Various press accounts of GOP turmoil are making it abundantly clear that buyer's remorse is building over the Ryan anti-Medicare plan. Democrats now have political leverage over their opponents and they have two choices:
1) Bash the GOP into oblivion over their privatization plan and hope that the narrative is strong enough to last for the next year and a half, begetting majorities in both Houses. At which point a Democratic plan for building on the Affordable Care Act can be crafted that would put Medicare on solid financial ground.
2) Offer the GOP a way out while the leverage is strongest. Put a plan on the table that saves money in a way that does not hurt Seniors or change the fundamental structure of the program. If they go for it, Dems get to take credit for doing something real about the deficit and we avoid any further rumblings from the credit markets. If the GOP does not go for it, Dems get to keep bashing them for wanting to kill Medicare.
My thesis stems from a concern about political tactics and a practical concern about the country's fiscal situation.
In 2012 I think there will be a political price to pay if the public thinks Washington has not done anything to fix the longterm deficit problem (not as important as jobs, but still important). If Democrats' only refrain is "hands off Medicare," it gives the GOP a chance to respond by saying their opponents have no plan to reduce the deficit. An alternate refrain of "hands off Medicare and here's a better way to fix it..." has more staying power and will appeal to some of those independent types who seem to be more concerned about fiscal issues than other voters. The election is a long way off. There is no guarrantee that the negative impact of the Ryan vote will be as strong in November 2012 as it is today. One cannot predict how future events may change political fortunes.
The bottom line is that Medicare is facing huge shortfalls in the long term and is a major driver of the national debt. I know some lefty types have no love for Ben Bernanke, but not too long ago, the scholar of Depression-era economics suggested that while cutting in the short term would be counter-productive, the government needed to start crafting a medium to longterm deficit reduction plan NOW. If there is no movement whatsoever on that front between now and 2012, Washington might be passing up a golden opportunity. Democrats would basically be banking on winning back the House and holding the Senate as opposed to using the leverage they have now over the Republicans to craft a deal more to their liking. Banking on the future in politics seems like risky business to me.
Act now, and the worst case scenario is a deficit reduction plan that contains some items progressives don't like. Congressional Democrats do not have to settle for anything remotely similar to the Ryan plan. The terms of the debate have been transformed by public opinion. The best case scenario is a center-left solution to the longterm deficit problem that calms the financial markets and creates some political space for future compromises on a host of other important issues including immigration, energy and overhauling the tax code. The worst case scenario if we don't act? Potential instability caused by financial market jitters and a political system that is even more polarized than it is today. It seems pretty clear that a Medicare overhaul will have to get 60 votes in the Senate. Democrats will not win enough seats in 2012 to get there.