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'Doc fix' done, but Congress still faces tough tasks of cutting debt, entitlements from now bare-boned budget

 

 

“Stick a fork in it. It’s finally done,” exclaimed House Energy and Commerce Committee Chairman Rep. Fred Upton, R-Mich., in a news release.
Congress this week finally put to bed one of the most vexing issues to confound lawmakers in recent years: the dreaded “doc fix.”
The doc fix is a formula the government uses to pay physicians who treat patients on Medicare. The federal government reimburses doctors for accepting seniors on Medicare. People on Medicare pay less than they would otherwise for medical services. The government makes up the difference and pays the doctors. But even after that plan, there was a chasm due to inflation. Congress kept approving Band-Aid’s to fill the gap. Expensive ones, too.
The latest stopgap was about to expire. If Congress didn’t act soon, physicians would face a 21 percent cut in their payments from Washington when caring for those who use Medicare.
If doctors weren’t getting paid, they weren’t going to treat Medicare patients. That could have created a major public health issue.
Health care is expensive. That’s why a fight over ObamaCare lingers to this day. But the role of government in diminishing the cost of health care (through programs such as Medicare and Medicaid) and the national debt crystallized in the debate over the doc fix. It epitomized why Washington struggles to get a grasp on spending.
It’s no surprise that it took a bipartisan deal negotiated at the very top to finish off the doc fix once and for all. House Speaker John Boehner, R-Ohio, and House Minority Leader Nancy Pelosi, D-Calif., developed a new system to pay doctors and abandon the antiquated pay schedule that was nothing more than a patch.
The House OK’d the new plan in late March, 392-37. The Senate followed late Wednesday night, 92-8.
One would think that if both houses of Congress adopted the new plan with such robust, bipartisan, super-majorities, there wouldn’t be a problem, right?
Hardly.
Some conservative lawmakers abhorred the new plan and voted nay. The total price tag of the doc fix was more than $200 billion. Only about $60 to $70 billion was offset, which triggered $140 billion of extra deficit spending.
That’s the conundrum that eluded lawmakers for so long on the doc fix. Nobody wants to add such a prodigious chunk of change to deficit spending -- especially fiscal conservatives. But it’s political suicide to cut off seniors from their doctors, too.
Rep. Michael Burgess, R-Texas, a physician by trade who’s worked on the doc fix for years, argued that repeated patches were more expensive than the bipartisan compromise -- which was still not cheap.
“What’s the cost of doing nothing? A billion dollars more than what we’re doing today” Burgess said. “If you don’t fix this formula, you almost can’t move on. This is the first step in that process. Perfect? No. A good step? Yes.”
Conservative groups lambasted the plan as “budget gimmickry” and “fake” spending cuts. They asserted that what doctors are due over the next decade when they treat Medicare patients is about $30 billion above what the Congressional Budget Office anticipates. Some of that’s because they believe the fee schedule for various medical treatments is unrealistic and the costs will multiply.
Naturally, Sen. Ted Cruz, R-Texas, and other conservatives balked at the $200 billion price tag.
The deadline for approving a new doc fix was really April 1. The House finished up well before then. But the Senate was wrestling with adopting a budget. Senators debated and voted well into the wee hours of the morning of March 27 before leaving for a two-week break for Passover and Easter once completing the budget. There was some speculation the Senate may try to handle the doc fix just before dawn that morning. But leaders knew conservatives had major reservations about such a gambit. They didn’t want to face criticism that they “rammed through” such a controversial plan in the dark of night.
After all, Senate Majority Leader Mitch McConnell, R-Ky., promised an open, thoughtful amendment process when he seized the helm. Pushing through the doc fix at that hour would have diminished that commitment.
So the doc fix sat. And sat. And sat. Right up until the night of April 15. Everyone on Capitol Hill knew that payment reductions to doctors started on April 16th. That’s when the government began writing checks to physicians. If Congress hadn’t acted by then, the government would cut smaller checks.
There was talk about amending the plan in the Senate and shipping it back to the House.
“We all knew the Perils of Pauline that the raft was going over the waterfall,” protested an exasperated Burgess about his Senate colleagues.
Washington Democratic Rep. Jim McDermott, a psychiatrist who also toiled on the doc fix, upbraided conservatives who didn’t like the new proposal.
“The Republicans keep wanting people to believe you can have things without paying for them,” McDermott said. “If they want to pull the medical profession and the public through the rat hole, that’s their privilege.”
Cruz and others pushed to have all of the costs offset. That failed. In an effort to court the votes of skeptics, Senate Majority Whip John Cornyn, R-Texas, authored an amendment to offset the unpaid portion of the new doc fix plan. Cornyn would make up the difference by using money saved by eliminating the ObamaCare mandate that requires everyone to purchase health coverage. That effort plummeted on the floor, too.
On Wednesday night, the Senate lugged the bill to passage in what proved to be a rare bipartisan moment.
“I want to thank Leader Pelosi for her indispensable leadership,” said Boehner on Thursday morning at a Capitol Hill ceremony to send the legislation to the White House.
“When the American people choose divided government, they’re not saying they don't want anything done,” McConnell said.
While lawmakers managed to extinguish the flames of one lone, smoldering blaze -- even while heaping on some additional deficit spending, they all knew this was nothing compared to the other challenges Congress faces with the books.
“We have a lot more work to do to fix these entitlement programs,” Boehner offered.
And when does Congress intend to start fixing entitlement programs like Medicare, Medicaid and Social Security, the largest drivers of the debt? Well, there hasn’t been a really big effort on this front since the altercation over raising the debt ceiling in 2011. Those negotiations failed. Congress then empaneled what was called the “supercommittee,” a bipartisan, bicameral group of lawmakers to engineer major cuts. The supercommittee failed, too.
In fiscal 2013, the federal government spent a grand total of $3.4 trillion for all programs. Just over $2 trillion of that went toward entitlement programs such as Medicare, Medicaid and Social Security -- and some service on the national debt. Entitlement programs are the biggest drivers of federal spending and the national debt. So what is Congress left to do? There are basically three options:
Lawmakers could raise taxes. That is a non-starter in a Republican-controlled Congress.
Lawmakers could cut benefits. That is a non-starter in almost any Congress. Seniors who receive those entitlement programs vote. Atop the Capitol in Washington, construction workers are refurbishing the Dome. If Congress slashed entitlement programs, members of the public would likely storm the Capitol, doing so much damage that they’d have to start the Dome project all over again.
Lawmakers could cover the cost of entitlement programs by cutting spending elsewhere. The idea sounds good. But a set of mandatory spending cuts, known as sequestration (set in motion automatically by the failure of the supercommittee) has already nicked federal spending down to the bone. There’s not a lot of other fat out there to cut. And besides, entitlement spending outpaces all other spending 2:1. So there’s not even a way to make up the difference because the non-entitlement spending pot is half the size of the entitlement pot.
This is why it’s a near-impossible task for Congress to reduce overall federal spending and harness the national debt. Conservatives came to Washington with the promise to reduce federal spending. Well, they can, and have -- on everything but the items that explode the debt the most.
The challenge to solve the doc fix was a microcosm of a riddle. How do lawmakers cut yet maintain benefits? It’s almost an expression in a Zen-like koan – the enigmatic realization of two phenomena that are opposite one another. Like being tense but flexible. Controlled but free. Exerting effortless effort. A sour sweetness. A bankrupt wealth. Things that don’t align – except in the world of Zen and Taoism.
This is the quandary facing Congress when it comes to spending. And it may take a Zen-like effort to figure it all out.

