“The group would get $50 billion in cuts to healthcare spending by ‘increased competitive bidding’ and $50 billion from aligning Medicare provider payments with ‘actual costs.'”

From: The Hill

Liberal group CAP floats sequester replacement

By Erik Wasson

The liberal Center for American Progress on Thursday proposed a new way to  replace part of the nine years of automatic spending cuts enforced by  sequestration, which started March 1.

CAP, the think tank closest in many ways to the Obama administration, is  floating replacing sequestration for 2014, 2015 and 2016, essentially throwing  in the towel on the current fiscal year, which ends in October.

The group argues that the rest of the $1.2 trillion total sequester can be  replaced later and trying to replace it all now will likely lead to a continued  deadlock.

The most difficult aspect of the CAP plan for the sequester for Republicans  to swallow will most likely be the way to counts past tax increases to offset  the deficit impact of turning off future spending cuts.

Most of its replacement cuts involve counting the fiscal cliff tax increases  that went into effect in January. The group argues that this can be used to  offset 60 percent of the sequestration’s $315 billion cost over three years.

CAP sees this as a compromise way to get around Democratic demands for a  balanced deficit solution and Republican arguments against future tax  increases.

“The American Taxpayer Relief Act, better known as the fiscal cliff deal,  enacted about $800 billion in deficit reduction from 2013 to 2023, or about 60  percent of the total deficit reduction achieved by the sequester over that  period. Had that same deficit reduction come about through the super committee  process, it would have reduced the impact of the sequester to only about  $500 billion rather than the currently projected $1.3 trillion,” the Center  argues in its Thursday report.

“Recognizing this, our plan offsets only the remaining 40 percent of the  sequester that has not been paid for already,” it states.

CAP then proposes a series of spending cuts as well as more tax increases to  make up that 40 percent. This part of the plan closely resembles the House  Democratic sequester replacement bill they have been promoting.

The tax increases consist of implementing a minimum tax on the wealthy known  as the Buffet rule as well as ending oil and gas tax breaks.

The group calls on Congress to implement $40 billion of cuts to farm  subsidies, even though both the House and Senate are moving farm bills this  month that cut far less.

The group would get $50 billion in cuts to healthcare spending by “increased  competitive bidding” and $50 billion from aligning Medicare provider payments  with “actual costs.”

The group would use $82 billion of this savings for a new stimulus program.  This includes infrastructure spending, early childhood education and a “Pathways  Back to Work Fund,” which “would help provide employment opportunities for the  long-term unemployed, young people, and low-income people.”

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