Speaker John Boehner has another tea party fight looming. (Kevin Lamarque/Reuters)
The payroll tax cut extension isn't the only issue that has to be resolved by Congress by the end of February. The short-term deal Congress and the White House agreed to just before Christmas also included an unemployment insurance extension, and the perennial "temporary" adjustment of Medicare payments to doctors, the "doc fix." For background, "doc fix" is shorthand for the Sustainable Growth Formula, a payment formula devised in the 1997 budget law that was supposed to have set physician reimbursement rates based on a formula linking physician costs, Medicare enrollment and the GDP. It's never worked quite right, and beginning in 2002, created cuts that were too deep for physicians to accept. Congress has responded by tinkering, passing separate legislation to postpone, or cancel, or shrink the pay cuts, but they never been willing to repeal it. And every year, they fight over it.
This year's pay cut was slated to be a whopping 27 percent, obviously an unacceptable reduction any way you slice it. So it's a pretty critical component of what Congress is supposed to be working out (except, of course, they're on the vacation that Republicans refuse to acknowledge). At TPM, Sahil Kapur reports on the solution that Democrats, and even a Republican or two, have come up with to actually resolve the problem once and for all, but which the House GOP refuses to consider.
Over the last few months there’s been serious talk in Congress of buying out the “doc fix” issue once and for all with war savings from troop withdrawals in Iraq and Afghanistan, estimated at over half a trillion dollars.
The idea has been championed by Senate Majority Leader Harry Reid (D-NV), House Minority Leader Nancy Pelosi (D-CA), Senate Minority Whip Jon Kyl (R-AZ) and multiple other key senators including John Kerry (D-MA), Debbie Stabenow (D-MI) and Tom Harkin (D-IA).
But even though this plan could remove for free the $300-billion-and-growing albatross from the nation’s neck, it faces fierce resistance from House Republicans. In fact, some of the vocal opponents are doctors in the caucus, whom Leadership tends to give the first bite at the apple on health issues.
Why are the House Republicans so opposed to actually resolving this issue? They say it's because the war savings are real money, it's just an accounting trick. But since we all know that Republicans don't really care about the budget and deficits, that's not really the reason. What they really want is to exact cuts from other health care programs.
But look closer and you’ll see why House Republicans don’t want to give up this issue: doc fixes are typically funded with health spending cuts elsewhere in the budget, so the issue offers them a rare opportunity to go after Medicare and the Affordable Care Act, two programs they want to tell their 2012 constituents they helped contain.
As it happens, the House GOP’s two-year doc fix, along with its payroll tax cut and unemployment insurance extensions, were paid for by in part by charging upper-middle-class people more for Medicare and chopping the health care reform law’s exchange subsidy and prevention funds.
Democrats rejected those pay-fors, without proposing non-war savings alternatives, and so the doc fix fire has continued to grow. The House-Senate conference committee has until the end of February to hammer out longer-term extensions, and they’re expected to aim for a one-year fix, although GOP sources tell TPM they want at least a two-year patch. Expect Republicans to push the Medicare and health reform cuts again.
Medicare benefits cuts and crippling the Affordable Care Act before it even gets off the ground have to be unacceptable pay-fors for Democrats, particularly in an election year in which they want to make protecting Medicare a primary issue. With at least one Republican senator backing the "peace dividend" solution, it's the one Democrats need to keep offering. House Republicans are already fractured and weakening, and physicians are a powerful constituency Republicans can't afford to alienate further. This is another key issue in which Democrats have to keep pushing their advantage.