Oklahoma Legislature, like Congress, takes aim at taxpayer-funded wind energy credits

Just outside the small farming community of Tuttle, Okla., the 262-foot-tall wind turbines that dot the horizon are welcome additions -- providing millions of dollars in additional income to farmers and landowners.
The roughly 188 wind turbines erected since 2010 have generated more than $22 million in leases and royalties to them and others across the state, according to a recent study by the Economic Impact Group.
The farmers argue the money helps cover lost income during tough harvest years.
But the local wind-power industry, like those in many other states, is facing challenges from Republican lawmakers and others those who question whether the tax exemptions and credits and other subsidies for so-called “green energy” projects are worth the taxpayer investment.
Roughly 30 bills relating to the Oklahoma wind industry have been filed in the state legislature in the 2015 session, including at least one targeting the tax breaks and others attempting to alter regulatory policies.
Rep. Earl Sears, a Republican and chairman of the House Budget Committee, thinks industry reform is needed.
“We have to take a look at all of these credits we are handing out,” he recently said. “They’re costing the state $36 million to $40 million per year. And we’re glad that most think that reform in the industry is necessary.”
Another bill attempts to eliminate a rarely used new-investment tax credit. And Sears has authored a bill that would require wind facilities to demonstrate further financial security.
Wind energy is coming under fire in other states as well.
An offshore wind project in New Jersey, planned by Fishermen’s Energy, has been running into regulatory obstacles for nearly five years.
In Nantucket, Mass., a $2.5 billion project to build 130 wind turbines failed when backing at the local level waned.
Taxpayer support for wind energy is also losing momentum in Congress.
Capitol Hill lawmakers at the end of last year did not extend the Federal Production Tax Credit (PTC).
And in March, Sen. Heidi Heitkamp, D-N.D., failed to rally support behind an amendment that would have put a five-year extension on the PTC.
The Senate rejected the amendment by a vote of 51-47, falling primarily along party lines.
Republicans Sens. Susan Collins, Maine; Chuck Grassley, Iowa; and Mark Kirk, Ill., voted in favor of the extension, while West Virginia’s Joe Manchin was the lone Democratic senator to vote against the amendment.
An Oregon wind facility in southeastern Wasco and southern Sherman counties was one of the first projects to be put on hold after the non-renewal of the PTC, and industry experts say more projects are likely to follow suit.
“We need a balanced approach that protects the taxpayer’s interests but also encourages growth and industry,” Oklahoma state Rep. Leslie Osborn said recently.
The Republican lawmaker thinks pulling support for wind projects will negatively impact too many people, particularly those living in rural areas.
“In those tough years, the wind can certainly be a blessing,” she said. “The wind is a natural resource, and it’s one that we should develop while we’re here on earth.”

