The co-chairs of the Joint Select Committee on Deficit Reduction have announced that the committee has failed to come to an agreement on a deficit reduction strategy.  The bi-partisan, bicameral committee, formed by the Budget Control Act, was charged with reducing the national deficit by at least $1.2 trillion.

The committee’s failure to reach an agreement means automatic spending cuts totaling $1.2 trillion, to be split between defense spending and non-defense programs, will become effective in January 2013.  Under this across-the-board cut, hospitals face a 2 percent reduction to Medicare payments over nine years (2013 to 2021).  Medicaid cuts are, however, exempt from the cuts.

Congress will now take the time to determine the next steps for deficit reduction.  Some are calling for the cuts to be repealed or delayed further, though the president has already threatened to veto any attempts to do so as a means to encourage continued Congressional action on deficit reduction.

IHA strongly opposes the cuts to hospitals as not only are they incredibly arbitrary, but hospitals have already committed to more than $155 billion in Medicare cuts to help finance the health care reform law.  By simply piling on more and more cuts, hospitals are finding themselves unable to expand critical services and are unable to create jobs with so much financial uncertainty, adding additional pressure to the economy.  IHA will continue to work with Iowa’s Congressional Delegation on this issue.