Healthcare Business News

Fiscal cliff appears closer as sequester bill clears House and 'Plan B' vote is dropped

By Jessica Zigmond
Posted: December 20, 2012 - 9:30 pm ET

The House narrowly approved a measure that would maintain across-the-board cuts to Medicare payments while rolling back other spending reductions scheduled for 2013, but the legislation drew a veto threat from the White House. Meanwhile, House GOP leaders failed to muster votes for their "Plan B" proposal to avert tax increases and pulled that bill from the floor.

Thursday night's votes appeared to set up yet another stalemate in the year-end fiscal negotiations, watched closely in the healthcare industry because the solution will likely require addressing a looming 26.5% cut to Medicare physician pay and because a deal might include new cuts to federal health programs.

Introduced by House Majority Leader Eric Cantor (R-Va.) as part of the ongoing debt discussions, the Spending Reduction Act of 2012 passed 215-209, with one member—Rep. Rob Bishop (R-Utah)—voting “present” and six members not voting. The bill would supplant one year of the sequester—the across-the-board spending cuts to defense and nondefense programs outlined in last year's Budget Control Act—with other spending cuts and an additional $200 billion in savings over 10 years.

Earlier, Senate Majority Leader Harry Reid (D-Nev.) said the upper chamber would not bring the House's sequester bill to a vote, and the White House promised to veto the bill if the president is presented with it.

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“This approach sharply undermines critical domestic priorities, such as efforts to prevent hunger and support low-income families and communities, to make healthcare more affordable through the implementation of the healthcare law, to protect consumers and implement the Wall Street Reform Act, and to support homeowners struggling to stay in their homes,” said a White House statement of administration policy.

Healthcare providers criticized the sequester bill on Thursday for maintaining about $11 billion in Medicare payment cuts for 2013 while also imposing steep cuts to Medicaid.

The GOP's “Plan B” tax plan would extend current tax rates for Americans who make $1 million or less.

The House adjourned on Thursday, and it's unclear when members will return.

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