All about the benefits

The word of the day is “benefits” — as in, the specific kind of entitlement cuts that Democrats simply cannot tolerate as part of the debt-reduction talks.

There’s House Minority Leader Nancy Pelosi (D-Calif.):

Pelosi, D-California, told reporters later that she wants Obama to “have the room” to reach a deal, and she offered her “full cooperation to do that.” However, she said, House Democrats “do not support cuts in benefits for Social Security or Medicare,” and negotiations on specific reforms to those programs should be separate from a broader deficit reduction deal.

There’s Sen. Chuck Schumer (D-N.Y.), vice chairman of the Senate Democratic Conference:

“The vast majority of Democrats, House and Senate, have the view that Medicare benefits should not be cut. There’s also a generally-agreed-to view that there are savings to be wrought out of Medicare in the health care bill through making the system more efficient. Delivery system reform, making sure that when hospitals readmit people because they made a mistake they don’t get double reimbursement, things like that.

“So, I think we’re pretty united, along with speaker Pelosi that Medicare cuts, actual cuts in the benefits, are not something we would want to entertain.”

There’s Rep. Chris Van Hollen (D-Md.), the ranking Democrat on the House Budget Committee:

“We will not balance the budget on the backs of Social Security beneficiaries, and we will not support cuts for Medicare beneficiaries. We do believe that there are ways to save additional funds. For example, on Medicare, one way to do that is to get a better deal for the Medicare program for the prescription drug industry. There are ways to generate additional revenues to help the Medicare solvency issue without slashing benefits to Medicare beneficiaries.”

There’s even the AARP:

“AARP urges all lawmakers to reject any proposals that would cut the benefits seniors have earned through a lifetime of hard work,” said Barry Rand, the organization’s CEO.

The point, of course, is that not all entitlement cuts are created equal. For Democrats, there have consistently been two lines they’re unwilling cross: (1) privatization is out of the question; and (2) no benefit cuts. For Republicans, the list of demands is far more ambiguous. GOP leaders have said “Medicare cuts” are a necessity, but they haven’t said what kind of cuts they expect.

With Medicare, Dems could, for example, cut payments to the pharmaceutical industry, alter reimburse rates, do more to link provider payment to outcomes, etc. Politically, Dems think this shifts the burden back to the GOP: “You said you wanted Medicare cuts or you’d deliberately cause a crisis. Well, here are some Medicare cuts we can accept. Is it a deal or are you really that eager to punish seniors?”

With Social Security, this is far trickier. Cutting the program without affecting some benefits is practically impossible, so if Dems simply take Social Security benefit cuts off the table, the program itself is probably pretty safe.

The bottom line, though, remains the same: the more Democrats and seniors’ advocates talk about protecting entitlement programs’ “benefits,” the more it narrows the scope of the negotiations to structural changes.