It's going to be the battle of the lobbyists when the Super Congress convenes to figure out how to sink American's economic recovery even more deeply, and legislators weigh out where they get a better deal.
The several paths to further deficit reduction mean the political conversation could very well revolve around the topics of entitlement and tax reform for the next year and a half—sucking the oxygen away from other issues. Some lawmakers may end up passing on the super committee's recommendations, believing they can get a better deal down in the next year. That could mean the main forces affected by the potential trigger—the defense lobby and health care industry—will have extra time to engage in a lobbying campaign to ensure that their priorities aren't threatened.
As it stands now, the debt-ceiling deal tasks a bipartisan committee with finding an additional $1.5 trillion in deficit reductions. The committee can do this by looking at both entitlement reform and raising revenue and will have until Nov. 23 to finish its deliberations. If a majority of the 12 committee members vote for a package of recommendations, that package will be sent to both chambers of Congress for passage. No one will be allowed to amend the suggestions offered, nor will a filibuster be permitted. A vote will be held no later than Dec. 23.
The health care industry is gearing up for the fight, and the result could very well be that it's not just provider-side cuts in health programs, but benefits cuts.
"The story isn't over," said Joe Baker, president of the Medicare Rights Center, a New York-based advocacy group. "The future of the programs really hangs in the balance. It could lead to deep cuts and irreversible changes to Medicare and Medicaid that shift costs to beneficiaries."
The hospital industry, which agreed to cuts of $150 billion to help pay for Obama's expansion of coverage to the uninsured, said Monday it's just about had it.
"America's hospitals find it difficult to support a debt ceiling proposal that could negatively affect Medicare for our nation's seniors," American Hospital Association president Rich Umbdenstock said in a statement. "Access to care could be curtailed by further cuts to Medicare funding for hospital care." [...]
"These guys haven't really solved anything — they have only set up a procedure to make cuts," said Robert Laszewski, a health care industry consultant. "We haven't seen the blood on the floor yet."
The White House is emphasizing that Medicaid for the poor and benefits guaranteed to seniors under traditional Medicare would not be touched if automatic reductions become necessary as a backstop.
But the new congressional "supercommittee" created under the deal is under no such restrictions. It can shape its own menu of cuts to Medicare, Medicaid and Obama's health care law, assuming the panel could get the votes to pass a package through Congress and buy-in from the White House.
"Nothing is off limits," said Paul Van de Water, a senior analyst with the Center on Budget and Policy Priorities, which advocates for the poor. "These debates are just going to continue."
What's still out there is the new funding formula for Medicaid the White House proposed in these budget negotiations that could sharply reduce federal contributions to the program. That's in addition to the provider cuts for Medicare already in the works, but also increases in out-of-pocket expenses for beneficiaries, included higher copays and deductibles, as recommended by the Catfood Commission.
Medical providers are nervous, but Medicare and Medicaid patients should be more so. Let's just look at the hierarchy of lobbying efforts that will be at work. The defense industry will reign supreme. Republican Senators Lindsey Graham and Jon Kyl have had absolute hissy fits over defense cuts, and that's just the beginning, before the defense lobby even really has had a chance to gear up. Real defense cuts coming out of the Super Congress is a bad bet.
So they'll turn to health care cuts. There's only so far providers will be willing to bend, and only so far Congress would be willing to go to piss them off. So who ends up bearing the brunt of cuts? You got it. The beneficiaries. That's trickle down for you.