Democrats signaled on Friday that they are willing to bring Medicare to the table in talks to raise the nation’s debt limit.
Negotiations between Vice President Joe Biden and a group of bipartisan lawmakers faltered after the Republican members, House Majority Leader Eric Cantor (R-Va.) and Sen. Jon Kyl (R-Ariz.), walked out of the negotiations on Thursday. The Republican lawmakers said they would not come back to the table until Democrats were willing to end talks of tax increases; however, Democrats have said any reasonable approach to fixing the nation’s growing debt and deficits would have to be balanced and include raising revenues on top of spending cuts.
Republicans have proposed those cuts come from various programs including entitlement programs such as Medicare and Medicaid. Democrats have been staunchly against any cuts to those two programs and Social Security, but on Friday they said they would be willing to accept some cuts to Medicare to keep the negotiations moving forward and avoid the United States defaulting on its loan obligations.
However, unlike the Republicans’ proposal to make cuts to Medicare benefits, Democrats proposed making cuts on the provider side of the entitlement program. Sen. Chuck Schumer (D-N.Y.) and Rep. Chris Van Hollen (D-Md.), the two Democratic representatives in the debt negotiations with Vice President Biden, said they would be willing to look at the “delivery system reform” of Medicare, which would change the way providers were paid.
“There are three approaches: One is the Republican approach to end Medicare as we know it, transfer it all to insurance companies, which will not reduce costs, it will simply shift costs to beneficiaries,” Schumer said in a conference call with reporters. “Second is to do nothing. We reject both of those. We believe that Medicare provides very good health care but it does it inefficiently. The way to bring savings out of Medicare while at the same time preserving the benefits is to make it more efficient in terms of the delivery system.”
To do that, Schumer and Van Hollen said Democrats would call for implementing more information technology and putting more emphasis on prevention, for example.
Both Democrats also insisted that the only way a deal would pass would be with Democratic support so Republicans needed to realize they would have to give up some things they wanted and allow for some things Democrats wanted. Any final bill, though, would have to occur by Aug. 2 – the date Treasury Secretary Timothy Geithner said the government would start defaulting on its loans.
“They need Democrats to get a deal passed, and that means the final deal will have to include some Democratic priorities,” Schumer said. “Thus, it will have some messy realities for Republicans.”
“Until the Republicans are more worried about reducing the deficit than they are about Grover Norquist, then we’ve got a problem,” Van Hollen said. “Every serious solution to this issue requires a balance.”
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