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Will Obama support cuts to Medicare and Medicaid?

By Sahil Kapur
Monday, April 11, 2011 9:36 EDT
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WASHINGTON – Now that Congress has agreed on how to fund the government for fiscal 2011, attention turns to addressing America’s long-term budget. Republicans last week released a proposal that drastically reshapes the role of the federal government, in part by cutting deep into Medicare and Medicaid.

Appearing Sunday on NBC’s “Meet The Press,” White House senior adviser David Plouffe said President Barack Obama opposes the GOP plan, but said the president is willing to consider some cuts to Medicare and Medicaid in his budget proposal to be unveiled Wednesday.

“You’re going to have to look at Medicare and Medicaid and see what kind of savings you can get,” Plouffe said, assuring viewers that the president accepts the need for major spending reductions.

Contrasting Obama’s approach with the Republican blueprint, Plouffe added on ABC’s “This Week” that the president will make budget cuts with a “scalpel” rather than a “machete.”

The GOP proposal, put forth by House Budget Committee Chairman Paul Ryan (R-WI) and championed by party leaders, would privatize Medicare after 10 years. Americans currently under 55 would, upon retirement, have to choose between a series of private insurance plans, which the government would help pay for with vouchers whose value would be capped.

It would dissolve Medicare as we know it, and ultimately increase medical expenses for seniors in an effort to reduce government spending on health care, according to the Congressional Budget Office.

Ryan’s plan would turn Medicaid into a program of block grants to states — it’s currently run in tandem by the federal government and state governments — whose payouts would also be capped. Fewer low-income Americans would have health care coverage under the transformed program.

If Obama does seek to limit costs in Medicare and Medicaid, it remains to be seen whether he will do so by cutting benefits or by attempting to reduce waste, as he did in the sweeping health care law enacted last year. Progressives and older Americans will be closely watching to see how the president intends to handle their cherished programs.

Apart from its cuts to so-called entitlements, the Ryan plan aims to balance the budget by 2040 by slashing $6 trillion from a multitude of federal programs over a decade while reducing taxes for corporations and the wealthiest Americans.

Plouffe said Obama believes taxes should rise on high-income Americans in order to help reduce the nation’s $14 trillion debt. The federal deficit for 2011 is projected to be $1.5 trillion.

Congress is expected to pass a budget Wednesday to fund the government through September. It approved a one week stopgap measure late Friday night to prevent a much-feared shutdown while the legislation can be constructed.

 
 
 
 
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