WASHINGTON — President Barack Obama’s budget director said Monday that the president’s new deficit reduction plan would impose “a lot of pain,” and that is clearly true of White House proposals to cut $320 billion from projected spending on Medicare and Medicaid in the coming decade.
Obama proposed higher premiums and deductibles for many Medicare beneficiaries and lower Medicare payments to teaching hospitals and rural hospitals. He would start charging co-payments to frail homebound older people who receive home health services, and he would reduce the growth of federal payments to states for treating low-income people under Medicaid.
The White House said Obama’s proposals would cut $248 billion from the projected growth of Medicare in the next 10 years, while shaving $72 billion from Medicaid and other health programs. A large share of the Medicare savings would, in effect, be used to pay doctors, who would otherwise face deep cuts in the fees they receive for treating Medicare patients.
The proposals are part of a package to reduce deficits by more than $3 trillion over 10 years, beyond the $1 trillion in savings already assumed under the debt limit law that Obama signed in early August. The package includes tax changes intended to raise $1.5 trillion in revenue over 10 years.
Obama would also allow the United States Postal Service to cut its losses by ending Saturday mail delivery. He would reduce farm subsidies by $31 billion over 10 years, require federal employees to contribute more to their pension plans, force military retirees to pay more for prescription drugs and charge higher fees to air travelers for “aviation security.”
Jacob J. Lew, director of the Office of Management and Budget, rejected suggestions that the White House was going after rich people.
“If you look at the details of what’s in the plan that the president is sending to the Congress,” Lew said, “there is a lot of pain, and it’s spread — it’s spread broadly and we think fairly.”
Medicare and Medicaid insure more than 100 million people and account for nearly one-fourth of all federal spending. The proposed savings, which provoked predictable protests from health care providers, represent less than 3 percent of what the government expects to spend on the programs in the next 10 years.
Speaking in the Rose Garden on Monday, Obama said his plan — in the form of recommendations to a bipartisan congressional committee on deficit reduction — “includes structural reforms to reduce the cost of health care in programs like Medicare and Medicaid.”