Faced with the reality that taxes are going up, either automatically or with their tacit assent, Republicans are hoping that they can bank an ideologically suitable down-payment on a broader deficit reduction package in the form of cuts to Medicare spending.
The problem is, unlike the Democrats’ calls for higher taxes on rich Americans, the GOP’s preferred Medicare cuts are deeply unpopular. So they’re trying to cow Democrats into proposing these cuts first — to effectively author both sides of the proposal — and provide them political cover.“We’ve come down with ours. We’re still waiting for theirs. That’s the status of the negotiations,” said Sen. Chuck Schumer (D-NY) in the Capitol Thursday, laughing off the GOP’s demand.
Though the expiration of the Bush tax cuts provides Democrats enough leverage to ignore the GOP’s demand for Medicare cuts altogether, conversations with Senate Democratic aides reveal Democrats will accede to some modest spending reductions up front, so that Republicans will agree to simultaneously increase the debt ceiling and avoid another economically damaging standoff early next year.
Complicating matters for the GOP is the paradox that it’s easier, both politically and legislatively, to realize savings in Medicare by making the program more robust. Democrats are prepared push those sorts of reforms in 2013 when the two sides set about seeking a broader package of entitlement and tax reforms. In contrast, the Republican aim in these budget negotiations is to forge ahead with proposals designed to weaken the program, not to reduce spending on Medicare per se.
A November report (PDF) by the Center for American Progress — a liberal Washington think tank — includes a series of measures that, taken together, would save $385 billion over 10 years, without directly targeting seniors’ benefits. The report is silent on other policy measures, such as allowing working-age Americans to buy into Medicare, which could save tens of billions more. But it’s one resource Democrats are turning to as they look ahead past the first of the year to broader budget negotiations that will dominate the legislative process in 2013.