Ending the stopgap budget
The United States government has been at a relative standstill since the beginning of President Barack Obama’s first term, with Republicans filibustering almost every bill in the Senate and, since 2011, the majority-Republican House passing severely conservative alternatives to mainstream ideas.
The 112th Congress, in particular, was a travesty and has been incompetent in solving major issues that face the nation. From deficit reduction to simply passing a budget, Congress hasn’t compromised, and the first step towards sanity is achieving bipartisan agreement on an annual budget for the U.S. government.
Although both the 111th and 112th Congress passed significant bills regarding health care, education, taxation and deficit reduction, the Senate has not passed a comprehensive budget since April 2009. The ongoing debate over the spending priorities of the U.S. government has not been resolved, and Senate Majority Leader Harry Reid has been unwilling and unable to bring a budget to the floor for debate.
Now, to the public it seems that all Congress has been doing is debating the budget, but the parliamentary realities of the two chambers are quite different. Instead of passing comprehensive, annual budgets, the federal government has been funded by stopgap compromises and continuing resolutions such as the Budget Control Act, which resolved the 2011 debt ceiling crisis, and the American Taxpayer Relief Act (H.R.8), which averted the fiscal cliff.
The stopgap measures of H.R.8 are apparent. The law provides a one-year “doc fix” for Medicare that extends current physician payment rates until Dec. 31, 2013, to prevent a 27 percent reduction in said payment rates. It will cost $25.17 billion over 10 years. This cost control method, which has been extended annually since 1997, protects doctors from pay cuts automatically required by Medicare law. The American Medical Association (AMA) and over 100 other medical groups propose a permanent solution to the “doc fix,” but repealing it would cost $245 billion over 10 years. President Obama proposed repealing the “doc fix” and covering the cost with $400 billion in health care savings, but that option never came to fruition.
Instead of dealing with the “doc fix” for good, Congress surrendered to its modus operandi, a temporary fix. In order to cover the $25 billion cost of the one-year fix, hospitals will face a $10.5 billion recoupment of Medicare overpayments and a $4.2 billion reduction in payments to hospitals that care for large numbers of Medicare patients, according to Kaiser Health News.
Hospital groups are unhappy with the fiscal cliff deal. Dr. Jeremy Lazarus, president of the AMA, said in a press release that the “last-minute action” is “a clear example of how the Medicare program is increasingly unreliable for physicians and patients. Congress’ work is not complete. … Over the next months, it must act to eliminate this ongoing problem once and for all.”
The stopgap funding will influence federal spending on colleges and universities. The fiscal cliff deal did not address the spending cuts known as sequestration, which were pushed two months into 2013. According to The Huffington Post, the fiscal cliff deal spared the American Opportunity Tax Credit, but delayed sequestration could cause an 8.2 percent cut in all discretionary spending and a 7.6 percent cut in mandatory spending, which would cut funding for scholarships and research to universities. The deal also capped charitable tax deductions, which Inside Higher Ed noted are major source of funding for universities through alumni donations. Education still faces cuts in federal research money and eligibility for federal financial aid programs in 2013.
Obama warned, in reference to higher education, “We can’t keep cutting things like basic research and new technology and still expect to succeed in a 21st century economy,” The Huffington Post reported.
These potential cuts and temporary patches are representative of the inability of opposing politicians to compromise and the intransigence of tea party Republicans about federal spending. When polled, strong majorities of Americans oppose severe cuts to federal spending.
Serious people, including the Simpson-Bowles commission, the Obama administration and Democrats in Congress have proposed comprehensive budgets that reform taxes, earned benefits such as Social Security and Medicare, and discretionary spending that keep much of the federal government intact, while reducing the deficit and the debt. Both Democrats and Republicans must come together on comprehensive budget reform. The U.S. economy is the largest in the world and has the ability to adapt to changing conditions in both the public and private sectors.
Massive debt is the only condition in which the U.S. economy can fail, and we are not there yet. According to the Congressional Budget Office, the federal debt held by the public reached 73 percent of GDP at the end of 2012. This is still far below the danger-levels over 100 percent, and the deficit reduction undertaken by the president and Congress since 2011 has ensured that the debt will not go over 90 percent until at least 2022.
Reforming the federal budget as soon as possible is key to ensuring continued economic recovery and the fiscal stability of the U.S. government. Most of the key players in Washington agree on a path that decreases the national debt, and a few radical members on either end of the political spectrum must not derail progress. The American people face massive uncertainty as to the budget of the federal government and even whether the government will pay its debts. The only way to ease uncertainty and improve confidence is to have a solid budgetary plan for the future.
Detrimental stopgap measures will continue to breed uncertainty, and the only solution is for Congress and the president to do their job and pass a real budget.
Zac Bears is a Collegian columnist. He can be reached at email@example.com.