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Last week, the White House announced President Obama’s recess appointment of Donald Berwick as CMS Administrator. Dr. Berwick is a pediatrician and professor at Harvard University and the founder the Institute for Healthcare Improvement. He launched the“100,000 Lives” campaign to reduce the number of deaths attributable to medical errors in hospitals. He has previously served as Vice Chair of the U.S. Preventive Task Force, member of the Board of Trustees of the American Hospital Association, Chair of the National Advisory Council of AHRQ. Dr. Berwick was sworn in on July 12.   

The Constitution provides an exception to the Senate confirmation process for nominations. When the Senate is in recess, the President may make a temporary appointment known as a “recess appointment” without Senate approval. President Obama is making the appointment during a recess in the middle of a session, so Dr. Berwick’s appointment will expire at the end of the following session or at the end of the first session of the 112^th Congress. President Obama has made 15 recess appointments, not including Donald Berwick.

Senate Minority Leader Mitch McConnell, along with Republican Senators John Barrasso, Pat Roberts and Tom Coburn have objected to President Obama’s move noting that confirmation hearings had not been scheduled to allow for consideration of the nominee. Senate Finance Committee staff have responded to the announcement noting that Republicans have urged Leadership to expedite Dr. Berwick’s confirmation hearing and hold his hearing before Supreme Court Justice nominee Elena Kagan’s hearing.    

Republicans on the Senate Finance Committee sent a letter to Chairman Baucus requesting a hearing on the appointment of Dr. Berwick. The letter requests a chance for Dr. Berwick “to present his qualifications for the position in the usual process” so as not to create “a shadow over his legitimacy and authority to serve as Administrator during a critical time for CMS.”  Republican members of the House Ways and Means Committee also urged a hearing with Dr. Berwick.

The Office of Management and Director Peter Orszag has announced that his last day at his post will be July 30.  President Obama announced that he will appoint Jack Lew as the new OMB Director. Mr. Lew currently serves as an aide to Secretary of State Hillary Clinton and previously worked as the budget director for former President Bill Clinton. Given the current budget deficit, the new OMB Director will certainly continue the focus on reducing the deficit.         

The Chairmen of the National Commission on Fiscal Responsibility, former Republican Senator Alan Simpson of Wyoming and Erskin Bowles, former chief of staff to President Bill Clinton, spoke to the National Governor’s Association and relayed that Congress must examine any and all proposals to contain entitlement programs, particularly Medicare and Medicaid. The Commission is required to develop a plan by December 1 to reduce the deficit. 

Prior to the August recess, the Senate is expected to consider the “Small Business Lending Fund Act” (H.R. 5297), which was introduced by Rep. Barney Frank (D-MA) to address the impact of the financial crisis on small businesses. The Senate will also consider the House-amended war supplementing spending bill before it adjourns. The House amended the Senate-passed bill to include Senator Herb Kohl’s (D-WI) legislation, the “Preserve Access to Affordable Generics Act,” which would ban agreements between brand name and generic drug manufacturers. Senator Kohl has called such agreements “one of the most egregious tactics used to keep generic competitors off the market leaving consumers with unnecessarily high drug prices.” The Generic Pharmaceutical Association, however, expressed opposition to the amendment noting that such agreements have, at times, allowed generic drugs to come to market before the patents of the name brand drugs expire.

Peter Orszag, Director of the Office of Management and Budget (OMB), and Rahm Emanuel, White House Chief of Staff, issued a memorandum and guidance to federal agencies directing them to craft a plan to cut their budgets by 5 percent. Dr. Orszag explained in a speech to the Center for American Progress that agencies should identify “their bottom 5 percent performing discretionary programs, as measured by their impact in furthering the agency’s mission.”

The memorandum directs agencies to identify of the programs in the bottom 5 percent in their Fiscal Year 2012 budget requests, which are due to OMB on September 13.  Agencies must include an explanation for why the program is among the lowest performance as it relates to the impact on the agency’s mission, strategic plan, and the President’s initiatives. The memorandum encouraged agencies to identify entire programs to be cut or propose substantial spending reductions that amount to at least 50 percent of a program or subprogram’s budget. 

The guidance document restated President Obama’s pledge to freeze overall discretionary spending through Fiscal Year 2013. Agencies were directed to identify in their budget requests “at least five significant terminations, reductions, and administrative savings initiatives that reduce costs below FY 2011 Budget levels.”  Agencies must provide an in-depth analysis for any programmatic request above FY 2011 levels.   

A Washington Post article reports that President Obama will seek authority to allow the agencies to retain a portion of the savings that they identify. The article notes that the Obama Administration plans to announce additional measures in the coming days designed to reduce fraud and abuse.