WASHINGTON — Democrats considering a maneuver to forgo bipartisan support to pass Covid-19 relief are confronting an unintended consequence: doing so could automatically cut Medicare.
Many Democrats want to pass President Joe Biden’s $1.9 trillion Covid relief proposal, which includes $1,400 stimulus checks and aid to local governments. A group of GOP senators is pushing for a smaller plan that would provide $1,000 checks.
So Democratic leaders are making preparations to use a process known as budget reconciliation, which would allow them to pass Biden’s proposal without getting 60 votes in the Senate, a threshold that would requires at least 10 Republicans.
But under the Pay-As-You-Go Act of 2010 (PAYGO), new laws that raise the national debt automatically trigger offsetting cuts to some safety net programs.
Feb. 1, 202100:52
Those cuts can only be avoided, budget experts say, with 60 Senate votes — leaving Democrats back where they started since it’s unclear if Republicans would vote to prevent the cuts after opposing a partisan relief package.
“It’s Medicare, it’s farm subsidies,” said Marc Goldwein, a budget expert at the nonpartisan Committee For a Responsible Federal Budget. “It’s a bunch of programs that would be cut.”
The size of the Medicare and other social safety net program reductions would depend on the size of the package, but they’d be significant even if the price tag falls under $1 trillion. Social Security and low-income programs would be exempt.
“The cuts would be huge,” said Paul Van de Water, a senior fellow at the Center on Budget and Policy Priorities. “It’s a critical issue which, at some point, is going to have to be dealt with.”
Incoming Senate Budget Chairman Bernie Sanders, I-Vt., who will shepherd the reconciliation process and has been a supporter of expanding safety net programs, will work to prevent the cuts, his spokesman Keane Bhatt told NBC News.
He pointed to the last time budget reconciliation was used to make a big change — when Republicans passed a costly tax cut on a partisan vote, which triggered $25 billion in Medicare cuts. But Democrats joined with Republicans to prevent those cuts from taking effect in a government funding measure that was subsequently passed.
“Trump and his Republican colleagues used deficit spending to pass $2 trillion in tax breaks overwhelmingly benefiting the wealthiest and large corporations, and expanding a military budget with a Pentagon that has never been independently audited,” Bhatt said. “When it comes to feeding children who are hungry or treating people who are sick in the middle of a pandemic, funding cuts due to supposed concerns over the deficit would be unacceptable and immoral.”
There may be other ways to stop the cuts, but they’d be difficult in practice, Van de Water said.
Congress could declare the relief bill an emergency, which would exempt it from PAYGO — but adding such a provision would likely take 60 votes. Lawmakers could try to use a future reconciliation bill to shut off the automatic cuts, but that would create a cascading effect of essentially borrowing from the future.
Congress would have until the end of 2021 to prevent the cuts, and could do so in any bill under the regular process, said Bill Dauster, a former policy aide to Senate Democratic Leader Harry Reid.
“All of God’s children should want to avoid a sequester in Medicare and other entitlements,” he said. “There are reasonable incentives to want to avoid it again this year.”
House Speaker Nancy Pelosi, D-Calif., and Senate Majority Leader Chuck Schumer, D-N.Y., introduced a budget measure on Monday that lays the groundwork for using reconciliation and said that doesn’t preclude a bipartisan package.
“The only thing we cannot accept is a package that is too small or too narrow to pull our country out of this emergency,” Schumer said. “We cannot repeat the mistake of 2009.”
Goldwein said forcing Congress to worry about the debt was the purpose of the 2010 law.
“It’s supposed to be an obstacle,” he said. “The point of statutory PAYGO is to encourage policymakers to pay for things so they don’t make the debt worse.”
Source: | This article originally belongs to Nbcnews.com
