Erskine Bowles, a former Chief of Staff to President Bill Clinton, and Alan Simpson, a former Republican senator from Wyoming, are renewing their efforts to encourage Congress and the White House to work together to address the nation’s mounting debt through reforms to the tax code, entitlement spending, and increased fiscal discipline. They introduced a new framework for deficit reduction, entitled “A Bipartisan Path Forward to Securing America’s Future” earlier this week.
Bowles and Simpson were the co-chairs of the National Commission on Fiscal Responsibility and Reform that produced proposals in 2010 known as the Simpson-Bowles Plan. See NAHC Report August 8, 2012 for more on their initial proposals.
The new framework calls for $2.4 trillion in further reductions over the next ten years – with a quarter of the savings coming from overhauling federal healthcare programs and another quarter coming from tax reform. The remaining two quarters of savings would come from a combination of mandatory spending cuts, stronger discretionary caps, adopting the chained CPI for indexing in the federal budget, and lower interest payments.
In an op/ed that appeared in the February 14, 2013 edition of Politico, Mr. Simpson and Mr. Bowles outlined some proposals for addressing the rising costs of healthcare in their new framework:
“For health savings, we’ll have to look at everything from increasing premiums for well-off beneficiaries to reducing reimbursements to providers and drug companies to modernizing cost-sharing rules to tort reform. We will also need to reorient incentives to change the delivery of care and make adjustments to reflect the aging of society. In short, it will require taking on favored and well-entrenched constituencies across the health care system. Remember, health care is the largest single driver of our future debt…
If both sides move beyond their comfort zone on health and tax reform, those changes could be combined with the other spending cuts discussed in the negotiations last December [between President Obama and Speaker Boehner] to produce a package large enough to stabilize and begin to reduce our debt as a share of the economy.”
Simpson and Bowles released their new debt reduction framework at a time when the prospect of federal spending facing sequestration seems likely, and many of the recommendations of the original Simpson-Bowles commission are gaining momentum in Congress – including efforts by the Ranking Minority Member of the Senate Finance Committee proposing most of the commission’s recommendations for structural changes to Medicare and Medicaid.
Bowles and Simpson have indicated that a more detailed proposal based on their new framework will be released in the coming weeks. The House Ways and Means Committee plans to hold a hearing next week to review proposals to restructure Medicare, including those put forth by Simpson and Bowles.
While NAHC agrees that reforms to Medicare and Medicaid are needed, some of the proposals contained in both the original Simpson-Bowles report as well as the new framework – particularly suggestions to add additional copays or other out-of-pocket expenses and reducing reimbursement rates for providers as well as cutting federal payments to Medicaid– are ill-advised and would, in effect, increase Medicare and Medicaid spending rather than decrease it while also adding a significant barrier to home care and hospice services.
In light of the renewed push for entitlement reform and deficit reduction on Capitol Hill, all NAHC members are strongly encouraged to join the March on Washington, March 17 – 20, to protect access to home care and hospice services.
To view NAHC’s 2013 Legislative Priorities, in which proposed changes to Medicare and Medicaid are addressed, please click here.
To view the full Simpson-Bowles framework, please click here.