Yesterday, the Budget Control Act of 2011 was signed into law preventing default on federal obligations by raising the nation's debt ceiling. The debt ceiling package represents months of negotiations that have been closely monitored by APTA to identify potential effects on the profession.
The law creates a 2-step process. The first step raises the debt ceiling by $900 billion through February. This initial increase is offset by a cap to discretionary spending for Fiscal Years 2012 and 2013. The cap does not include any new taxes or specific cuts to Medicare or Medicaid programs.
In step 2 of the process, a 12-member Joint Select Committee on Deficit Reduction, which will be appointed by leadership from both parties and chambers this month, will identify an additional $1.2 to $1.5 trillion in cuts by November 23—prompting a second round of debt ceiling increases. The future amount of the debt ceiling increase will be matched by the dollar amount of the cuts found by the committee. If a deal is not reached by the committee or passed by Congress by the end of the year, across-the-board cuts will be imposed to increase the debt ceiling in 2012. Social Security, Medicaid, Veterans’ benefits, and other programs will be exempt from these cuts.
APTA will continue to work with congressional leaders and relevant committees as the Joint Committee begins to map out additional deficit reduction measures this fall and closely monitor proposals to ensure best possible outcomes for the profession.