Why Republican Medicare Strategy Just Might Work in Long Run
Alex M. Parker

June 8, 2011

A deal with Democrats could swing the momentum the other way

After a demoralizing loss in the special congressional election in New York, Republicans are admitting that the Medicare issue is hurting them at the polls. Since House Republicans overwhelmingly voted in favor of Wisconsin Republican Rep. Paul Ryan 's plan to change Medicare into a voucher-based private system, Democrats have hammered them for trying to gut Medicare, and the attacks are working. But for Republicans, there's no going back. They'll have to stand by their votes and continue to push for the plan. And that just might work to win back public sentiment on the issue.

With Republicans unanimously behind Ryan's budget plan, the GOP still has a little bit of leverage to demand some sort of Medicare cost-cutting as part of a compromise to raise the debt ceiling, and Senate Minority Leader Mitch McConnell is demanding that Democrats agree to do just that. If they manage to work out a deal on the issue as negotiations continue over the summer, it would complicate the Democrats' message and give the Republicans some bipartisan cover to explain their votes. It also may be the last chance to truly deal with Medicare spending, which budget experts say will become the biggest source of long-term federal debt. But working out a deal with Democrats won't be easy, especially now that they've gotten some momentum on the Medicare issue. "Republicans are looking for some way of reducing their political exposure here, and so they would like to get some agreement on Medicare savings," says Thomas Mann, a political expert at the Brookings Institution. "But Democrats will almost certainly not agree to that, without Republicans agreeing to some tax revenue increase. So, my guess is they won't do much with it."

Both parties are still looking at Medicare reforms as part of a deficit-reduction measure. In a briefing with reporters, House Minority Whip Steny Hoyer said that Medicare reforms are still "on the table." House Majority Leader Nancy Pelosi also threw out a few ideas for how to trim Medicare costs, including allowing the program to negotiate over drug prices and cutting down on medical fraud. Yet, all but five Republican senators supported Ryan's plan when pushed to a vote by Democrats eager to embarrass them, with one Republican senator objecting that it didn't go far enough. (It was defeated, 40-57.) Earlier this month, the so-called Gang of Six senators seeking a bipartisan debt compromise lost one of its Republican members over rancorous discussions on Medicare spending.

There are plenty of ideas out there about how to cut Medicare's costs in the future. President Obama proposed beefing up some of the provisions of the Affordable Care Act, including an oversight board that rates the efficiency of Medicare procedures. The president's fiscal commission included some relatively modest Medicare savings, including freezing and slowly cutting doctor reimbursement rates and changing or eliminating its long-term care insurance program. A second commission, cochaired by former Clinton Budget Director Alice Rivlin and former New Mexico Republican Sen. Pete Domenici, also created a voucher-based premium support system, but only as an optional alternative to the regular Medicare, not as a replacement. What will be difficult is finding a Medicare savings compromise which is palatable to Democrats, but also satisfies Republican promises to trim trillions of dollars off future spending. "I'm not sure how you stay in traditional Medicare and make the kind of cuts they're looking for," says Michael Tanner, a political analyst with the libertarian Cato Institute.

For Republicans, the Ryan plan has been a tough lesson in the difference between campaigning and governing -- one that Democrats learned all too well after the healthcare reform law lead to electoral defeats in 2010. Ryan had announced his plan before the midterm elections, but few Republicans went near it, focusing their campaigns on the record of the Obama administration. That worked as a campaign for an out-of-power party, but now that Republicans have partial control of Congress, they have their own plans to defend. By sticking with a tough stance on Medicare reform, the GOP was likely hoping that they could keep their party unified and force greater policy concessions out of the White House. That worked with the 2011 budget negotiations, when Republicans held their caucus together by upping the ante on budget cuts after their initial proposal nearly provoked a revolt from ultra-conservative members.

But funding levels are an abstract concept. Even as Democrats tried their best to tie them to popular programs, the Republicans' billions in proposed cuts provoked little voter anger. But Medicare is a vast program which almost every voter has used or experienced through a family member. Politicians tinker with it at their peril, as both Democrats and Republicans have learned in the past few years.

For now, Republicans are hoping that an improved sales pitch will turn the tide yet again on the Medicare issue, emphasizing that without changes the program could be bankrupt within 15 years. "I haven't seen a whole lot of competence in pushing this so far," Tanner says. "Instead of debating competing proposals, they're debating utopia. They're debating Medicare going on forever with no cuts, versus the Republicans wanting to cut Medicare. That's a hard argument to win."

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