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Agreement reached in debt ceiling debate

Yesterday, Congressional Leaders and the White House reached a deal that would raise the nation’s debt ceiling, averting a first-ever default by the United States.  In addition to increasing the federal borrowing limit, the plan also included substantial deficit reduction measures. The agreement, which operates in two parts, would raise the debt ceiling by $900 billion immediately in August and September.  Medicare and Medicaid would not be impacted by these initial cuts, despite earlier information that Medicare payments to rural hospitals could be reduced by roughly $14 billion. Thank you to all who called or wrote their Members of Congress on behalf of rural health providers. The grassroots efforts of NRHA membership was tremendous and helped avert possible cuts that would have decimated the rural health safety net program. Your vigilance is again needed because future cuts are possible.  Part two of the debt ceiling legislation creates a 12-member “super congress” made up of equal numbers of members of both parties and both bodies of Congress. This committee would be responsible for making recommendations for $1.2-1.5 trillion in additional savings by Nov. 23. The committee’s recommendations would be subject to a simple up-or-down vote before Dec. 23 and could not be filibustered.  If the recommendations pass, the President could request an additional increase in the debt ceiling of $1.5 trillion. If Congress fails to either act on the committee’s proposal or send a balanced budget amendment to the states before the end of the year, then an automatic “trigger” of across-the-board spending cuts totaling $1.2 trillion would go into effect. The cuts would apply to both mandatory and discretionary spending programs beginning in 2013. Medicaid would not be subject to the cuts, but Medicare provider payments would face a cut of up to 2 percent over nine years (2013-2021). The president would then be authorized to request an additional increase in the debt ceiling of $1.2 trillion. Votes on this agreement are expected this evening in the House and later tonight in the Senate. NRHA expects the bill to pass both chambers.

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