Health Affairs

Democratic proposals to cut Medicare spending are good policy, said New Hampshire Senator Judd Gregg, the senior Republican on the Senate Budget Committee, at a Health Affairs Media Breakfast this morning. The problem, according to Gregg, is that Democrats want to use the money saved to fund new benefits under health reform legislation, rather than using it to ameliorate the country’s worsening budget crunch.

“Much to the credit of the Senate Democrats, they proposed reducing Medicare expenditures by $500 billion in the first ten-year tranche, which is really only a six-year period. When you fully implement it over a real ten-year period, it’s $1 trillion. Over a 20-year period, it’s $3 trillion. That type of adjustment in Medicare spending, if it went toward stabilizing Medicare would be a major step toward moving our country to fiscal responsibility and toward stabilizing Medicare,” said Sen. Gregg.

“But unfortunately, what they’ve done with that money is taken it off the Medicare books … and moved it over to create new entitlements and expand already existing entitlements … So you’ve doubled down on the problem,” Gregg said. Cuts in Medicare, which is by far the biggest source of the federal government’s unfunded liabilities, are needed to address the coming fiscal “cardiac arrest.” If we use Medicare to fund health reform, “we’ll reach for the defibrillator to bring us out of this cardiac arrest, and there won’t be any power.” 

Gregg said he favored a statutorily created deficit-reduction commission, but the Senate voted down a proposal to create such an entity, and Gregg suggested that he would be willing to join the commission President Obama created by Executive Order instead. “If it’s the only game in town, maybe you have to join in,” he said. But Gregg said it would be inappropriate for him to explicitly say he would join the commission until the White House announces its membership.

Will Democrats succeed in passing health reform? Step one would be for the House to approve the Senate-passed version of the legislation, after which both Congressional chambers would enact modifications to that legislation through a “reconciliation” measure that could not be filibustered in the Senate, thus requiring only a simple 51-vote majority in the upper chamber. The more conventional route of melding the House- and Senate-passed bills together in a conference committee became impractical when Scott Brown won election in Massachusetts, giving Republicans the 41 votes needed to sustain a filibuster when the product of the conference committee came back to the Senate.

Gregg warned House Democrats that their Senate colleagues might prove unable or even unwilling to move all the agreed-upon modifications through the Senate using reconciliation. He said Republicans would subject a reconciliation bill to sentence-by-sentence scrutiny under the “Byrd rule,” named for Democratic Senator Robert Byrd (WV), which is designed to ensure that reconciliation is used only for legislation focusing on budgetary issues. Under this process, known as a “Byrd bath,” any sentence for which policy significance outweighs budgetary significance can be stricken from the bill through a Byrd rule point-of-order, which takes 60 votes to waive, Sen. Gregg argued.

Asked for examples of topics that might be stricken from a reconciliation bill under the Byrd rule, the New Hampshire Republican cited potential language tightening the current Senate language on abortion coverage and the proposal by President Obama for federal regulation of insurance premiums. “A very important point which my colleagues on the other side of the House should note is that yesterday, 41 Senate Republicans signed a letter that said they will not waive Byrd points of order … so it’s pretty obvious that anything that’s Byrdable will be knocked out,” Gregg said.

Sen. Gregg also argued that reconciliation rules would allow Republicans to propose amendments on any issues within the extraordinarily broad jurisdiction of the Senate committees on Finance and Health, Education, Labor, and Pensions. Republicans will force Democrats to cast a stream of politically tough votes on issues like guns, immigration, and abortion, he warned. “Now you ask yourself: If you are a Senator on the Democratic side of the aisle, do you really want to put yourself through this just to help out your Democratic friends in the House, when you’ve already got what you want, which is the Democratic Senate bill being passed signed by the President. I think that’s a reach, and it should cause questions for my Democratic colleagues in the House.”

To address these sorts of concerns, Democrats had discussed having the House pass the Senate health reform bill only after the Senate had passed the reconciliation-bill fixes. However, Gregg called that approach a nonstarter, because reconciliation bills have to amend existing law, meaning the Senate could only pass the reconciliation measure after the larger Senate health reform bill had been signed by the President. Sen. Gregg said he had discussed this matter with the Senate Parliamentarian Alan Frumin and was confident that Frumin would agree with his interpretation.

For more on Gregg’s remarks, see reports by Bloomberg/BusinessWeek, the Huffington Post, Modern Healthcare, USA Today, and the Wall Street Journal Blog Washington Wire.

This entry was posted on Thursday, March 11th, 2010 at 4:36 pm and is filed under All Categories, Health Reform, Medicare, Politics, Spending. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.