Deficit reduction plan spreads pain fairly, broadly: White House
20 Sep 2011
President Barack Obama's budget director says, the president's new deficit-reduction plan would impose "a lot of pain," which was particularly true of White House plans to cut $320 billion from projected spending on Medicare and Medicaid over the next decade.
The president's plan provides for higher premiums and deductibles for many Medicare beneficiaries and lower Medicare payments to teaching hospitals and rural hospitals.
Further the plan proposes charging co-payments to frail homebound older people who receive home health services and reduction in the growth of federal payments to states for treating low-income people under Medicaid.
The White House said Obama's proposals would cut $248 billion from the projected growth of Medicare in the next 10 years, even as it trimmed $72 billion off Medicaid and other health programmes. A large part of the Medicare savings would go to pay doctors, who would otherwise see deep cuts to the fees they receive for the treatment of Medicare patients.
The proposals come under a package aimed at pruning deficits by more than $3 trillion over 10 years, in addition to $1 trillion in savings already assumed under the debt limit law that Obama signed in early August. The package includes tax changes that would go towards raising $1.5 trillion in revenue over 10 years (See: Obama to present $1.5-trillion tax raising plan).
Obama's debt reduction plans would also include the US Postal Service which would cut losses by ending Saturday mail delivery. The plan also provides for reduction of $31 billion in farm subsidies over 10 years and would require federal employees to contribute more to their pension plans. Military retirees would also be required to pay more for prescription drugs and air travelers would also be charged higher fees for "aviation security."
