Updated at on Aug. 25 at 3:48 p.m.
New figures include a budget assumption that almost聽never comes true: 聽The imposition of steep Medicare cuts for physicians.
The CBO’s new baseline projections of the federal budget find reason to be hopeful, estimating that聽cumulative deficits will reach $3.5 trillion聽between 2012 and 2021 — a much shallower budget hole than the $6.7 trillion CBO projected in聽March. But聽that estimate —聽provided by the agency so that Congressional budget planners can work from a common set of numbers — assumes that will go into place at the end of this year, since it is prescribed by current law.
Assuming Capitol Hill follows the past practice of stopping those scheduled cuts,聽 this fall lawmakers will not only be dealing with the debt deal鈥檚 鈥渟uper committee鈥 spending cuts 鈥 or lack thereof — but also be scrambling to find billions for another 鈥渄oc fix.鈥
鈥淎s the CBO report shows, it is impossible to look at the federal budget in any serious way without acknowledging the budget hole that has been created by the broken Medicare physician payment formula,鈥 AMA President Peter W. Carmel, M.D., wrote in an e-mail to KHN. 聽鈥淎s recently as 2005 the cost of permanent reform would have been $48 billion, but today it is estimated to be nearly $300 billion. If action is not taken now, the cost will continue to escalate to $500 billion in only a few short years.鈥
鈥淭he CBO report鈥檚 discussion of outlays and the deficit and debt underscore the steep hill leading to a permanent Medicare physician payment fix,鈥 said former American Medical Association lobbyist Julius W. Hobson Jr., now a senior policy advisor for the firm Polsinelli Shughart.
In its report CBO also notes that should the Medicare physician payment cuts and other budget assumptions, such as expiration at the end of 2012 of Bush-era tax cuts and President Obama鈥檚 stimulus package, not occur, 鈥渕uch larger deficits and much greater debt could result.鈥
