It looks like massive cuts to Medicare won't be in the offing in budget negotiations (though benefit cuts could still be considered), Republican, and possibly some Democratic, sights have been on Medicaid as a bargaining chip. David Dayen writes about this possibility, since Sen. Kent Conrad has floated the idea that the budget bill would be passed by reconciliation.
Reconciliation, a provision of the 1974 Budget Act, allows Congress to change key elements of the budget as an adjunct to the normal legislative process. The process offers a fast track for spending or tax deals by avoiding procedural hurdles such as the filibuster in the Senate; debate is limited to 20 hours, and a reconciliation bill only needs a bare majority to pass. In both 1990 and 1997, Congress used reconciliation to pass deficit-reduction packages that reflected deals between Congresses and presidents of opposite parties. In the current impasse over federal spending, reconciliation could pave the way for the “grand bargain” that many in Washington have been hoping for: The House and Senate can pass separate bills that allocate and cut federal spending or revenues by a certain amount; then they can delegate the details of what gets cut and what revenues get raised to the reconciliation process....
As a political tool, though, the promise of reconciliation is a powerful one—and one that liberals should be worried about. House Republican leaders have insisted they will only agree to a budget deal if the vast majority of their caucus agrees with it, and any deal that would satisfy House Republicans would likely only squeak through the Senate with a bare majority. Senate liberals may wish to protect such safety-net programs as Medicare and Medicaid or want a more equitable ratio between spending cuts and tax increases. Through reconciliation, fewer of those liberals would be needed to sign on to the deal because that process requires only 50 votes (Biden would be the tiebreaker).
But there's some very good news on that front from the White House. Yesterday, White House National Economic Council Director Gene Sperling blasted the Republican plan and specifically the cuts to Medicaid that turning it into a block grant program would mean.
“I want to point out how isolated the House Republicans are,” he said. “Serious people doing serious discussions do not take an absolutists position that you cannot have a penny of revenue.”
He said Mr. Ryan has “put himself in a box” with his unwillingness to raise tax revenue. He said this forced Republicans to call for “very severe cuts” that if “explored” by Americans “they would not be proud of.”
Mr. Sperling attacked the House Republican proposals to overhaul Medicare and Medicaid, saying that the $770 billion in savings Republicans wanted from changing Medicaid would be unnecessary if Republicans would agree to roll back certain tax cuts.
“You can’t say to anybody who would be affected by that, that we have to do that, that we have no choice,” he said. “The fact is that all of those savings would be unnecessary if you were not funding the high income tax cuts.”
He also said, “From a values perspective, we should be very deeply troubled by the Medicaid cuts in the House Republican plan.” David Dayen has the full transcript, which concludes:
So when we say that there—that the tyranny of the math is that these—these—this Medicaid program, this Medicaid cut will lead to millions of poor children, children with serious disabilities, children with autism—elderly Americans in nursing homes losing their coverage or being—or—or having it significantly cut, we are not criticizing their plan. We are just simply explaining their plan.
One good reason for the White House to fight for Medicaid is the role it's expansion plays in the Affordable Care Act. The Republican plan for Medicaid and the ACA are simply incompatible (of course, the Republican plan would repeal the ACA, so for the GOP that objection is moot). But additionally, as Ezra Klein points out and the graph up top reflects, Medicaid is a really cost efficient—cheap—program. It can't substantially be cut and made cheaper, if it's going to cover the same number of people.
The Republicans have no qualms about booting 34 million children out of the program. Or the millions of working poor, or the more millions of seniors in nursing homes. I'm not sure where Sen. Conrad falls on that one, but it's very good to know that the White House is vehemently opposed.