The recent debt ceiling increase agreement by Congress calls for a two-step increase in the debt limit balanced with two rounds of corresponding spending cuts—producing a total of $2.4 trillion reductions in spending over the next decade.
Taking effect immediately, the debt ceiling will increase $900 billion and will be matched with $1 trillion worth of cuts from discretionary spending. By November 23, 2011, a newly established Joint Committee on Deficit Reductions will present recommendations to Congress on how to reduce the deficit by at least another $1.2 trillion. Congress will then have until December 23, 2011, to either pass or reject the committee recommendations. It should be noted that no amendments will be allowed during debate of the committee's recommendations. During this time, the debt ceiling will increase a second time—up to $1.5 trillion—whether Congress acts on the committee's recommendations or not. It is at this point in the process where payments to Medicare could be affected:
The debt ceiling agreement also will affect graduate medical education, specifically changes to the graduate and professional student loan programs. In a nutshell, medical students will have to start paying the interest on their subsidized graduate loans earlier. Up until now, the government paid the interest on the subsidized loan until six months after graduation. In addition, repayment incentives that rewarded on-time 12-months loan payments are eliminated. Both changes take effect on July 1, 2012. Although, a large portion of money saved this way will go toward supporting Pell Grants (funding for poor college students), these student loan cuts will increase education costs for future neurologists.