by Brendon Nafziger
, DOTmed News Associate Editor | February 14, 2011
President Obama's proposed 2012 federal budget includes a $62 billion stop-gap to a problem that bedevils health care every year: coming up with a so-called doc fix.
The $3.73 trillion budget, unveiled Monday morning, comes in the face of a growing deficit, projected to reach $1.65 trillion this year, according to the Obama administration. The budget proposal features belt-tightening cuts and tax break rollbacks aimed to slash the deficit by $1.1 trillion over the next decade.
But it also includes a two-year delay in spending cuts in Medicare payments to doctors brought by the sustainable growth rate formula. This formula, a product of a 1990s burst of congressional fiscal hawkishness, mandates that spending on Medicare stays in line with the overall growth of the economy. This results in frequent threats of massive pay cuts to doctors, which Congress routinely votes to delay.
Most recently, in December, Obama signed a one-year freeze
on the cuts, which would have reached nearly 25 percent. A permanent fix is estimated to cost more than $200 billion over the next decade.
About two-thirds of Obama's proposed budget is funded in part by cuts to government programs, such as grants to airports or military spending. Another one-third would come from limiting tax deductions for high-income taxpayers for charitable contributions, mortgage interest and state and local tax payments, NPR reported.
Nonetheless, the budget's $1-trillion deficit reduction is seen as a mere snip by some Republican critics, as it would still add close to $7 trillion to the public debt over the next decade, CNN reported.