Negotiations to raise the federal debt limit are resuming today between the administration and lawmakers as partisan bickering over the budget continues and newly released projections have underscored worries about Medicare’s finances.
The government hit its debt ceiling a week ago but the Treasury says it can avoid default until early August through “extraordinary measures.” Administration officials this month began meeting with congressional negotiators to develop a compromise plan to raise the debt limit while curbing future deficits.
Vice President Joe Biden is chairing the talks. Negotiators have reportedly identified about $150 billion in budget cuts, but that is far short of what Republicans say will be enough to win their support for a debt limit increase.
Meanwhile, recently released “alternative” projections from the actuary for Medicare and Medicaid Services presented an even gloomier financial picture for Medicare than the one that its trustees drew earlier this month.
The actuary says the “sizable differences” between the trustees’ official projections and the alternative ones “highlight the critical importance of finding ways to bring Medicare costs—and health care costs in the U.S. generally—more in line with society‘s ability to afford them.”
Tax reform scenarios also continue to receive close attention on Capitol Hill. The Concord Coalition as well as various bipartisan study panels have pointed out that eliminating “tax expenditures” — loopholes that favor some taxpayers over others – would allow the government to lower rates and still raise additional revenue for deficit reduction.
Medicare Actuary’s Alternative Scenario
Joint Committee on Taxation: Background Information On Tax Expenditure Analysis And Historical Survey Of Tax Expenditure Estimates
Tax Policy Center: Tax Expenditures Overview
Senate Budget Committee: Tax Expenditures: Compendium of Background Material on Individual Provisions
Treasury Department: As US Reaches Debt Limit, Geithner Implements Additional Extraordinary Measures to Allow Continued Funding of Government Obligations
Secretary Geithner’s Letter to Congress on Measures Undertaken to Avoid Breaching Debt Limit
Social Security 2011 Trustees’ Report (Full)
Medicare 2011 Trustees’ Report (Full)
Concord Coalition Urges Lawmakers to Heed Warnings in Trustees’ Report as They Consider Budget Plans