The Center for American Progress proposed a 鈥渇ail-safe鈥� mechanism designed to ensure that a health care overhaul wouldn鈥檛 add to the federal deficit.聽The plan, part of a financing proposal for health care legislation that was released at a breakfast with reporters, is aimed at addressing concerns that a revamping might not produce expected cost savings over the long run, leading to a big increase in the budget gap.
Under the plan, national health care spending would be held to a specific growth rate. If growth were higher, the 鈥渆xcess spending鈥� would trigger the fail-safe mechanism for the following year.
The proposal was authored by David Cutler, an economics professor at Harvard University, and Judy Feder, a professor of public policy at Georgetown University and a senior fellow at the think tank, which has close ties to the Obama administration.
Some of the ways spending could be reduced, they said, would be: slowing payment increases to Medicare providers; making individual insurance subsidies contingent on the achievement of system-wide savings, and reducing the tax preference for employer-provided insurance beyond what was already included in any health care legislation.
Cutler and Federal proposed that the policy options be decided by a new commission overseen by Congress.
John Podesta, head of the think tank, said he thought the administration 鈥渨ould be interested鈥� in the report. 鈥淚 know they are concerned鈥� about keeping the legislation budget neutral over the long run, he said.
聽reports that the proposal 鈥渨as released as the health care debate enters a critical moment.鈥� Former Senate Majority Leader Tom Daschle , who also backs the proposal, appeared with Podesta at the CAP event. Both put 鈥渢he odds of the House and Senate passing a bill before the August recess as somewhat better than 50-50. They called for flexibility and compromise to reach an agreement, but neither seemed particularly optimistic about the chances of drawing significant Republican support.鈥� Daschle defined bipartisanship as 鈥渢he involvement of one or more鈥� Republicans. He also said the use of 鈥渁 parliamentary procedure known as reconciliation was 鈥榗ertainly a viable fallback.鈥� Using reconciliation would prevent opponents from threatening a filibuster, meaning a plan could pass with Democratic votes alone鈥� (Page, 6/29).