Hand and grinder with dollars

What they said on the doc fix … in 2009

In 2009, conservatives and Republicans were united in their demand that any repeal of Medicare’s SGR be fully offset… 

John Boehner (R-OH): Irresponsible ‘Doc Fix’ Proves Democrats “Cannot Help Themselves” (November 19, 2009)

”This irresponsible ‘doc fix’ proves once again that out-of-touch Washington Democrats simply cannot help themselves when it comes to piling debt on our kids and grandkids. Democrats continue to add tens of billions of dollars to the deficit while promising to eventually end their unprecedented spending binge.”

John Boehner (R-OH): Congressional Record (November 19, 2009)

That’s the real issue here, the fact that there is no pay-for here. There is no offsetting other types of spending. There are no increases in revenue somewhere to cover this. It’s just going to be dumped onto the backs of our kids and grandkids. The American people want us to relearn fiscal responsibility. My colleagues on my side of the aisle over the course of this year have stood up, I believe, for fiscal responsibility. And if we’re going to get our economy going again, we’d better get our fiscal house in order as well.

Joe Barton (R-TX): Congressional Record (November 19, 2009)

Mr. Speaker, the only fix that’s in this bill before us is “the fix is in.” …  It is a wave the magic wand, erase the accumulated deficit of the last 10 years or so in the SGR formula, and let’s kick the can on down the road.

Ed Whitfield (R-KY): Congressional Record (November 19, 2009)

As I have said, both parties have a lot of blame for the debt that we’re in, and the American people want us to be responsible. We have a $12 trillion debt today. Within 10 years, it’s supposed to be $23 trillion. At some point, we have to meet our obligation, meet our responsibility and try to pay for some of these programs. All of us support the purpose of this legislation, but there must be a way that we can do it and have it paid for. So for that reason, I would have great difficulty voting for this legislation without it being clearly paid for.

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Fast Facts: Medicare Doc Fix

The Medicare “Doc Fix”

Status: Congress periodically overrides a 1997 law that attempts to contain the cost of Medicare payments to doctors.  Congress prevents the cuts from going into effect with legislation, called the “doc fix.”  This year, Medicare payments to physicians will be reduced 21 percent if no doc fix passes by March 31st.

Background: When a physician treats a patient on Medicare, the government pays for the services he performs.  In 1997, Congress became concerned with the growing cost of these payments to physicians.  In response, lawmakers included in the Balanced Budget Act a restriction on growth in Medicare payments to doctors.  This cap is called the “Sustainable Growth Rate” (SGR).  The increase in payments could not be larger than the overall growth of the economy.

Since 2003, Congress has passed 17 bills stopping these payment cuts from going into effect.  If Medicare payments are cut too much, physicians may stop accepting Medicare patients.  This creates a major incentive for Congress not to allow the cuts to go into effect.  However imperfect, the SGR acts as a needed brake on exploding Medicare costs.  When it overrides the SGR, Congress normally offsets the cost with spending reductions in other areas.  The bipartisan Committee for a Responsible Federal Budget states that “since 2004, 98 percent of doc fixes have been paid for. And although these doc fixes have cost about $175 billion, the pay-fors have generated roughly $165 billion worth of savings.”

Bipartisan Irresponsibility:  According to Politico, the bill in the House being negotiated between John Boehner and Nancy Pelosi would include roughly $200 billion in increased entitlement spending, with only $70 billion offset with spending entitlement cuts elsewhere.  The bill would eliminate the SGR and replace it with a new payment system.  Another program, CHIP, is also reauthorized for two more years at “the elevated payment rates approved under Obamacare.”  CHIP provides health insurance for children and families with incomes above the poverty line.                                                                             

The deal would be only partially paid for with “structural” changes to Medicare spending.  The specifics of the plan are unclear.  However, reforms are likely to include a reduction in Medicare benefits for the wealthy (an approach known as “means-testing”) and a reform of Medicare supplemental insurance offerings (known as Medigap).  Both reforms are of uncertain size and impact.  What is known is that the up-front savings of the plan are minimal.  Historical patterns of Congressional policymaking suggest that a spending-now, cuts-later approach is ineffective at reducing spending.

