Proposed Cap on Federal Spending Would Force Cuts in Medicare, Medicaid, and Social Security

The Center on Budget and Policy Priorities (CBPP) recently released an analysis entitled, “Proposed Cap on Federal Spending Would Force Deep Cuts in Medicare, Medicaid, and Social Security Would Likely Require Radical Changes Such as Medicare Privatization, a Medicaid Block Grant, and Repeal of Health Reform.”  The analysis examines a proposal submitted by Senators Bob Corker (R-TN) and Claire McCaskill (D-MO) limiting federal spending to no more than 20.6 percent of the Gross Domestic Product.  If this federal spending cap is reached, CBPP determined that the Corker-McCaskill proposal would provide sweeping cuts to limit the gap between projected spending and the proposed cap.  Specifically, the analysis found that this proposal would result in estimated cuts of $1.3 trillion in Social Security, $856 billion in Medicare, and $547 billion in Medicaid from 2013 through 2021 (the first nine years that the cap is in effect).  
CBPP also noted that in order to stay below the spending cap, there would be even more substantial cuts and changes to these programs after 2021.  These include eliminating traditional Medicare, block-granting Medicaid, repealing major coverage provisions of the Patient Protection and Affordable Care Act that reduce the number of uninsured individuals (e.g., premium and cost sharing subsidies to purchase coverage in the health exchanges), and cutting Social Security benefits immediately and in the future.
The complete CBPP analysis can be found at:  www.cbpp.org/files/4-14-11bud.pdf.
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