Committee for a Responsible Federal Budget
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December Sequester Suspension Misses the Mark

For Immediate Release

Congress is considering legislation that will cancel the PAYGO sequester for 2022, extend temporary COVID-era Medicare payment policies, and create a mechanism for fast-track passage of a debt ceiling increase in the Senate. Specifically, the bill would move the PAYGO scorecard balance for 2022 to 2023, extend the COVID Medicare physician bonus payment at 3 percent in 2022 (from 3.75 percent in 2021), and delay reinstatement of the Medicare sequester until the second half of Fiscal Year 2022.

The following is a statement from Maya MacGuineas, president of the Committee for a Responsible Federal Budget:

Congress should raise the debt ceiling as soon as possible, and ideally it should be raised with long-term budget reforms attached to it. It is good to see progress being made on completing this important task, but this should have been done months ago.

The other changes Congress is considering are important but should be done in a fiscally responsible way or else not at all. There are two very different sequesters – the Medicare sequester resulting from the failure of the Super Committee and the PAYGO sequester resulting from large borrowing this year – and they require two very different approaches.

Congress should not extend the temporary Medicare sequester hiatus, which was meant as one-time COVID relief and not permanent policy. The Medicare sequester has been in effect for most of the last decade, and lawmakers have explicitly extended it on seven separate occasions – including as recently as last month. And Congress should certainly not extend the Medicare physician bonus payments, which were meant solely to help medical professionals through the worst of the pandemic. With the economy recovering, hospital revenue above pre-pandemic levels, and inflation an increasing threat, it’s time to let payment schedules go back to normal.

It’s encouraging this legislation would ultimately phase back in the Medicare sequester, provide a lower physician payment bonus than the current one, and offset the costs on paper. But the phase-in is too slow, the payment is too high, and the offsets are largely a shell game.

The PAYGO sequester, on the other hand, likely needs to be dealt with given resistance in Congress to letting it hit. But the abrupt scheduled cuts should be responsibly replaced with long-term savings or reforms – not simply kicked into the future as this bill would do.

Most importantly, Congress must raise the federal debt ceiling. Historically, such increases have been coupled with fiscally responsible budget reforms and hopefully they can be again. But no one should put in jeopardy the full faith and credit of the U.S. government.


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