Analysis: Parties Maneuvering on Debt and Medicare

President Barack Obama has lunch with Toledo Mayor Michael Bell at Rudy's Hot Dog in Toledo, Ohio, June 3. (Official White House Photo by Pete Souza)

 

 WASHINGTON (AP) -- The threat of a first-ever default by the federal government is pushing President Barack Obama and Republicans toward a sweeping agreement to cut government spending and increase the Treasury's borrowing authority. Yet a perennial partisan struggle over Medicare drives them apart.

Remarkably, the two sides seem determined to pursue both accord and discord simultaneously, sparing the still-wobbling economy from threatened calamity while preserving Medicare as a political issue in the 2012 elections.

"I'm willing. I'm ready. It is time to have the conversation" about deficit cuts and the debt limit, said House Speaker John Boehner, urging Obama to become personally involved. "It is time to play large ball, not small ball."

But a few days later, House Democratic leader Rep. Nancy Pelosi of California said, "I could never support any arrangement that reduced benefits for Medicare. Absolutely not," she told CBS' "Face The Nation," emphasizing a position she and other Democrats had laid out at their own meeting with Obama.

Given the sheer size of Medicare, nearly $500 billion a year, any deal on reducing future deficits is likely to include savings from the program, if not the benefit cuts many Democrats oppose.

But if any Republican thought that the White House and congressional Democrats might agree to even a temporary cease-fire on Medicare, they may want to reconsider.

Boehner, R-Ohio, and fellow House Republicans had scarcely left a White House meeting with Obama on Wednesday when presidential press secretary Jay Carney told reporters that Obama "doesn't believe that we need to end Medicare as we know it, to dismantle the program as it currently exists, in order to achieve significant deficit reduction."

Within seconds, he said the Republican plan for Medicare "puts too much of the burden of deficit reduction on the shoulders of seniors, of low- income children and the disabled. And the president just feels that that's unacceptable."

A few moments later, Carney hit a trifecta of sorts, calling the Republican plan "premium support or privatization or voucherization."

None of these can be considered terms of endearment, politically, particularly not by Republicans. They say their Medicare plan, developed by Rep. Paul Ryan, R-Wis., is designed to save the program from bankruptcy and preserve it for future generations.

In the meeting the president hosted for rank-and-file Republicans, Ryan and Obama clashed.

The congressman told Obama it was not leadership to demagogue a good-faith attempt to save Medicare, when it is clear the program is headed for bankruptcy, according to several participants in the session.

Obama replied it wasn't leadership to shift billions in costs from the federal government to states and individuals who can't afford it.

Ryan responded that wasn't what his plan did, explained it in some detail and drew an ovation from fellow Republicans.

The plan retains Medicare in its present form for current beneficiaries and those age 55 and older.

For anyone younger, Medicare would consist of a government-mandated package of benefits, purchased on the open market from private insurers. Federal funds would help defray the costs for beneficiaries.

Polls and recent events such as the unexpected loss of a House seat in upstate New York and criticism from GOP president contender Newt Gingrich make clear that the Republican plan is not favorable political terrain for the party.

They are on far safer turf, they concede, when they stress that job creation is their top goal and spending cuts the surest way to achieve it.

Even some House Democrats who once talked of wanting to allow more government borrowing without taking steps to rein in future spending voted against legislation last week to do precisely that.

Republicans presented the bill as something Obama had asked for, but the House Democrats' second-in-command, Rep, Steny Hoyer of Maryland, called it a "demagogic vote" designed to render his rank and file vulnerable to campaign attack ads.

His comments underscore how much the Republicans have succeeded in casting the political debate since they were sworn into office in January and took control of the House.

If anything, the announcement from Moody's Investors Services that it might downgrade the U.S. debt, followed by a report showing an increase in unemployment, helped Republicans who are eager to put the Medicare debate aside.

"If we don't get our fiscal house in order, the markets will do it for us," Boehner said Friday.

Treasury Secretary Tim Geithner put it slightly differently after meeting with first-term House members, most of them Republicans who are determined to cut spending.

"I'm confident two things are going to happen this summer," he said. "One is we're going to avoid a default crisis, and we're going to reach agreement on our long-term fiscal plan."

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EDITOR'S NOTE - David Espo covers Congress for The Associated Press.