Saturday, June 12, 2010

Weekend Update on Fiscal Responsibility and the “Doc Fix”

By now many of you will have heard about the President’s weekly radio address, in which he criticized Republicans for supposedly blocking a vote on passing a short-term Medicare “doc fix,” and pledged to find a “fiscally responsible” way to address the physician payment formula in the longer term.  Unfortunately, when it comes to the Medicare payment issue, the President’s rhetoric does not match the reality:

Democrats Removed the “Doc Fix” from the Health Care Bill, Creating the Current Problem:  Section 3101 of the original Reid health care bill (H.R. 3590) provided for a one-year Medicare “doc fix,” which would have prevented the sustainable growth rate (SGR) cuts from taking effect at any point during 2010.  However, Majority Leader Reid struck this provision in a manager’s amendment written behind closed doors, because the majority, rather than spending $11.3 billion to ensure seniors had access to physician care this year, wanted instead to spend yet more money on unsustainable new entitlements.

Democrats Have Not Offered a “Fiscally Responsible” Plan for the “Doc Fix”:  In his nearly 18 months in office, neither the President nor Democrats in Congress have advanced ANY type of fiscally responsible, long-term solution for Medicare physician payments the President now claims to want.  The Administration’s budget this year proposed $371 billion in new deficit spending over the next ten years – essentially making the problem go away by busting the budget.  While that proposal’s ten-year impact would be bad, the long-term impact would be even worse – an analysis by former Medicare trustee Tom Saving found that Democrats’ plans to pass a permanent “doc fix” increasing the deficit would raise Medicare’s unfunded obligations by up to $1.9 trillion over the next 75 years.

Democrats Cannot Agree Amongst Themselves on Deficit Spending and the “Doc Fix”:  The President’s budget proposal to “solve” the SGR problem through more deficit spending was effectively rejected by a bipartisan majority in the Senate last October.  At that time, 13 Democrats voted with all 40 Republicans against the consideration of a bill (S. 1776) that would have frozen physician payments for 10 years at a cost of $247 billion.  And consideration of the current “doc fix” legislation (H.R. 4213) has taken more than a month, as Blue Dog Democrats in the House and moderate Democrats in the Senate continue to bicker with their more liberal colleagues about whether or not new spending for Medicare physician payments and other so-called “emergency” spending should be offset.

Republicans Supported a Fiscally Responsible, Long-Term Solution to the “Doc Fix”:  While Democrats attempted to ignore Medicare’s funding woes during the health care debate to focus instead on creating new entitlements, Republicans offered amendments to address the physician payment issue.  Specifically, Senator Gregg offered an amendment requiring that Medicare savings be directed towards protecting and strengthening the Medicare program—through changes such as a permanent “doc fix.”  Had this amendment been adopted, the $528.9 billion in Medicare savings in the health laws would have been more than enough to pay for a permanent, fiscally sustainable “doc fix.”  Unfortunately, in both December 2009 and March 2010, Senate Democrats rejected this fiscally responsible approach to health care reform.

Republicans Have Offered Fiscally Responsible, Short-Term Solutions to the “Doc Fix”:  In recent months, Republicans have offered numerous proposals to pay for short-term extensions of Medicare physician payments and other expiring provisions, to allow Congress time to debate these issues without adding to skyrocketing budget deficits.  On March 2, Republicans offered a paid-for, one-month extension of the “doc fix” and other provisions that would have reduced the deficit by more than $13 billion; Democrats rejected this proposal.  On March 25, Republicans offered another one-month extension of the “doc fix” and other provisions, which Democrats again rejected.  And Senator Thune’s substitute to the pending legislation would provide a LONGER extension of the “doc fix” than the Democrat bill, while simultaneously reducing the deficit by $55 billion.  If President Obama is interested in fiscal responsibility, he should endorse the Thune Republican substitute and its “doc fix” provisions.

Amidst the President’s rhetoric this weekend, it’s also worth pointing out once again the mailings and other taxpayer-funded propaganda efforts the Administration has recently been using to sell its unpopular health care legislation.  Despite the rhetoric of the Medicare leaflet saying that the health law “will keep Medicare strong and solvent,” in reality the legislation ignored many of Medicare’s chronic long-term funding problems (such as the “doc fix”) to focus instead on creating unsustainable new entitlements.  And of course, the $18 million the Administration claims it spent to send out those leaflets promoting its health care law is money that WON’T be used to ensure Medicare beneficiaries have access to physician care.

As Democrats are discovering, taxpayer-funded leaflets and rhetoric regarding fiscal responsibility won’t change the reality of skyrocketing federal budget deficits and an unpopular and unsustainable health care law.  The true alternative lies in Republican proposals that would control federal deficits and put spending on a more responsible, sustainable path.