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Fiscal Cliff Agreement: Concerns Going Forward

January 4, 2013

Fiscal Cliff Agreement: Concerns Going Forward

The American Taxpayer Relief Act (H.R. 8), which Congress passed on New Year's Day and the President signed into law on Thursday, is a stopgap, bare bones measure that leaves most of the larger issues of deficit reduction and responding to long-term budget reform unresolved. While the agreement's provisions are a mix of "the good, the bad, and the ugly," as one advocate noted, the agreement should not be judged as if it were the final word. There is much more to come, especially in the next three months. One way to look at the agreement is as the end of Act II of a continuing drama, with Act I being the Budget Control Act of 2011. There are one or more acts to be played out before a more decisive denouement. These next stages will focus on increasing the debt ceiling, the still pending automatic spending cuts (sequestration), and completing the appropriations process for the current 2013 fiscal year. That said, the agreement raises very important concerns going forward for those of us in the HIV/AIDS and broader health communities and others concerned about social and economic justice. The concerns will require us to remain very vigilant over the next 90 days.

The central theme of the concerns is that some provisions of the fiscal agreement and its stopgap approach will create tremendous pressure on spending for non-defense discretionary (NDD) programs and entitlement programs, including Medicaid and Medicare. The Republican leadership in both the Senate and the House of Representatives has made it very clear that they view the next stages as being all about deep spending cuts and drastic changes to Medicaid, Medicare, and other safety net entitlement programs for low-income people. In an op-ed article posted on Thursday, Senate Minority Leader Mitch McConnell wrote: "... the only thing we can do to solve the nation's fiscal problem is to tackle government spending head on -- and particularly, spending on health care programs ..." Congressional Republicans see the $620 billion revenue in the fiscal cliff agreement as achieving a "balanced approach." They likely will use the debt ceiling debate, decision-making on sequestration, and the FY 2013 appropriations completion to force the President and Congressional Democrats to accept an all spending cuts approach to resolve the issues.

The President has made forceful statements that the next stages must be balanced with additional revenue as well as spending cuts, without harming entitlement programs. He has noted that the fiscal cliff agreement provision that delays sequestration to March 1 was paid for dollar for dollar with revenue and spending cuts. He sees that as a precedent for moving forward. He has indicated also that he will not negotiate spending cuts for an increase in the debt ceiling.

The upcoming battles will be very important for the HIV/AIDS and broader health care communities. Funding for the Ryan White Program, HIV prevention, AIDS housing, and implementation of the Affordable Care Act cannot be sacrificed. "Entitlement reform" cannot be a smokescreen for effectively dismantling the safety net for low-income and other vulnerable populations. Additional revenue of at least $1 trillion must be part of any final set of agreements (see this article by Robert Greenstein to learn more about a balanced approach moving forward).

We will all need to keep the pressure on the White House and on Congress in the weeks ahead. Working with our partners at the national, regional, and local levels, AIDS United will be fully engaged in protecting programs to end the HIV/AIDS epidemic, achieving meaningful health care reform, and preserving the social and economic safety net.




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