House Republicans are trading the repeal of a massive leverage point with a long history of reducing government spending for limited structural reforms.  The extension of CHIP is a major priority of the Left, despite the fact that the program is largely irrelevant within the context of the current healthcare safety net, which currently includes Obamacare and an enhanced Medicaid program.

Long-Term Solutions: Reform is needed to ensure seniors have access to care as well as ensure that Medicare operates in a fiscally sustainable way.  The Heritage Foundation argues that “[a]ny permanent Medicare “doc fix” must be financed with permanent Medicare savings.”  The changes to the SGR must also balance in size and scope with structural changes to Medicare.  A large change to the SGR with only small changes to Medicare is fiscally irresponsible.

While the House proposal does contain reforms, the changes it suggests are hugely disproportionate to the changes it makes to the SGR.  The elimination of the SGR should be paired with major changes to Medicare.  After all, beyond the program’s 10-year costs, SGR actually has a long-term structural impact of $2.3 trillion. The proposal’s $200 billion price tag, bipartisan backing and the fact that the House plan’s savings only begin at the end of the 10-year budget window indicate strongly that its changes to Medicare are minor.

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What they’re saying on the doc fix: “Don’t increase the deficit”

Conservative and nonpartisan voices say Congress should fully offset the repeal of SGR…

Heritage Foundation’s Bob Moffit:

“Funding a fix is crucial. Last year, the Medicare actuaries estimated that the 75-year cost of an unfunded Medicare doc fix would add another to $2.3 trillion to the already enormous unfunded liabilities of the Medicare program.

“Now, the alarming news. According to Politico Pro, staff level negotiations in the House of Representatives are focused on paying for a relatively small portion of the doc fix, saddling taxpayers with tens of billions of dollars — in extra obligations. Worse, the report advises, the negotiators plan to rationalize not finding offsets by arguing that the SGR was just a “budgetary gimmick” anyway. Such a combination of cynicism and fiscal irresponsibility, if it came to pass, would be breathtaking.”

Committee for a Responsible Federal Budget:

“In total, now, lawmakers have offset 132 out of 135 months of doc fixes since 2004 with equivalent savings, or 98 percent of the time. Even disregarding the few times small gimmicks were used, policymakers still paid for these delays 94 percent of the time – with almost all of those savings coming from health care programs.

“Although the SGR clearly has not functioned as intended, it has served as an action forcing mechanism to prompt targeted health reforms in place of its prescribed blunt, across-the-board cuts.

Committee for a Responsible Federal Budget (2):

“Lawmakers should go further than the current discussions and pay for the entire package, not just a small portion.”

Washington Post Editorial:

“[S]uccumbing to [this deal] would set back the cause of long-term fiscal reform. To repeat, the sustainable growth rate has not quite worked as intended, but at least its failure never turned into a source of higher deficits. Instead, both parties should treat this as a chance to impose more structural changes, over and above the $37 billion worth contemplated. The Committee for a Responsible Federal Budget has identified $215 billion worth of medical program savings that could help pay for a long-term doc fix without altering eligibility or other fundamentals in either Medicare and Medicaid.

“For all the polarization and partisanship of a dysfunctional Congress, Republicans and Democrats have proven many times that they are still capable of agreeing to spend more on entitlements and pay for it through borrowing. They should miss this opportunity to prove that yet again.”

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Memo: Republican Budgets Should Achieve Additional Conservative Gains

To:                    Interested Parties
From:              Heritage Action for America
Date:                March 16, 2015
Subject:           Republican Budgets Should Achieve Additional Conservative Gains

In 2011, the new Republican-controlled House passed a bold budget that demonstrated the party was serious about confronting the policy challenges facing our nation.  With an obstinate and obstructionist Democrat Party in control of the Senate, House Republicans used subsequent budgets to lock in and consolidate their policy gains into a coherent platform.  Empowered by a historic House majority and control of the Senate, Republicans must do more than regurgitate previous policies.

