President Biden's $1.9 trillion coronavirus relief bill could automatically trigger billions of dollars in cuts to Medicare and other federal programs, according to new findings published by the Congressional Budget Office.
In a letter to House Minority Leader Kevin McCarthy, the non-partisan agency estimated that Medicare would see a $36 billion cut, while up to $90 billion would be slashed from other spending programs.
That's because congressional Democrats are using a tactic known as budget reconciliation to muscle through the aid package using a simple majority, allowing them to avoid a Senate Republican filibuster.
But under the Pay-As-You-Go Act of 2010, known as PAYGO, new laws that increase the national debt automatically force offsetting cuts in other safety-net programs.
The cuts can be avoided if 60 senators declare the new outlays an emergency, meaning that Democrats would need to secure the support of at least 10 Republicans. It's unclear, however, whether GOP lawmakers will agree to do so after vehemently objecting to the nearly $2 trillion spending plan, which many have lambasted as a "liberal wish list."
A senior Democratic aide told Bloomberg News that lawmakers are looking at different ways to avoid the forced cuts, including possibly attaching a waiver to a future must-pass spending bill -- essentially forcing Republicans to either shut down the government or support the measure.
Medicare cuts are capped at 4% of the program's outlays under the PAYGO law. Other low-income programs, such as Social Security and Medicaid, are exempt.
PAYGO has repeatedly been waived by large bipartisan majorities to clear the way for spending increases and tax cuts. For instance, after Republicans passed the 2017 Tax Cuts and Jobs Act, the Senate voted 91-8 to prevent the tax overhaul from triggering cuts to Medicare and other programs.