Debt Ceiling Deal Reached by Obama Administration and Congress to be Voted On

After a long and unusually arduous process, Congressional leaders and President Obama reached a deal to avoid defaulting on the Nation’s debt.  This deal, which does not include any revenue increases in the first step, is slated to be voted on by the House today and the Senate shortly after.   It provides for a two-step process:The debt ceiling will be raised immediately and caps will be placed on discretionary programs.  This is expected to cut $1 trillion in spending from discretionary programs over a 10 year period (2012-2021). These cuts must be balanced between defense and non-defense spending (which could include important disability-related programs like housing, education, employment, and transportation).  Entitlement programs (Medicare, Medicaid, Social Security, and Supplemental Security Income (SSI)) are protected from cuts in the first step.  There is also an increase in spending for a few programs that Congress believes will lead to more savings, including new spending for the Social Security Administration to do more Continuing Disability Reviews and more spending on stopping fraud and abuse in entitlement programs.

2) Congress will cut an additional $1.2 to $1.5 trillion from the federal budget over 10 years.  This will be initiated by a twelve-member bipartisan Congressional “super committee” that proposes specific spending cuts by November 23rd.  The committee’s plan must get the support of at least 7 of its members to be voted on.  Congress will then hold an up or down vote, with no amendments allowed, on the spending cuts legislation by December 23rd.  Cuts to important disability-related entitlement and discretionary programs could be proposed by the committee and enacted by Congress.

If this committee fails to obtain agreement from at least 7 of its members to cut $1.2 trillion or if Congress fails to enact it, then automatic, across-the-board spending cuts will be triggered for 2013-2021.  However, any automatic, across-the-board cuts would exempt the low income entitlement programs, such as the Medicaid and SSI programs.  Small Medicare cuts are allowed but will fall on the providers.

The budget deal does not provide details about which programs will be cut or by how much. That work will be done over the upcoming months through the normal Appropriations Committee process and working with the new “super committee.”  It remains to be seen how disability-related programs will fare if Congress approves this deal.  Important discretionary programs such as education, housing, vocational rehabilitation, and transportation can be cut in the first phase. Deeper cuts can happen in the second phase, as well as cuts to entitlement programs. Congress is not required to raise revenues though they are not prohibited from doing so. Therefore, aggressive advocacy to protect the programs that are important to people with disabilities will need to continue through the end of the year. 

Read the budget deal legislation

The Arc will send more information and suggestions for August action later this week, once the results of the House and Senate votes are known.

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