Not all Medicare cuts are created equal

As Senate Democrats made clear yesterday, the Republican plan to end Medicare and replace it with a privatized voucher system is simply unacceptable. “For the good of the nation’s seniors, [the House GOP plan] must remain off the table,” several Dems said in a letter Monday to Vice President Joe Biden.

On the other hand, we have Senate Minority Leader Mitch McConnell (R-Ky.), who continues to say Republicans will cause a recession on purpose unless Democrats agree to cut Medicare.

Perhaps now is a good time to pause and note that not all Medicare cuts are created equal.

As bipartisan debt-reduction talks continue, the parties are approaching the process very differently. For Democrats, there appear to be two lines they will not 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 want and they don’t seriously expect Dems to accept Paul Ryan’s privatization plan.

The process, then, comes down to a straightforward task. Democratic leaders are quietly letting folks know they’re open to Medicare cuts, just so long as the cuts don’t affect seniors’ benefits and don’t replace the system with vouchers.

Senate Democratic leaders are attempting a balancing act on Medicare — by showing openness to containing the program’s ballooning costs but still drawing the line at cutting benefits.

The gambit is aimed at convincing voters that Democrats take the need to reduce the deficit seriously but will protect seniors more than Republicans — a message Democratic leaders think will help them retain their Senate majority against tough odds in 2012.

Senate Democratic Conference Vice Chairman Chuck Schumer (D-N.Y.) told reporters yesterday that Medicare may be included as part of a bipartisan deal “as long as it doesn’t reduce benefits to the beneficiary.” (Schumer added that the GOP should just “give up” on its privatization scheme.)

Dems, in other words, are looking for Medicare cuts that Medicare beneficiaries probably won’t notice. And what might those look like? Schumer mentioned cuts in payments to the pharmaceutical industry, and additional steps to pay providers based on outcomes, as possible examples.

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?”

Democratic leaders also think this would maintain the potency of the issue in 2012 because Republicans already voted for the wildly unpopular privatization plan. Even if Dems back some non-benefit Medicare cuts, the “Representative So-and-So voted to end Medicare” attack ads would still run — and still be accurate and effective.

My preference, by the way, would be for Medicare to be shielded altogether. But barring that, I’ll be interested to see if Dems manage to thread this needle.