Congress Passes Legislation to Raise Debt Ceiling
On August 1st, the House of Representatives voted to approve an increase in the debt ceiling, which is the limit on the amount of money that the federal government can borrow. The US Senate approved the legislation on August 2nd, and President Obama signed it that same day. Some of the highlights of the new law are:
- The current $14.3 trillion ceiling on federal borrowing is increased by $2.1 to $2.4 trillion, which should be enough to allow the Treasury Department to operate into 2013. This would be accomplished in two steps: the debt limit would be increased by $900 billion first, with a second increase of between $1.2 and $1.5 trillion available at the president’s request.
- Discretionary spending is capped for FY 2012 through 2021, so that $935 billion in savings is achieved over 10 years.
- A special joint committee of an equal number of Democrats and Republicans from the House and Senate will be created to recommend ways to reduce the deficit by 2021. This committee can consider the entirety of the federal budget, including cuts to entitlement programs like Medicare and Social Security, and revenue increases. The panel’s recommendations will be subject to up-or-down votes without amendment. The committee must issue its report by November 23, 2011; the House and Senate are required to act by December 23, 2011.
- The second debt limit increase will be $1.5 trillion if one of two things happens: the joint committee recommends and Congress enacts an additional $1.5 trillion in savings for fiscal years (FY) 2012-2021 or a constitutional amendment requiring a balanced budget is passed by both chambers and is sent to the states for ratification.
- If Congress enacts smaller savings, the second debt limit increase would only be $1.2 trillion. Also, any difference between the enacted savings and the $1.2 trillion increase would be offset by dollar-for-dollar spending cuts. Programs targeting low-income individuals and families are largely exempt from cuts. Medicare cuts can be no more than 2% of program spending, and can only reduce provider payments, not affect beneficiaries.
It is not immediately clear how gravely federal hemophilia programs and other public health programs of interest to the bleeding disorders community will be affected by these cuts. It is reasonable to assume that the programs will see decreased funding. NHF will continue to monitor the situation with the joint committee and will advocate for continued funding for hemophilia programs.