Archive for Friday, August 19, 2011

Some groups may want debt gridlock

August 19, 2011


— Gridlock, as much as it’s derided, may be the best outcome for the elderly, health care providers and poor people in this fall’s fight over further deficit cuts.

A new congressional supercommittee, split evenly between Democrats and Republicans, has until Thanksgiving to propose a gargantuan $1.5 trillion in budget savings over 10 years. Every federal program and tax is a potential bull’s-eye for the panel.

If it doesn’t produce such a package, or Congress doesn’t pass its plan by Christmas, up to $1.2 trillion in spending cuts would be automatically unleashed on hundreds of programs. It’s meant to be a scary prospect, but it doesn’t threaten everyone.

Some programs have been exempted from the automatic cuts: Social Security, the Medicaid health program for the poor, Medicare health benefits for the elderly, veterans’ pensions and many programs for people with low incomes.

Now lobbyists are calculating whether programs they fight for would fare better under an unpredictable package from the supercommittee or in the round of automatic cuts that would be triggered if its mission fails.

“That’s a question a lot of people are asking,” said David Certner, legislative policy director for AARP, the country’s largest senior citizens’ organization.

The uncertainty is one of the new wrinkles for lobbyists and their clients in the deal that resolved this summer’s debt ceiling battle between President Barack Obama and Congress. The two sides ended up agreeing to extend the government’s borrowing authority and start trimming its ever-growing $14 trillion pile of I.O.U.’s.

Lobbyists also must gauge how to get their voices heard above the din as virtually every interest group in Washington tries influencing the supercommittee’s dozen members. They have only a brief time to make their case. Buffeting the effort is a wide variety of forces: a limp economy, ping-ponging financial markets and building pressure to ease unemployment. In addition, the start of 2012 presidential and congressional election campaigns will encourage the two parties to highlight their differences.

“It’s daunting to think about how you make a difference in this new environment in this very compressed amount of time,” said Bob Bendick, chief lobbyist for The Nature Conservancy, a conservation group.

Military and civil servants’ pay, child nutrition, public housing rental assistance and some transportation aid are among the other programs protected from the automatic cuts. But many interest groups have some programs exempted from the automatic cuts and others that are not, leaving them uncertain whether they might fare better from a bill the supercommittee could produce.

“It’s sort of like that old show, ‘Let’s Make a Deal,’” said Joel Packer, executive director of the Committee for Education Funding, which represents over 80 education groups. “Door No. 2 we know is really bad. Door No. 1, when I open it, am I going to get shot?”

Nursing homes and assisted living facilities illustrate the unpredictable budget-cutting terrain ahead.

Their trade group, the American Health Care Association, says over 60 percent of its members’ revenues — $45 billion last year — came from Medicaid, which would be fully exempted from automatic cuts if the supercommittee fails to agree on a savings plan. But the trade group says its members would be hurt by another aspect of the automatic slashes — a 2 percent cut in Medicare payments to nursing homes and other health care providers.

For an industry that claims harm from other recent reductions in Medicare and state Medicaid spending, that Medicare cut would cost each nursing home an average $50,000 a year, the equivalent of two direct-care workers, the association says. It wants the supercommittee to ease that burden, and it already has nursing home officials contacting local members of Congress.

“It is possible that whatever comes out of the 12-person committee would be worse than in the sequester,” said former Kansas Gov. Mark Parkinson, president and CEO of the nursing home group, using the technical term for the automatic cuts. “But we’re certainly going to work hard to make sure that isn’t the case.”

The American Hospital Association has similar concerns. Rick Pollack, the group’s executive vice president, says hospitals on average get nearly half their income from Medicare and Medicaid combined.

The hospital association wants the supercommittee to look at curbing Medicare benefits, such as by gradually raising the program’s eligibility age, rather than focus strictly on cutting reimbursements to providers.


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