House and Senate leaders have named their representatives to a new panel created by the Budget Control Act of 2011 to achieve deep savings in federal programs. By way of background, under the Budget Control Act, which President Obama signed into law August 2, 2011 (P.L. 112-25), lawmakers agreed to increase the nation’s debt ceiling while taking steps to reduce the federal deficit. The deficit reduction component is being implemented in two phases. In the first phase, the law imposes caps that reduce discretionary (non-entitlement) spending by more than $900 billion over 10 years, beginning in fiscal year (FY) 2012. Second, a bipartisan Joint Select Committee on Deficit Reduction is charged with identifying an additional $1.5 trillion in deficit reduction, which could include entitlement and tax provisions. While not specifically required, the panel is expected to consider a variety of Medicare program savings in light of widespread concerns among policymakers about the long-term financial sustainability of the program. The following are the appointees to the deficit reduction committee:
- Senate Majority Leader Harry Reid’s Appointees: Patty Murray (D-WA), John Kerry (D-MA), Max Baucus (D-MT).
- Senate Republican Leader Mitch McConnell’s Appointees: Jon Kyl (R-AZ.), Pat Toomey (R-PA.), Rob Portman (R-OH).
- House Speaker John Boehner’s Appointees: Jeb Hensarling (R-TX), Dave Camp (R-MI); Fred Upton (R-MI).
- House Democratic Leader Nancy Pelosi’s Appointees: James Clyburn (D-SC), Xavier Becerra (D-CA), Chris Van Hollen (D-MD).
The committee must issue its legislative proposals by November 23, 2011, and Congress must vote on the package by December 23, 2011. If legislation is not adopted to achieve deficit reduction targets, an enforcement mechanism would trigger a total of $1.2 trillion in spending reductions in January 2013, split evenly between domestic and defense spending. While Medicare provider payments would be subject to reduction under the enforcement mechanism, the reductions would be capped at 2%. Reed Smith is a preparing a more detailed analysis of the new law.