Posted 11/18/11 on Managed Care Matters
The chances that the Congressional Super-Committee will achieve its stated goal of cutting $1.5 trillion from federal expenditures over the next decade are fading fast.
What happens when the six Republicans and six Democrats can’t agree on cuts?
Big – really big – increases in costs for health plans and workers comp payers. I’ll get to that in a minute, but first let’s walk thru what happens if the Supers can’t agree.
Theoretically automatic, almost-across-the-board cuts in military, entitlement program, and ongoing operational budgets go into effect 1/1/2013.
Don’t bet on it.
The threat of across-the-board cuts was supposed to motivate/force the Supers to hammer out their differences and get to a solution. All reports indicate that isn’t going to happen, as the Republicans refuse to contemplate any form of tax increases and Democrats, who believe they’ve given enough on the entitlement side, refuse to go further unless the GOP budges on taxes.
The looming threat of across the board cuts has become a good deal less likely to happen as politicians on both sides acknowledge that the threat is just that – a threat – and not much more. As with any bill passed by Congress, the threat can be overturned when/if Congress passes another bill overturning the original law.
That’s probably what the GOP members are banking on. If they are able to maintain control of the House, take over the majority in the Senate, and win the Presidency in next fall’s elections (a distinct possibility), Republicans will be able to do what they wish. I’d expect immediate action to rescind cuts in military spending, extend the Bush tax cuts for top earners, and slash entitlement spending.