California Healthline: Bowles, Simpson Unveil Deficit-Reduction Plan To Avoid Sequester Cuts

Erskine Bowles and former Sen. Alan Simpson (R-Wyo.) — former co-chairs of President Obama’s deficit-reduction commission — on Tuesday unveiled a $2.4 trillion deficit-reduction proposal, which includes $600 billion in federal entitlement savings over a decade, in hopes of staving off the automatic cuts under sequestration that take effect in March, Modern Healthcare reports (Zigmond, Modern Healthcare, 2/19).

The automatic cuts involve nearly $1 trillion in across-the-board reductions, including a 2% reduction to Medicare reimbursement rates (California Healthline, 2/19).The Simpson-Bowles proposal would replace and double the savings in the sequester, on top of the $2.7 trillion in deficit reduction enacted by the fiscal cliff legislation Obama signed in January (Klein, “Wonkblog,” Washington Post, 2/19).

The plan would achieve the $600 billion in Medicare and Medicaid savings by decreasing provider payments, raising premiums for higher-income beneficiaries, reducing prescription drug costs and making “adjustments to account for an aging population.” The plan also includes $600 billion in savings from tax code reforms and eliminating tax breaks, with the remaining savings coming from a mix of mandatory spending cuts and stricter limits on discretionary spending (Becker/Easley, “Blog Briefing Room,” The Hill, 2/19).

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