An Empty Claim to Fiscal Responsibility
The House is expected tomorrow to take up a $210 billion proposal to scrap the flawed formula that dictates Medicare doctor payments, thereby averting a 21-percent pay cut slated for next year.
If the proposal sounds familiar, it’s because the Senate considered a nearly identical bill just a month ago. That legislation was shot down, not because lawmakers oppose the underlying concept (nearly everyone on Capitol Hill agrees that Medicare’s physician payment formula doesn’t work), but because Democratic leaders didn’t offset the substantial costs with revenue increases or federal spending cuts. That is, the new spending would have been piled onto the country’s already considerable debt.
Fast forward a month and you might think that House Democrats would take a lesson from the failed Senate bill by offering to cover the costs. But you’d be wrong; the bill is unfunded.
Here’s House Majority Leader Steny Hoyer (D-Md.) tying himself in rhetorical knots yesterday as he tried to explain to reporters why the Democrats aren’t even trying to pay for their proposal.
In our budget we contemplated that the [cost] … would not be paid for. That doesn’t mean it doesn’t have to be paid for – clearly it does. We need to address the fiscal issues confronting us. On the other hand, [the doc fix] has been passed on a regular basis not being paid for.
Here’s what he was talking about. Earlier in the year, House leaders passed pay-as-you-go budget rules, but exempted four big-ticket (and enormously expensive) items that are deemed must-pass bills. The doc-fix was among them.
As a part of the pay-go exemptions, though, the Democrats said one of three things had to happen. Either statutory pay-go has to be law (it isn’t, because the Senate hasn’t passed it); the doc-fix proposal has to be paid for (it’s not); or statutory pay-go has to be attached to the bill as a rider (the House doc-fix bill does this, with the intention that the Senate would pass the requirement that everything other than those four items be paid for through the rest of the fiscal year).
We think it is critical to combine this with a fiscally responsible policy of providing for all but the four specific items we exempted. All other items of spending on entitlements or reductions in revenues would be covered by statutory pay-go. … We think that fiscal discipline is critically important.
This, of course, is a cop out. That is, Congress created Medicare’s flawed pay formula, but no leader of either party seems to want the responsibility of finding ways to pay to fix it.
Also unmentioned here is the political strategy behind tomorrow’s House vote. For years, the American Medical Association, the nation’s largest doctor lobby, has pushed lawmakers to eliminate the doc-payment formula, which is indexed to GDP growth rather than to faster-rising medical inflation. AMA has announced its intention to support the Democrats’ health reforms this year, but they haven’t said they’d do so without the doc-fix accompanying the larger (and very separate) bill.
The House is expected to pass its doc-fix bill tomorrow. But there’s no good reason to think that that the budget hawks in the Senate would have had a change a heart about its cost over the past month. The question is, will the mere effort to pass the bill be enough to win the AMA’s support for the larger reforms? Some are already saying no.