When the Center for American Progress recently pointed to some potential savings from entitlement programs, the political implications were more important than the numbers.
The left-of-center group’s entry into the battle over entitlement spending provided some political cover that could allow more Democratic lawmakers to support a deficit reduction compromise including savings from programs they have long defended with their political lives — Medicare, Medicaid and perhaps Social Security.
The report said Congress could reduce the cost of health care for seniors by $385 billion over 10 years by picking up some proposals that were either discussed during the 2011 debt limit standoff or included in President Barack Obama’s fiscal 2013 budget proposal — things such as higher premiums for upper-income Medicare beneficiaries and cuts in Medicare payments to hospitals and nursing facilities.
Many Democrats have sought to put the major entitlements off limits during deficit negotiations. But with automatic, across-the-board spending cuts scheduled to begin next year unless Congress and Obama change the law, liberals are starting to accept the inevitability of trimming the cost of entitlements as part of the “balanced” deficit agreement the president is demanding.
And just as Republicans may be looking for a nod from their key political supporters before they accept the tax component of such a compromise, Democrats are looking to the backers of entitlement programs for spending reductions that might be viewed as the least objectionable.
Although the partisan split over tax policy has dominated the public debate over how to avoid the fiscal cliff of tax increases and spending cuts due to begin Jan. 1, an agreement on entitlements may be more difficult to achieve.
In the wake of Obama’s re-election, Republican leaders have opened the door to accepting additional tax revenue as part of a grand bargain, but only if Democrats agree to reduce the projected growth of spending on Medicare and Medicaid.
Paul Van de Water, senior fellow at the liberal Center on Budget and Policy Priorities, said most Democrats will accept some changes in entitlement programs, provided Republicans go along with substantial revenue increases. “But it’s going to be a tricky balancing act,” he said.
While Obama has said he recognizes a need to do more to slow the growth of the cost of federal health care programs, House and Senate Democrats remain divided over changes to Medicare, Medicaid and Social Security.