Chaos Rules Debt Debate as Default Deadline Approaches

President Obama and House Speaker Boehner took to the airwaves, separately, in primetime earlier this week to make their case to the American people on how to best raise the debt ceiling and get our long term deficits under control. The end result of the nearly 30 minutes of speeches was chaos; the two sides remain far apart in the month’s long standoff over raising the nations’ debt ceiling and there is no foreseeable path to compromise as the August 2nd deadline for default approaches.

After participating in negotiations with the White House on a “grand bargain” style agreement complete with spending cuts and revenue increases in the neighborhood of $4trillion, Speaker Boehner abruptly ended talks late last week and proceeded to map out his own path to raising the debt limit without tax increases through an incremental approach involving a series of votes to raise the debt limit over the next 18 months. The House was scheduled to vote on Boehner’s plan on Wednesday, but a scoring from the Congressional Budget Office caused Boehner to pull it from the debate calendar after it was revealed that the plan would only deliver around $850billion over 10 years in cuts rather than the $1.2trillion he had anticipated.

Step two of Boehner’s plan would involve the creation of a commission to study entitlement reform and provide a guaranteed vote on the recommendations of the commission in both the House and Senate. Senate Majority Leader Reid is also shopping a plan that would cut nearly $2.2trillion over 10 years and is considering a commission of his own to tackle entitlement reform. This new commission, in whatever form ends up passing, is where orthotics and prosthetics could see potential cuts to Medicare reimbursements, Medicaid formulas, etc.  Of course if a debt ceiling deal is not reached, programs like Medicare and Medicaid would likely not be able to continue paying their bills, i.e. reimbursements, for products like orthotics and prosthetics. 

Where do we currently stand? President Obama and Speaker Boehner have stated that a deal must be made to raise the debt limit to avoid defaulting on government obligations by August 2nd. Also on the table is a first ever downgrading of the AAA credit rating of the United States government which would create panic across the globe, cause skyrocketing interest rates for American consumers and slow, if not halt, the tenuous economic recovery. The House is likely to vote on their proposal Thursday or Friday; if Speaker Boehner is not able to muster the 217 votes needed for passage, a tall order considering many in his caucus are opposed to any vote to raise the debt ceiling, Senate Majority Leader Reid’s bill will be brought to a vote in the Senate.  The White House is also scrambling to create a deal that includes elements of both plans that could be negotiated and passed early next week to allow both sides to save face and avert default.

So, chaos reigns in the United States Capitol as Armageddon approaches. Orthotics and prosthetics are not on the chopping block yet, but we will continue to monitor the specifics of any entitlement reform commissions that develop as part of a final plan to avoid complete collapse of the full faith and credit of the United States.

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