August 5th, 2011 | View Archive
BUDGET CONTROL ACT OF 2011
After months of negotiations, President Obama signed the Budget Control Act of 2011 on Tuesday afternoon. The BCA is comprised of three main parts: debt-ceiling authority, deficit reduction, and funding for Pell Grants. Here is a short summary of each of the components:
The Treasury Department is authorized to borrow beyond the current debt ceiling up to an additional amount of $400 billion immediately, subject to a vote of disapproval by Congress. If there is no disapproval, the President can raise the debt ceiling an additional $500 billion.
The BCA requires both the Senate and House to vote on a balanced budget amendment by the end of the year. If the amendment passes and it sent to the states, the President can request another increase to the debt ceiling up to $1.5 trillion (subject to Congressional disapproval).
Regardless of the outcome of the votes on the balanced budget amendment, the BCA calls for 10-year discretionary spending limits aimed at reducing the deficit by $917 billion over the course of the next ten fiscal years. For FY12 and FY13, these cuts are to be divided one-third from defense and security accounts and two-thirds from non-security discretionary accounts.
In addition, a newly created Joint Select Committee on Deficit Reduction will be charged with finding at least another $1.2 trillion in cuts over the next ten years. The joint committee is to be comprised of 12 members appointed by the majority and minority leaders of the Senate, and the Speaker and minority leader of the House, who each must appoint three members. The "Super Committee" (as it is being called) has until late this year to recommend cuts and both the House and Senate have a limited amount of time thereafter to approve or disapprove by votes of simple majority. If the Super Committee fails or the votes do not pass, automatic across-the-board cuts to discretionary accounts will be imposed up to the $1.2 trillion threshold.
It is this last provision which could cause us the most trouble. Should the Super Committee fail and mandatory cuts are imposed, the BCA specifically calls for payments to Medicare providers to be reduced by 2%.
The BCA includes very specific deadlines for the actions of the Super Committee. The Members will be appointed by August 16 and must meet within 31 days thereafter. The Committee then has until November 23 to create and vote on a proposal, and the House and Senate have until December 23 to approve or disapprove.
As with earlier debt-ceiling proposals, additional funding for the Pell Grant program is included in the BCA. The program is allocated $17 billion in mandatory funds for the next two years. This amount is offset by the elimination of subsidized loans to graduate students (with exceptions for students enrolled in a program leading up to a degree or certificate or students enrolled in a program necessary for a teaching credential or certification).
Timeline of Upcoming Key Dates in the Budget Control Act of 2011:
- 8/16 - Joint Commission members are appointed. (3 D Sens, 3 R Sens, 3 D Reps, 3 R Reps)
- 45 calendar days after bill passes - First Joint Commission meeting.
- 10/14 - Each Senate & House committee may send Joint Committee recommendations for changes to reduce deficit by at least $1.5T.
- 11/23 - Joint Commission votes on a 1) report containing a detailed statement of the findings, conclusions, and recommendations and the estimate of CBO, 2) proposed legislative language.
- 12/2 - If approved, the Joint Committee submits the report and legislative language to the President, the Vice President, and Congress.
- Next legislative day – Joint Committee's legislative language is introduced in Senate and the House.
- 12/9 – Any House and Senate Committee to which the Joint Committee language is referred to must report it to the House and Senate without amendment. If Committees fail to report by this day, it will be automatically discharged to the House and Senate. In Senate, the motion to proceed is not debatable. Consideration and debate limited to 30 hours. No amendments are in order.
- 12/23 – Vote on Joint Committee bill in both House and Senate.
- 1/31/12 – Joint Committee terminates.
Flowchart of the Budget Control Act
REGULATIONS PROPOSED FOR THE PATHWAYS PROGRAM
On August 4, 2011, the U.S. Office of Personnel Management proposed regulations for the Pathways Program, which is designed to create an easier and more transparent pathway for student and college graduates to become involved in public service. Many government officials and educators have been advocating for the Pathways Program, saying that the standard federal hiring process can be daunting and discouraging to many students.
You can read the statement issued by the National Association of Schools of Public Affairs here: www.naspaa.org/PolicyCenter/DraftRegsStatement.pdf
You can read the press release from the U.S. Office of Personnel Management here: www.opm.gov/news/opm-issues-proposed-regulations-to-help-recruit-and-train-students-and-recent-graduates,1710.aspx
CMS ISSUES INPATIENT, LTCH FINAL RULE
This week, the Centers for Medicare & Medicaid Services issued a final rule on the inpatient and long-term care hospital prospective payment systems (LTCH PPS) for fiscal year 2012. The final rule, which will apply to approximately 3,400 acute care hospitals and 420 LTCHs, will be effective for discharges occurring on or after Oct. 1, 2011, unless otherwise specified in the rule. The rule does not implement the full 3.15% proposed cut to the inpatient PPS. Instead, it implements a cut of 2.0%, which represents $1.2 billion more in payments to hospitals in FY 2012 compared to the proposed rule. The proposed rule called for an average decrease of 0.55% in hospitals' FY 2012 operating payments compared to 2011, but the final rule increases average payments by 1.1%. This amounts to a $1.2 billion increase in operating payments compared to FY 2011. In addition, CMS finalized its proposal to add a Medicare Spending per Beneficiary measure to the inpatient quality reporting program in FY 2014.
The final rule can be downloaded from the Federal Register at: www.ofr.gov/OFRUpload/OFRData/2011-19719_PI.pdf
View the entire press release here: www.cms.gov/apps/media/press/release.asp?Counter=3975&intNumPerPage=10&checkDate=&checkKey=&srchType=1&numDays=3500&srchOpt=0&srchData=&keywordType=All&chkNewsType=1%2C+2%2C+3%2C+4%2C+5&intPage=&showAll=&pYear=&year=&desc=&cboOrder=date
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