, whatever they are going to do, if it is part of the debt limit increase, has to be then. Now again, is it going to full-fledged or is it going to be sort of a down payment toward longer term talks to really restructure Medicare and Medicaid? Or is it something sort of general, like let’s put in, perhaps, an overall spending cap by which time. This is kind of the way the Deficit Commission that Simpson and Bowles did. If you put that kind of legislation —
JACKIE JUDD: So legislating for future lawmakers?
DAVID NATHER: Yeah, in other words, we will try to put this limit in place and we will hope that we can live below it. If we go above it, then it is time for Congress to consider the kinds of things that we can’t agree on. There are ways to do that. Something like that could be seen as a down payment, you put that on the debt limit increase, that might make some people satisfied that at least Congress is starting to talk about it. But the absolute best conditions for this kind of controversial action, it usually happens in the year right after a big presidential election.
JACKIE JUDD: And speaking of members of Congress beginning to talk about it, some of them, the leaders, the bipartisan group, are supposed to be at the White House tonight, Monday night, for a dinner with the President. Originally, of course, this was, I think, intended to be initial discussions about the budget, about spending, about deficit reduction. How much of it might be taken over by the events of the past 24 hours - President Obama, of course, announcing that Osama Bin Laden had been killed.
MARY AGNES CAREY: Certainly, I am sure there will be a lot of conversation about that. It is a pivotal moment for everyone in America, for the President and for Congress, but I think they will soon return to much of this discussion about the debt and the deficit. As David noted, that raising the debt ceiling, that is a real pressure point, and so to get Congress to agree to something by July, here we are at the beginning of May, it is really turning up the heat.
JACKIE JUDD: Not a lot of time left.
MARY AGNES CAREY: Absolutely not.
JACKIE JUDD: Okay, thank you both so much, David Nather of Politico Pro, and Mary Agnes Carey of Kaiser Health News, thank you.