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Senate Sets Roadblock on Jobs Bill: Impact is Felt for Doc Fix and Medicaid Funding

Yesterday the Senate, via  a procedural vote, set a roadblock on the continued track toward passage for the American Jobs and Closing Tax Loopholes Act.  The original version, re-crafted by the House to lower the price tag and then sent to the Senate, found limited traction on Wednesday.  Oddly enough, the House version effectively trimmed the original Senate version and yet, even when fiscally re-shaped, it could not garner support in the Senate, the source from which it originated.  My read is that Senators, since the shaping of the original bill, have watched political winds shifting away from support for government bailouts, subsidies, and deficit spending initiatives.

What happened is a bit confusing for people unfamiliar with the parliamentarian rules and procedural machinations of the Senate.  In order for the Bill to come to the floor for a vote, sufficient votes (60) are required to close debate on the legislation.  Without the 60 vote total, debate can continue endlessly and lead into filibuster, effectively killing the Bill as it stands.  Yesterday’s vote showed a suprising lack of support among key Democrats such as Wisconsin Senators Feingold and Kohl.  Republicans were effectively unified in opposition.  As of late yesterday, Senate Democrats scrambled to re-craft yet another, scaled down version that at a minimum, would contain an extension of unemployment benefits and certain key tax measures.

Analyzing the issues, the Bill in its present shape has significant fiscal problems.  First, the diversity of the issues and spending priorities within the legislation create a lack of transparency which today, is politically repugnant to voters.  Second, much of the Bill appears politically as a continuation of federal bail-out spending.  Third, health care reform remains unpopular politically and Senators, wary of the “doc fix” price tag and its ties to an unresolved health care reform matter, don’t want to get any more negative fall-out regarding the costs of health care reform.

The implications for health care at this point are a bit unnerving.  Many states have already laid budgets assuming a continuation of the Medicaid stimulus support, set to end December 31.  Without continuation of the expanded Medicaid match, many states will need to recast budgets, integrating major spending reductions.  Second, the “doc fix” issue also impacts a number of other health care services such as Part B therapy rates which are tied to the physician fee schedule.  (See my related posts regarding Part B cuts and the American Jobs and Closing Tax Loopholes Act).  Without a fix or another delay of the pending cut (21%), physician fees and other Part B services such as therapy will be cut.

My impression is that Congress will scramble for the next week, attempting to unravel the bill and take on certain issues ala carte.  For example, I believe that unemployment benefits will get extended as in Washington, especially for Democrats and their union supporters, failing to do so is political suicide.  I believe Medicaid and the states will get their extended match but perhaps, more incrementally, maybe with an initial extension end date of March 30, 2011.  Finally, I think the “doc fix” issue will get delayed once again; another temporary stay of execution.  The doc fix may be the most politically difficult issue to deal with as its price tag is large and nearly every policy analyst and health care economist point to the need to address the underlying problem of the sustainable growth formula versus the current approach of pushing the inevitable to future dates via current infusions of new deficit dollars.

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June 17, 2010 - Posted by | Policy and Politics - Federal | , , , , , , , , ,

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