Analysts expect debt-ceiling pact to be reached by Aug. 2
Analysts at equity research firm Oppenheimer & Co. say they believe a debtceiling agreement could be reached by Aug. 2, and they expect a final deal to include up to $150 billion in cuts to federal health programs over the next 10 years. “We expect that tax increases in the form of closed loopholes and scaled-back subsidies to ethanol and oil companies will be exchanged for attenuated total cuts to federal health programs of roughly $100 billion to $150 billion over the next decade,” lead analyst Michael Wiederhorn and analysts Matt Nirenberg and Kinjal Bhatt wrote in a research note issued as President Barack Obama and congressional leaders entered the weekend with broad disagreements over the framework for a deal and plans to meet Sunday. The analysts also predict that the Medicaid maintenance-of-effort provision—introduced in the American Recovery and Reinvestment Act of 2009 and expanded in last year’s health law—will be repealed as an attachment to the resolution. Republican leaders in Congress introduced legislation this year to repeal the maintenance-of-effort provision. Minority Leader Nancy Pelosi said in a news conference after White House talks last week that House Democrats would not support Medicare cuts as part of a debtceiling deal.