• Budget background. Congress needs to increase the debt limit so the country can continue to pay its debts (make good on its Treasury bonds). This must be done by August 2. Most economists seem to agree that the alternative, a “default” on the nation’s debt, would be disastrous for the world economy.Bottom line: Parents – including you -- need to tell Congress not to harm the Medicaid program and the children and families who depend on it. Capitol Hill supporters of Medicaid are imploring groups to speak up because most congressional offices are not hearing any “noise” about Medicaid, like they did on Medicare. We need to change that!
• But there is a significant bloc of Members of Congress who say they will not vote to increase the debt limit unless significant steps are taken to reduce the deficit (resulting from spending more than is taken in, which is distinct from the total debt). The deficit can be reduced by cutting spending, increasing revenues (taxes) or a combination of the two. In turn, spending can be reduced by cutting “discretionary” spending (programs for which annual appropriations must be made, such as Title V) and/or cutting “entitlement” programs, of which the big ones are Social Security, Medicare, and Medicaid. The real potential for savings is in the entitlements.o Medicaid. Politically, it is very difficult to cut Social Security and Medicare due to the power of the seniors lobby. That leaves Medicaid very vulnerable. One way to reduce federal Medicaid spending is through a “block grant,” as assumed in the budget approved by the House. Under a block grant, a fixed amount of Medicaid money would be given to each state, meaning the program would no longer be an entitlement, and states could cut populations and/or services that now must be covered. Other ways that Medicaid could suffer a cut would be through a cap on overall federal spending, federal health spending, or entitlement spending. A cap could lead to a block grant if it would result in deep cuts to the program, since changing the entitlement nature of the program is the only way to ensure federal savings on a large scale.
o Maintenance of Effort for Medicaid and CHIP. In addition, Medicaid and CHIP are threatened by the possibility that Congress will repeal the so-called “maintenance of effort” (MOE) provision of the Affordable Care Act (ACA). The MOE requires that states maintain, until 2019 for children, the Medicaid and CHIP eligibility levels and enrollment procedures that they had in place when the ACA was enacted. It is expected that, without the MOE requirement, states would cut Medicaid beneficiaries and/or services, and cut the CHIP program, to save money. A bill to repeal the MOE was approved by the relevant subcommittee and is expected to be marked up by the full committee on Energy and Commerce within the next few weeks. It is quite possible that MOE repeal could be included in a budget agreement, regardless of whether this bill advances. More details about the MOE follow this report.
• Status of budget negotiations. Vice-President Biden is leading closed-door, bipartisan negotiations among representatives of the administration and Congress. It’s quite possible, though, that the ultimate negotiations will take place between the President and Congressional leadership at the last minute.
An easy way to identify and connect with your Senators and Representative is through the Congressional directory.
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