Medicare Cuts Go on the Table in Debt Talks

Obama is willing to cut Medicare if Republicans consider tax hikes

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The White House is putting tens of billions of dollars in cuts to Medicare and Medicaid on the table as it negotiates with Republicans on cutting the federal deficit as part of a vote to raise the debt ceiling, The New York Times' Robert Pear reports. Democrats hope that Republicans will accept the entitlement cuts in exchange for increasing revenue. Before debt limit talks led by Vice President Joe Biden broke down almost two weeks ago, both sides had "reached substantial agreement" on cutting the programs.

Lobbyists are furiously pushing back against the proposals, Pear reports. They include eventually stopping reimbursement of hospitals when patients don't pay their share of their bills; shrinking payments to teaching hospitals for training doctors, taking care of the sickest patients, and providing specialized care; and cutting the portion of the cost of treating low-income people and kids that the federal government pays, putting a larger burden on the states.

Think Progress' Igor Volsky says the latter proposal "is possibly the most troubling of the three provisions" as it shifts the costs to states and patients. "As for the first two: the hospitals have launched a massive ad buy to forestall the cuts, but it’s difficult to feel much sympathy for providers who will see an increase of revenue as a result of the coverage provisions in the Affordable Care Act."

Change in Tone Do the concessions on entitlements mean a deal on the debt ceiling could be closer? Business Insider's Zeke Miller notes that on the Sunday talk shows over the weekend, Republican Sens. John McCain and John Cornyn indicated they would support some methods to increase government revenue, like eliminating tax subsidies.

Who Has the Upper Hand? NBC News' First Read observes that swing voters want a deal done, which helps the White House, but they don't want taxes raised, which helps Republicans. "Bottom line: Republicans believe that on the SUBSTANCE, the middle is with them (if they sell it properly), even if on PROCESS, the middle might be more on the side of the president." Republicans, First Read says, don't want to give Obama a victory, but they "can already be granted a measure of victory for dictating the terms of the debate--all about spending cuts."

Is a Deal Possible? The Washington Post's Ezra Klein says cutting "tax expenditures" gives Republicans "an out" so they can tell their base they're streamlining the tax code instead of raising taxes. "But there's little evidence, at least as of yet, that Republicans are going to take the deal--or even that they can take the deal. That raises the question of whether they've gotten here by being savvy, tough negotiators, or whether the reason they keep saying 'no' is that they've lost the ability to say 'yes.'"

No Choice But to Compromise But The New York Times' David Brooks argues that Republicans have to strike some kind of deal, otherwise "independents voters will see that Democrats were willing to compromise but Republicans were not. If responsible Republicans don’t take control, independents will conclude that Republican fanaticism caused this default. They will conclude that Republicans are not fit to govern."

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