What Lessons Do We Need to Learn From the December Bipartisan Budget Deal?

January 24, 2014

Time seemed to stand still in Washington, D.C. during the sixteen-day government shutdown in October. Although public frustration quickly reached a boiling point, days turned into weeks and there was little in the way of real conversations to break the log-jam.

Ultimately, the legislation that reopened the government pushed the major fiscal deadlines a little bit down the road. The first deadline required Congress to pass a budget by December 13. There was healthy skepticism that anything would come of it, but a bipartisan budget deal was reached.

It is important for the hospital community to analyze the direct impact of the provisions, but also look at the broader implications of what Congress did in that deal.

In total, the law will result in $23 billion in deficit reduction. The hospital community shoulders $15 billion of that, although $12.7 billion does not take effect until 2022. HAP has shared the details of the positive and negative hospital impacts in previous communications.

Here is the point: it looked almost miraculous that after the incredibly divisive fall session, Congress was able to come to this breakthrough bipartisan deal. But when we look at what they did­—extend arbitrary cuts to mandatory spending into budget out-years—we see this is really more of the same paralysis. 

Given time limitations and the political climate, it was easier for lawmakers to push these cuts out rather than dig into difficult decisions about real systemic reforms. Unfortunately, we paid the price! 

Since the beginning of January, the U.S. Senate has been grappling with reauthorizing emergency unemployment benefits. Majority Leader Harry Reid proposed extending mandatory spending sequestration cuts into 2024 to pay for the benefits, but he has drawn opposition from both sides of the aisle. 

Some Democrats have objected to the concept of extending sequestration and some Republicans have argued we should not pay for 2014 unemployment benefits with 2024 mandatory spending dollars. 

Although an initial vote failed, Senator Reid has pledged to pursue the policy again after the Martin Luther King Day district work period. And we can be sure extending mandatory spending sequestration will be suggested as an offset in the future. 

We must engage our federal lawmakers to impress upon them why these arbitrary cuts are not smart policy and significantly impede our work toward better health and better care at lower cost.

There is a small silver lining in the budget deal. It offers hope that a commitment to governing will overcome the dysfunction of 2013. We have an interest in that stability; uncertainty in Washington profoundly impacts us as employers, community assets, and health care providers.

There are significant policy challenges facing our nation; meaningfully addressing those issues will require very difficult decisions. We need to be engaged in that process.