Medicare Threatens to Derail Debt Ceiling, Budget Negotiations as Dems, GOP Dig In

Neither party is willing to budge from its policy position.

June 1, 2011— -- Medicare has quickly become the chief issue of contention in budget negotiations that could derail talks on raising the U.S. debt ceiling and send the country spiraling into default.

Republicans charge that Democrats are simply demagoging the issue as a political ploy for the 2012 elections without proposing a concrete plan of their own.

"I just said we got to take on this debt and if we demagogue each other at the leadership level then we're never going to take on our debt," Rep. Paul Ryan, R-Wis., said of today's House Republicans' meeting with President Obama, adding that his Medicare proposal has been "mis-described" by the president and Democrats as a "voucher" plan that would strip the elderly of their health care.

But Democrats are standing steadfast, and argue that they will not agree to overhauling Medicare the way the House Budget Committee chairman has proposed in his 2012 budget plan.

"We just will not entertain a privatization of Medicare or the end of Medicare. It is non-negotiable for us," Democratic Congressional Campaign Committee chair Steve Israel of New York told reporters at a Christian Science Monitor breakfast today.

"The president will not negotiate the end of Medicare. That's the line we drew," he added. "And I don't think that we're going to be posed with a president who says I agree with the Republican plan to terminate [seniors' health care benefits]... and turn it into an insurance company voucher."

Under Ryan's plan, new Medicare beneficiaries in 2022 would be subsidized for their plans instead of having the federal government pay for each service, as is the case currently. The allotment would be based on income.

Americans haven't quite warmed up to the idea yet, polls show.

A CNN/Opinion Research Corporation survey released today found that 58 percent of Americans oppose Ryan's Medicare plan, while only 35 percent support it. Of those polled, 56 percent thought the Republican plan would be bad for senior citizens.

In an ABC News poll released in April, 65 percent of Americans said they opposed changing Medicare to a system in which the government would give older Americans vouchers with which to buy private insurance. Republicans deny that theirs is a voucher-based system.

A poll that month by the Kaiser Family Foundation found that seniors prefer to keep the current system by a margin of 2-to-1. An analysis by the group found that under Ryan's proposal, a typical 65-year-old retiring in 2022 would be expected to devote nearly half of his or her monthly Social Security check toward health care costs, more than double what a retiree spends under current Medicare law.

Democrats have seized on such numbers, saying their candidate's historic win in New York's 26th district last month is an indication that Americans have rejected Republicans' Medicare plan.

The independents that brought Republicans to power in the House in 2010 "have a deep sense of buyer's remorse and they're coming back to us," Israel said today.

Conservatives, however, argue that their plan is needed to overhaul a broken system that, if it's not fixed today, will harm all Americans. The reason it's not selling, they argue, is not because Americans haven't bought into it but because Democrats have mischaracterized it.

Taking lessons from their surprising defeat in NY-26, Republicans have upped their strategy to sell the plan to the public.

Conservative grassroots group FreedomWorks, which works closely with many Tea Party groups on the ground, held a meeting last month to provide tips to freshmen House members and their communications staff on how to explain the Medicare proposal to their constituents, as first reported by the Huffington Post.

'Democrats Just Demagogue' Medicare

Similar meetings will be held monthly, the group's spokesman Adam Brandon said, and other powerful conservative groups are taking similar steps.

"The fight is on. You can't run from it. If you're going to be serious about tackling the debt and the deficit, you have got to explain your position and show that this is actually the better policy position for the United States, for seniors, for young people," Brandon said.

"Where's the president's plan? Where's the Democrats' plan? Everyone's criticizing the Ryan plan. You can't have a negotiation or a discussion if only one person's presenting a plan," Brandon added. "What I'm hearing is the Democrats' plan is, we're going to roll this into the next election and just demagogue it. ... I don't think they are being very serious about this."

Budget negotiations and spending cuts are a key part of the debt-ceiling negotiations that are underway. Republicans say they will not raise the debt ceiling without meaningful cuts. As a signal of their resolve, GOP members voted overwhelmingly against their own bill that would have increased the statutory debt limit without any conditions attached.

Treasury Secretary Timothy Geithner has said he can stave off a default until Aug. 2, but has warned of an impending fiscal crisis if the limit isn't raised by then. The debt ceiling would need to be raised by roughly $2 trillion.