Obama Wants To Avert Cuts to Medicare, Other Programs in Sequester

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On Tuesday, President Obama demanded that Congress move quickly to avert the across-the-board spending cuts -- including a 2% reduction to Medicare reimbursements -- in the sequester, The Hill's "On The Money" reports (Parnes/Wasson, "On The Money," The Hill, 2/5).

The mandated spending cuts under sequestration involve about $1 trillion in across-the-board reductions. In January, President Obama signed legislation -- negotiated by Vice President Biden and Senate Minority Leader Mitch McConnell (R-Ky.) -- that delayed the cuts by two months to March 1.

Obama's Comments

According to "On The Money," Obama did not offer a specific plan on how to avoid the cuts in the sequester ("On The Money," The Hill, 2/5). According to the New York Times, more details could come during Obama's State of the Union address next week (Shear/Calmes, New York Times, 2/5).

Obama did say that any proposal should include a "balanced mix of spending cuts and more tax reform" and that Congress should "at least" pass a package that delays the sequester for a "few months," which he said would give lawmakers more time to develop a full deficit-reduction package ("On The Money," The Hill, 2/5).

Obama also indicated a willingness to accept reductions to entitlement programs, noting that in the past he has "offered sensible reforms to Medicare and other entitlements" (Zigmond, Modern Healthcare, 2/5). He said that proposals he made to reduce entitlement spending during talks on the fiscal cliff in December 2012 still are "on the table." During those negotiations, Obama agreed to change how costs would be adjusted for inflation in government programs, including Medicare, in exchange for revenue increases from closing tax loopholes ("On The Money," The Hill, 2/5).

Observers noted that Obama's willingness to address entitlement spending might be a bargaining chip to get Republicans to agree to revenue increases (Modern Healthcare, 2/5).

Reactions

Republican lawmakers immediately rejected Obama's plan. McConnell called Obama's proposed closing of tax loopholes "gimmicky tax hikes" (New York Times, 2/5).

Sens. Kelly Ayotte (R-N.H.), Lindsey Graham (R-S.C.) and John McCain (R-Ariz.) in a statement said they will introduce legislation to replace the sequester cuts that will be based on recommendations from the Simpson-Bowles commission.

Meanwhile, Senate Democrats will discuss possible sequester replacements during their retreat this week, according to "On The Money" ("On The Money," The Hill, 2/5).

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