Will Republicans Cut Medicare? A Paradox.

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JONATHAN COHN NOVEMBER 10, 2010

Will Republicans Cut Medicare? A Paradox.

Yesterday I wrote that the impending collision between the Republican Party's newfound interest in fiscal discipline and public support for the government programs from which major savings can be derived might well produce a "great pivot" in the country's political climate.

The example of this dilemma that is likely to emerge first (aside from symbolic skirmishing over the public debt limit) involves Medicare. For one thing, Republicans are almost certain to go along with action during the lame-duck session to extend the so-called "Medicare doc fix," a regular overriding by Congress of reduced reimbursement rates for providers, which runs out on December 1. This is the federal spending gusher that Senator-elect Rand Paul notoriously supports.

But even more importantly, Republicans are irreversibly pledged to eliminate the "Medicare cuts" contained in last year's health reform bill; indeed, it is very likely this will be the first step in the GOP's campaign to repeal the whole package. This is a very expensive proposition, since the reform bill provided for $400 billion in reduced Medicare spending over the next ten years. Some of those savings reflect an assumed reduction in medical inflation attributable to the entire reform package, but having demagogued about Medicare cuts, Republicans are not in any position to acknowledge that. And they are honor-bound to demand the restoration of the Medicare Advantage program, a privately administerered option insisted upon by the Bush administration which costs a lot more than traditional Medicare, and to scrap the provisions linking reimbursement rates to effective medical practices; these are the real "Medicare cuts" at issue.

Where's the money going to come from? Nobody seems to know, since Republican spending plans are invariably described in vague terms like restoring federal outlays to 2008 levels, which is a goal, not a plan. It's very unlikely Republicans can come up with anything like the funds they need for their Medicare promises via nondefense discretionary spending cuts, and as for defense spending, most Republicans want that number to go up (if only for a new missile defense commitment, though many GOPers want more troops in Afghanistan, and more than a few are panting for war with Iran and perhaps North Korea). And then there is the complication that Republicans may well win their fight for a total extension of the Bush tax cuts, which will inflate budget deficits even more.

In all likelihood, Republicans will get through the short-term Medicare dilemma easily enough, counting on President Obama to veto health reform repeal legislation, and issuing more vague promises of offsetting spending cuts (they don't have to enact a budget resolution in the House until next Spring). Eventually, though, they will have to take one of three paths: (1) backing off their fiscal promises, as they did during the Bush years, which would produce a justifiable revolt from the party's Tea Party faction; (2) proposing their own Medicare cuts in a form that can be defended as something other than cuts; and (3) just going all out with the proposition that government spending for seniors is privileged, and waging generational and class warfare against similar spending categories like Medicaid.

Option number 2 is already on the table in the form of Rep. Paul Ryan's "road map" proposal to voucherize Medicare benefits, a massive change in the program that would only produce savings if effective benefits decline. It's notable that Republican leaders in Washington, and Republican candidates around the country, started backing away from Ryan's "road map" before its ink was dry; Ryan's stuff is only useful as a symbolic indicator of GOP seriousness about federal spending, not as an actual plan.

Option number 3 is where I'd put my money right now. Medicare beneficiaries are the very core of the GOP's political base at present; Medicaid beneficiaries decidedly are not. Moreover, as I argued last year, for all the pundit hilarity about people receiving socialized health insurance via Medicare railing against socialized health insurance, many of these folk think of their coverage as an earned benefit, not as any form of government largesse. So there's nothing inherently implausible politically about the GOP just flatly defending Medicare (and for that matter, Social Security) while going after the lazy welfare bums under the age of 65. Some of you may have read Tom Edsall's recent dark vision of an impending era of scarcity wherein politics is dominated by generational and class battles over who gets what from government. Thanks to the central position of older white voters in the GOP, and of Medicare in the federal budget, this nasty scenario could arrive a lot faster than even Edsall has imagined.

[Cross-posted at The Democratic Strategist.]

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posted in: jonathan cohn, ed kilgore, politics, medicare, republican party

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