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Congress Approves One-Year Extension of Sequestration Cuts for Mandatory Spending Programs

Both the House and the Senate approved legislation last week (February 11) that would reverse changes to military retirement benefits that were enacted late last year. This bill, S. 25, was approved by a vote of 326 to 90 in the House and by a vote of 95 to 3 in the Senate. The President signed this bill into law on Saturday.

The costs associated with this bill are offset with a one-year extension, through fiscal year 2024, of the sequestration cuts that currently apply to certain mandatory spending programs (including Medicare) under the Budget Control Act of 2011. Senate Democrats, including Senate Majority Leader Harry Reid (D-NV), expressed serious concerns about extending the sequestration cuts as an approach to offsetting the cost of this legislation. However, they ultimately decided to pass the bill without amending it, to ensure a quick resolution of concerns that have been raised about changes made to military pensions by the Bipartisan Budget Act of 2013.

The bill also directs the HHS Secretary to establish a “Transitional Fund for Sustainable Growth Rate (SGR) Reform” through which $2.3 billion would be made available for SGR reform legislation. (The full cost of permanent SGR reform is in the range of $120 billion to $150 billion over ten years.)

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