Deficit Reduction Talks Continue, Biden Group Sets July 1 Deadline - June 21, 2011

NAPH has been monitoring the process of the bipartisan deficit reduction working group being chaired by Vice President Joe Biden. The group has been meeting on a regular basis, with three planned meetings to be held this week. Over the weekend, additional insight on the group’s discussions and goals were shared. The “Biden group” has set a target of $4 trillion in savings and set a July 1 deadline to release a framework for this legislation. They hope to move legislation through both houses of Congress prior to the Aug. 2 debt ceiling expiration. It is still unclear how the group will reach that amount of savings, but based on conversations NAPH has had with members of the Biden group and others, Medicaid cuts are still a focal point. The bipartisan group of Senators known as the “Gang of Five,” previously the Gang of Six, has also announced that they are close to releasing their recommendations for deficit reduction. Their proposal will likely contain a three-to-one ratio of cuts to revenue. NAPH is developing materials and talking points around the debt limit legislation. Those materials will be available to NAPH members this week on the Advocate section of the NAPH website.

On June 13, all 29 Republican governors submitted a letter to Sen. Orrin Hatch, R-Utah, the ranking member of the Senate Committee on Finance, and Rep. Fred Upton, R-Mich., the chair of the House Committee on Energy and Commerce, setting forth several principles for achieving Medicaid reform. While the letter addressed state need for more flexibility in the Medicaid program, it notably did not specifically endorse proposals to establish Medicaid block grants. The fact that the governors are not explicitly demanding block grants is seen by some as encouraging. Speaking at a Heritage Foundation event on June 15, Hatch outlined the need for comprehensive Medicaid reform. In his remarks, Hatch stressed the need to modernize the Medicaid program to enable it to continue to serve the vulnerable. Hatch also stated that he looked forward to working with governors to develop solutions and turn their principles into law.

On June 23, the Senate Finance Committee will be holding a hearing on health care entitlements. NAPH will monitor that hearing and continue to watch for developments in the deficit reduction negotiations.