Why Are Budget-Shrinkers in the GOP Shrinking from Entitlement Reform?

Republicans say they want to reign in federal spending. So why won't they back Obama's efforts to trim the cost of Medicare?


In a disaster for budget reformers, House Republicans are set to kill a health-care measure that would reign in Medicare costs.

The House of Representatives took a step towards repealing one of the most controversial parts of President Obama's health-care law on Wednesday when the Health Subcommittee on Energy and Commerce voted to move forward with a repeal of the Independent Payment Advisory Board (IPAB). This particular provision has long been a target of disdain for Republicans, who have criticized the board's lack of accountability and potentially severe approach to Medicare cuts. This may seem strange to those following health-care reform debates -- it's exactly the same criticism that Democrats have levied against some Republican reform plans, including ones put forward by Rep. Paul Ryan and Sen. Tom Coburn. What gives?

There's a simple answer that explains most of what happens on Capitol Hill: political posturing. The GOP incoherence on Medicare reform was perfectly captured by Mitt Romney recently when he said President Obama's budget wouldn't "take any meaningful steps toward solving our entitlement crisis" and in the same breath criticized the president for being "the only president in modern history to cut Medicare benefits for seniors." Protecting Medicare now and in the future is a vote-moving issue for the older demographics, and posing as a staunch defender of Medicare yields electoral benefits. It's been a winning issue for both Republicans and Democrats for years.

But Medicare benefits for seniors are going to have to be cut in any meaningful reform plan, and IPAB, however imperfect, is a vehicle for doing so. That's not to say there aren't legitimate criticisms to be made of the board. Its cost-control targets are very, very aggressive -- so much so they are unlikely to be met -- and any savings it finds will largely put towards new health-care spending in other areas. The accountability of the board -- after Senate confirmation, its members will serve long terms and their recommendations will be difficult to override -- could be a concern. And certain provisions prevent the board from even touching large parts of Medicare spending.

These are reasons to reform IPAB, not repeal it outright. Politics aside, a successful IPAB would put the U.S. on a healthier fiscal path and help politicians make difficult choices on the life-and-death decisions that loom over Medicare reform. It's imperfect, sure, but it's workable, and it's an improvement on the status quo. The real worry is not that IPAB will cut Medicare payments and benefits, but that it won't.

Compromise hasn't been at the core of the last few Congresses, though. Obamacare's popularity has been middling amongst the general public and anything related to the legislation, however tangentially, fires up the conservative base. IPAB repeal is the latest conservative bugaboo in a line that has included IRS reporting requirements (which required small businesses to file an IRS form every time they did more than $600 worth of business) and the CLASS Act (a long-term care program that, put simply, was unsustainable at the outset).

For Republicans running for re-election, there's little that makes for a better stump speech than IPAB. The commercials practically write themselves: President Obama passed a health-care law that allows unelected bureaucrats to cut Medicare for vulnerable seniors with little to no oversight. The Heritage Foundation adopted the language that the board "ends Medicare as we know it." Rep. Paul Ryan, the GOP's health-care superstar, has attacked the board as a form of rationing that would "disrupt the lives of those currently in retirement and lead to waiting lists."

This is especially surprising given the political risks that Republicans have taken in pushing their own Medicare reforms. Rep. Ryan has been a one-man reform machine, working with Republicans, Democrats and on his own to put forward no fewer than three different Medicare reform plans that have very aggressive cost-cutting goals that will lead to cuts in payments if ever enacted. He (like Republicans who have supported him) has taken hits from Democrats in the media for -- you guessed it -- cutting benefits for vulnerable seniors.

A legitimate policy disagreement can be found in the details of all this posturing. IPAB is a top-down approach to cutting Medicare that conservatives are worried won't work and, by its very existence, will cement an over-promised entitlement into the government budget for longer than is necessary. Democrats have expressed concern because they fear a centerpiece of the liberal project would be changed unnecessarily, as they think Medicare only requires tweaks and aggressive cost targets.

Repeal of IPAB now moves forward and, Republicans hope, will end up on the president's desk. No matter what happens at that point, they will have accomplished their goal. President Obama will be forced to defend an unpopular measure that cuts money allocated to a key voting demographic or yield to the Republican crusade against Obamacare. And Republicans will be only too happy to ride that wave to a short-term electoral victory, entitlement reform be damned.

Image credit: REUTERS/Brian Snyder