The Senate "Gang of Six" negotiators have proposed reducing federal spending by eliminating a long term care program created by the Patient Protection and Affordable Care Act (PPACA) and by slashing Medicare and Social Security spending.
The senators– Kent Conrad, D-North Dakota; Dick Durbin, D-Illinois; Mark Warner, D-Virginia; Saxby Chambliss, R-Georgia; Mike Crapo, R-Idaho; and Tom Coburn, R-Oklahoma–said when they unveiled the proposal Tuesday that it could cut projected federal spending by $3.7 trillion over 10 years
The senators are calling for stabilizing U.S. publicly held debt by 2014, and for reducing publicly held debt to about 70% of gross domestic product (GDP).
Sen. Jeff Sessions, R-Ala., the highest ranking Republican on the Senate Budget Committee, has said he can find only $1.2 trillion in cuts in the proposal
Some have suggested that the proposal could provide political cover for senators who want to vote to raise the statutory debt ceiling.
If Congress does not raise the debt ceiling, the United States could begin defaulting on obligations as soon as Aug. 2, Obama administration officials say.
At press time, copies of the proposal and the executive summary did not appear to be available on congressional websites or other government sites.
A copy of the executive summary posted by the Kaiser Health Network outlines a two-step legislative process. The first would be an immediate $500 billion spending cut. The second would be passage of a comprehensive deficit reduction bill that would restructure the tax code and federal spending programs.
The proposal calls for efforts to change Social Security to move on a separate track.
The proposal also would establish an elaborate procedure for considering proposal-related measures on the Senate floor.
One specific recommendation calls for eliminating the Community Living Assistance Services and Supports Act (CLASS Act) long term care program. The CLASS Act is supposed to create a voluntary, worker-funded LTC program. Critics have argued that the program would be actuarially unsound and eventually would have to charge higher and higher rates as healthier workers began to avoid it.
The proposal would encourage Congress to reform or replace the Medicare Sustainable Growth Rate formula and offset the cost with savings on other health care expenditures. A parenthetical note in the proposal seems to suggest that drafters believe that move could save $298 billion over 10 years.
The drafters say the government also should seek $202 billion in additional health savings while maintaining the essential health care services on which the poor and elderly depend.
