CHN: Congress averts Medicare cuts but punts on other cuts to come

The House passed and President Biden signed into law last week a bill to avert billions of dollars in Medicare cuts during the pandemic. The bill, H.R. 1868, extends a pause on an automatic 2 percent cut to Medicare payments to medical providers through the end of the year. The cost of delaying the cuts will be offset by extending the sequester in later years after the pandemic ends.

The bill as it originally passed the House in March also contained a waiver to avoid a much larger $80-90 billion in separate statutory “pay-as-you-go” cuts this fiscal year. The Congressional Budget Office said these cuts (required by a process called sequestration when spending increases the deficit) would be required by a 2010 pay-as-you-go law because of the $1.9 trillion American Rescue Plan Act enacted in March. However, Senate leaders took out the waiver after Republicans protested the lack of offsets. According to CQ, it’s unclear when lawmakers will revisit the paygo cuts. Paygo waivers are regularly included in year-end spending packages with bipartisan support, but there is concern that Republicans could block such a waiver this year in opposition to increased spending under the Biden Administration.