With the expected failure of the congressional Super Committee, the questions now are where are the automatic cuts of $1.2 trillion to come from?
The automatic cuts may not be so devastating on the non-defense spending side of the equation. Both Medicaid and Social Security are spared from the funding reductions and Medicare cuts are limited to 2 percent of the entitlement program’s budget.
Budget hawks looking for significant spending reductions herald the automatic cuts as real deficit-reduction. And entitlement program defenders claim the limited cuts — which include exceptions for the poor and disabled — are less damaging than any that are likely to come out of a supercommittee deal.
Under the automatic cuts, or sequestration, Medicare will lose about $123 billion between 2013 and 2021. But that entire amount will come out of the pockets of doctors and hospitals, not grandma and grandpa.
“If there’s a deal, it could be much worse,” said Eric Kingson, the co-director of Social Security Works. “I’m not going to suggest that a 2 percentage point cut focused on providers may not result in tighter payments for certain kinds of procedures, but it is far less onerous than further raising deductibles on people.”