One of the casualties of the fiscal cliff is looking to be government spending on Medicare, according to various reports on talks between Democrats and Republicans on the Hill.
Physicians should be keeping an eye on the fiscal cliff proceedings since certain governmental spending cuts could reduce Medicare reimbursement rates by as much as 27%.
According to Politico, the fiscal cliff solution is going to include both tax increases and cuts to entitlement programs to appease both sides. Politico reports:
“Entitlement programs, mainly Medicare, will be cut by no less than $400 billion — and perhaps a lot more, to get Republicans to swallow those tax hikes.”
However, Democrats have been very resistant to cuts to programs like Medicare and Medicaid. Erskine Bowles, a former Democratic White House chief of staff who has been acting as an informal envoy between Republicans and the White House, told The Washington Post that there is just a one in three chance an agreement will be reached before the end of the year.
The good news, though, is that Lloyd Blankfein, the chief executive officer of Goldman Sachs, said on CNBC that the president’s fiscal cliff plan is “very credible” and he is optimistic the deal will get done.
Politic also reports that tax increases for people making more than $250,000 are essentially guaranteed. And considering House Speaker John Boehner (R-Ohio) was aiming for an overall tax hike of $800 billion, while President Barack Obama put down $1.6 trillion, the overall tax hike will probably be close to $1 trillion.
Ultimately, Politico reports, the fiscal deal is between Boehner and Obama, not Republicans and Democrats in general.
Inside the Talks: Fiscal Framework Emerges – Politico
Blankfein: Seems Like “Fiscal Cliff” Deal Could be “Reachable” - CNBC