According to the Financial Times
, President Obama is going to propose
cuts of "several hundred billion dollars from Medicare and Medicaid," when he presents his proposal for deficit reduction next Monday.
The FT reports that the proposal is expected to include the "grand bargain" policies the White House put on the table in the debt ceiling negotiations with Speaker John Boehner: "$150bn extracted from Medicare providers such as doctors and hospitals, $150bn coming from Medicare beneficiaries, and $125bn coming out of reforms to Medicaid," including "an increase in the eligibility age for Medicare." Additionally, the administration could propose more flexibility in negotiating drug prices and access to cheaper generic drugs.
While the administration has downplayed Social Security changes, and in fact Obama left Social Security out of his jobs speech while asserting that Medicare and Medicaid cuts had to happen, the chained CPI could be part of this proposal. The Medicaid cuts, among the least discussed of the "reforms," would be cuts to federal payments to states in the form of a "blended rate" formula for reimbursements.
The New York Time's Robert Pear writes about the political hurdles for Obama with these proposals.
Representative Emanuel Cleaver II, Democrat of Missouri and chairman of the Congressional Black Caucus, said: “Ninety-eight percent of the president’s speech was excellent. The Democratic caucus and the black caucus are fired up. But you will find that we have some differences with the president’s plan as it relates to Medicare and Medicaid. We would rather see some kind of increase in revenue as opposed to cutting these programs.”
By offering such proposals, Mr. Cleaver said, the president “cancels out any bludgeoning that Democrats might give the Republicans over Medicare and Medicaid.”
Health policy experts and lobbyists see the situation in a similar way. Julius W. Hobson Jr., a lobbyist who used to work at the American Medical Association, said he viewed the savings to be proposed by Mr. Obama as "an opening bid, the floor, the foundation for the kind of cuts Republicans want to make."
"Republicans will give a political answer: the president's plan is not enough," Mr. Hobson said. "It may not be enough in their eyes, but they will take it and build on it."
Republicans will settle for little less than privatizing Medicare and Social Security and block-granting Medicaid. As Hobson said, he's to start the negotiations from a position of already slashing the programs in a way that provides small benefit for the amount of very real economic hurt they could create for individuals. These are proposals that might make the federal books look a little better, but which cost far more than they save, and place the burden of those costs on those who can least afford it.
If this is just another trial balloon from the administration, it's been a really long-lived one, since they've been floating these proposals for months. Maybe the president's friends in the Democratic caucus on Capitol Hill can persuade him to pop it.
There's ongoing discussion in slinkerwink's diary.