O'Malley, Sanders, Webb outline potential path over Clinton to win 2016 Democratic White House nomination

Three potential candidates considered among the most likely to challenge Hillary Clinton’s juggernaut campaign to become the Democratic Party’s 2016 nominee for president expressed confidence Sunday about defeating her, each outlining potential paths to victory.
Sen. Bernie Sanders, Independent-Vermont, questioned whether Clinton or any 2016 GOP presidential candidate would challenge Wall Street for the middle class.
“I do have doubts that Hillary Clinton or any Republican out there will take on big-money interests who control so much of our economy,” he told “Fox News Sunday.” “CEOs should not be making 300 times more than their workers. … What we are seeing over the last 40 years is the disappearance of America’s middle class.”
Sanders, the longest-serving member of Congress, suggested higher taxes for the wealthy and cutting the “enormous waste” at the Pentagon.
 Sanders said he would decide “pretty soon” about whether he could raise enough money to mount a “credible campaign.”
“I wouldn’t run unless I thought I could win,” he told Fox News.
Former Virginia Democratic Sen. Jim Webb also challenged Clinton, a former first lady and secretary of state, saying voters want new leadership.
"I think we've got a lot of incumbent fatigue in the country,” he said on CNN’s “State of the Union.” “People are looking for fresh approaches in terms of how to solve the problems of the country."
Like Sanders, Web highlighted the huge financial backing likely needed to defeat Clinton, considering backers expect to raise $2.5 billion for her campaign.
"But what we do have is long experience on the issues, in and out of government; strong beliefs about where the country needs to go," said Webb, a populist-style politician, Vietnam veteran and Navy secretary under the Bush administration.
Webb, who recently visited the first-in-the-nation caucus state Iowa and who will return in the coming days, said only that he was “looking … hard” at officially declaring a candidacy.
Right now, Clinton is running uncontested for the party nomination. However, Democratic National Committee Chairwoman Debbie Wasserman Schultz said recently that she’s planning for a series of sanctioned primary debates.
“I expect the voters who believe we should have a Democratic primary will get their wish,” she told C-SPAN.
Also on Sunday, former Maryland Democratic Gov. Martin O’Malley, considered perhaps the mostly likely to challenge Clinton, continued to argue that his two terms running the state would qualified him to run the country, if he gets into the race.
And like Sanders, he suggested that improving the economy, particularly middle class wages, would be a top priority.
“I believe I have the ideas that will help our country move forward to where our economy is working again, instead of our wages declining,” O’Malley said on CBS’ “Face the Nation.”
Clinton made a similar argument when officially announcing her candidacy April 11 via an online video in which she says: "Americans have fought their way back from tough economic times, but the deck is still stacked in favor of those at the top.”
O’Malley, a longtime Clinton supporter, argues he can defeat her but has yet to directly challenge Clinton or her campaign or platform.
“I will let others second-guess her strategies,” he told CBS. “The best campaigns are not campaigns that are against but campaigns that are for.”
O’Malley has vowed to decide by late May whether he will make a White House bid. Vice President Biden is among the other top Democrats being mentioned to challenge Clinton.

Federal authorities arrest 6 in Minnesota, California as part of counter-terror probe

Federal authorities said late Sunday that they had arrested six people in Minnesota and California in connection with an investigation into young men who have traveled or tried to travel to Syria to fight alongside ISIS.
A spokesman for the U.S. Attorney's Office in Minnesota said the arrests were made Sunday in Minneapolis and San Diego but there is no threat to public safety. A spokesman for the Minneapolis FBI office confirmed the number of people arrested. No further details were available about the identities of the suspects or the specific charges they faced.
KMSP reported that at least three of the arrests happened in Minneapolis and at least one took place in San Diego. The station reported that three of the men arrested in Minneapolis were already known to authorities.
According to the report, the three traveled with a fourth man, 19-year-old Hamza Ahmed, to New York by bus last November, intending to go to Syria. All four were prevented from boarding a flight to Istanbul at JFK International Airport. In February, Ahmed was indicted for lying to the FBI during a terrorism investigation, conspiring to provide material support to ISIS, and attempting to provide material support. He has pleaded not guilty.
Little information had been released about Ahmed's traveling companions. An FBI affidavit said they are all between the ages of 19 and 20 and live in the Twin Cities.
The U.S. Attorney's Office and the FBI planned a news conference at 10:30 a.m. ET Monday to announce details. Monday's news conference was billed as an announcement of a joint terrorism task force operation.
Authorities say a handful of Minnesota residents have traveled to Syria to fight with militants within the last year. At least one Minnesotan has died while fighting for ISIS.
Since 2007, more than 22 young Somali men have also traveled from Minnesota to Somalia to join the terrorist group al-Shabaab.
Four Minnesotans have already been charged in connection with supporting terror groups in Syria, including ISIS.