House Republicans will take their first concrete steps today to avoid automatic spending cuts (known as a “sequester”) and begin a debate on ways to reduce spending on mandatory programs such as Medicaid and food stamps. The House Budget Committee will begin marking up two related bills, one of which would stop most of the $109 billion in across-the-board spending cuts that are scheduled to take effect in January under the Budget Control Act. The second is a “budget reconciliation” measure that would cut $300 billion over 10 years to substitute for the spending cuts. These combined measures include a number of provisions that would affect people with disabilities:
- Repeal of the “maintenance of effort” requirements on states for Medicaid and the Children’s Health Insurance Program. The legislation would allow states to apply more restrictive eligibility standards for programs. The draft bill also would reduce the federal Medicaid match rate for U.S. territories from 55 percent to 50 percent, as well as cut the health care provider tax from the current 6 percent threshold to no greater than 5.5 percent.
- Repeal of the Social Services Block Grant (SSBG). The $1.7 billion SSBG enables each state to provide social services that include special services to persons with disabilities. One of the SSBG’s five goals is preventing or reducing inappropriate institutional care by providing for home and community-based services.
- Increase repayment charges for people who receive health insurance subsidies. People with low incomes who received the subsidies would be affected if their incomes increase later in the year because they found a job, received a promotion, got married, or other reason.
- Elimination of the Prevention and Public Health Fund. The Affordable Care Act (ACA) established this fund to expand investments in prevention and public health, to improve health outcomes, and to enhance health care quality.
- Revisions to the medical liability system by capping non-economic damages to $250,000, limiting attorneys’ fees, and other changes.
Democrats intend to offer an alternative plan for replacing the spending cuts that they say will be more balanced. According to press reports, Budget Committee Democrats may propose eliminating tax breaks that benefit some companies in an effort to increase tax revenue instead of finding additional spending cuts.
The House floor vote is currently scheduled for May 10th. However, the reconciliation process is not likely to proceed beyond the House of Representatives. A budget resolution, with reconciliation instructions, is unlikely to pass the Senate. However, the existence of a concrete plan to replace the automatic cuts could give House leaders leverage in discussions that will likely occur later this year about how to stop the automatic cuts.