CBO: Automatic Medicare cuts would save $123 billion

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CBO also said that without the 2 percent cap on Medicare cuts, the program would have accounted for $256 billion in total savings. Because of the 2 percent limit, CBO estimated, Medicare savings will add up to $123 billion and the difference will be taken from other federal programs.

CBO noted in its report that the estimates are “subject to a considerable degree of uncertainty.” The White House budget office would formally implement cuts mandated by the trigger.

Healthcare interests are divided over the supercommittee and the trigger mechanism. Some industries and stakeholders are deeply afraid of across-the-board cuts. Others, though, could fare better under the trigger. The supercommittee could cut some sectors by more than 2 percent, and it also has the power to find savings in Medicaid and the Children’s Health Insurance Program. Both are exempt from the trigger.