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House Passes Sequester Replacement Measure

Posted on 5/10/2012 by NTOCC ® in Public Policy Updates
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Today, the House of Representatives passed H.R. 5652, the Sequester Replacement Reconciliation Act. The bill is a Republican led measure to avert deep cuts in defense spending that are scheduled to go into effect in January of 2013, as well as make additional spending cuts to reduce the deficit.

The legislation offsets some of the scheduled cuts to defense by making additional cuts to domestic spending. It is important to note that the replacement measure would leave the scheduled 2% cuts to Medicare provider payments in place.

The $300 billion in domestic spending in H.R. 5652 includes cuts to key health care programs, such as:

  • Repealing the Prevention and Public Health Fund ($10.9 billion over 10 years);
  • Rebasing of Medicaid payments for Disproportionate Share Hospitals (DSH) ($4.2 billion reduction over 10 years);
  • Eliminating State grants to establish health exchanges ($14.1 billion reduction over 10 years);
  • Eliminating state maintenance of effort requirements for Medicaid and the Children's Health Insurance Program ($1.4 billion).

The Senate is not expected to consider the legislation, as Democrats are strongly opposed to the bill. However, with deep cuts still looming to both defense and health care programs, this bill could provide a starting point for budget negotiations following the November elections.