Repealing Obamacare.  Republicans owe their majorities to their unwavering opposition to Obamacare, a reality that must be reflected in the budget.  A throwaway line that the budget “repeals Obamacare in its entirety” is not enough.  The claim must be backed up by words and deeds.

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Fast Facts: Reauthorizing No Child Left Behind (H.R. 5)

Reauthorizing No Child Left Behind: the Student Success Act (H.R. 5)

Status: The Student Success Act (H.R. 5) is a 620-page bill that would reauthorize No Child Left Behind. H.R. 5 was removed from consideration in the House of Representatives due to opposition from conservatives.  NCLB is the primary law that authorizes federal K-12 education programs.  It expired in 2007. Since then, Congress funded NCLB in spite of the fact that it is unauthorized.  H.R. 5 could be put back on the schedule at any time.  Below are the highlights from the Committee Report, frequently cited by the bill’s supporters on the House Committee on Education and the Workforce.

Testing Mandates: H.R. 5 maintains the central mandate of NCLB.  It requires states to develop a single, statewide academic assessment to evaluate the performance of local schools. Per an amendment added by Rep. Goodlatte, a local school district would be permitted to design its own assessment if the state approves of it. However, the local school district must still design its assessment in a way that reports data that are comparable among all local school districts within the state, reducing the likelihood that a school district would take up the option.

States must test all students each year in grades 3-8 and once again in high school—the same testing frequency in No Child Left Behind.  The Committee Report proudly states that “H.R. 5 maintains current requirements for states to develop and implement assessments in reading, mathematics, and science.”

H.R. 5 repeals the requirement that schools “make adequate yearly progress;” however, schools whose students don’t make enough progress are subject to “a school improvement system implemented by school districts that includes interventions in poor performing Title I schools.”

H.R. 5 continues the NCLB practice of forcing states to assess student progress primarily on improvements in reading and math test scores, a practice which in the eyes of many observers has led to the neglect of other important curriculum areas, such as civics and history.  High-stakes testing has led to “teaching to the test” from DC, a practice which privileges exhaustive test preparation over learning.

Current Levels of Spending: H.R. 5 maintains current levels of funding for NCLB.  While claiming to “eliminate” 69 programs, it largely consolidates them into one large new grant: the “local academic flexible grant.”  However, dozens of grant programs remain.  In fact, the local academic flexible grant comprises only 10% of the funding for NCLB.  Furthermore, the grant’s structure is the same as others in the bill, specifying the “application process, authorized activities, reporting requirements, and federal matching requirement…”  The grant requires detailed reporting, and assurances that the state will comply with federal mandates.

Evidence for the lack of genuine program eliminations comes from the lack of any real taxpayer savings.  Spending remains constant.  From the Committee Report: “The bill updates overall authorization levels for each of the fiscal years 2016-2021 to reflect the funding amounts provided by Congress for ESEA programs in FY 2015.”  In other words, the bill keeps funding at the same level that Congress provided last year.

Opt-Out Provisions: H.R. 5 lacks an opt-out provision for states, an approach known as A-PLUS, that would allow states to opt-out of the programs that fall under NCLB and allocate federal education dollars within broad parameters rather than in accordance with federal mandates.  Instead, the bill contains language that allows states not to participate in programs in exchange for losing the entirety of their federal funding (that taxpayers were already forced to send to Washington).  Because participation in federal education programs has always been “voluntary” (at the cost of losing billions in funding) these provisions don’t change anything about current law.

Common Core: The bill contains language prohibiting the Secretary of Education from forcing states to adopt Common Core, but opting out of Common Core must be done by individual states. H.R. 5 does not (and cannot) accomplish the rollback of Common Core, and according to the Heritage Foundation, prohibitions on the federal government getting involved in curriculum already exist in three federal laws—laws that have been ignored.

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