GOP Snatches ‘Obamacare’ Cuts As Payroll Fight Wraps Up

February 15, 2012 1:25 p.m.
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While Democrats will claim victory in the impending deal to extend the payroll tax cut through 2012, Republicans have also won some fodder for their base on a key issue: They’ve managed to slice off a piece of the health care reform law — albeit a fairly small piece.

A summary of the deal circulated to allies and insiders by House GOP leadership boasts that they’ve extracted concessions worth $11.6 billion from the Affordable Care Act in negotiations with Democrats. The cuts hit the prevention fund and provider reimbursements — it’s not a big chunk of the nearly $1 trillion law, but it’s a salient political win for Republicans after Democrats repeatedly resisted efforts to cut the ACA in the Super Committee and December deal.

The Republicans may also have won on what could become an important matter of principle: whether savings from the projected wind-down of war spending could count as offsets. Democrats had wanted the cutbacks from the “Overseas Contingency Operation” (basically, the wars in Iraq and Afghanistan) to be able to be used as offsets for the so-called “doc fix.” Republicans had been under immense pressure to cave on that as well. However, many argued that since these operations had been scheduled to wind down anyway, then they did not count as real savings. Furthermore, some feared that if they allowed this maneuver for the “doc fix” then Dems would try to use it to bankroll their pet infrastructure projects.

Here’s the relevant except from the GOP-written Wednesday document, obtained by TPM and the numbers confirmed by Democratic and Republican leadership aides:

Repeals key parts of ObamaCare and includes other health savings

–Cuts to ObamaCare pay for more than half ($11.6 billion) of the Medicare spending in the agreement.

–Cuts an ObamaCare slush fund (the Harkin Prevention Fund) by $5 billion.

–Eliminates an ObamaCare giveaway to Louisiana saving $2.5 billion.

–Reduces Medicaid spending (DSH rebase) by more than $4 billion.

–Other health savings total $9.6 billion and include reductions to Medicare “bad debt” and clinical laboratory payments

A senior Democratic aide downplayed the cuts, telling TPM that “these are mostly consensus items that don’t touch benefits.”

Progressive Democrats including Sen. Tom Harkin (IA), who championed the $15 billion prevention fund, won’t be happy it’s taking a hit. But Republicans more or less had Dems cornered because President Obama offered to cut the fund in his September deficit-reduction blueprint — he proposed a $3.5 billion reduction but the GOP ran with it and got more.

The agreement also rolls back a special Medicaid funds deal for Louisiana, which critics decry as a backroom deal to win the vote of centrist Sen. Mary Landrieu (D-LA), and supporters say was necessary to help a state that’s still reeling from Hurricane Katrina. It additionally cuts Medicaid pay bumps for hospitals with a high proportion of uninsured patients.

The money will be used for a 10-month override of the 27.4 percent cuts to Medicare physician reimbursements scheduled for March 1.

Update: A Dem aide adds some context, emailing: “Democrats stopped Republicans efforts to cut benefits for Medicare beneficiaries and to undermine health coverage for millions of Americans and now the GOP is trying to spin that away.”

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