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Cutting Medicare Without Reforming It

Will Republicans go along with the Democratic plan?

12:02 PM, Jul 7, 2011 • By JOHN MCCORMACK
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James Capretta has a must-read over at NRO: "Budget Danger Ahead: How Republicans could get snookered again." 

Capretta notes that Obama's three goals in the debt ceiling talks are (1) securing a deficit reduction package to appeal to independents, (2) getting a tax increase that will neuter the Republican party, and (3) keeping the "entitlement status quo" intact.

For some Republicans under the illusion that they could strike a deal that includes Medicare cuts, Capretta warns:

[T]he president and his allies are playing a familiar card. It’s not that they are against entitlement “reform,” they say, it’s just that they want to protect the beneficiaries from any financial sacrifice. And so we learn in recent days (see here and here) that Democrats are willing to put sizeable Medicare and Medicaid “cuts” on the table. Among the changes that are reportedly under consideration are further reductions in what providers of services and products are paid, trims in Medicare’s support of hospital-based physician-training programs, and importation of Medicaid’s pharmaceutical-rebate scheme into the Medicare prescription-drug benefit for the so-called “dually eligible” (that is, the elderly who are enrolled in both programs). And apparently some Republicans are willing to play along.

These kinds of changes in Medicare and Medicaid are nothing new. Various versions of them have been included in every budget deal going back 30 years, and most especially in the bipartisan deals of 1990 and 1997. They do not constitute genuine entitlement reform. They will not fix Medicare and Medicaid. And they will not solve the nation’s budget problem....

Republicans need to be very wary of confusing meaningless Medicare and Medicaid “cuts” with actual reforms that will make a difference. If the president and his allies have ruled out all variants of genuine reform — and the recent Medicare proposal from Sens. Joe Lieberman (I.) and Tom Coburn (R.) certainly counts as a first step toward genuine reform — then Republicans should make it clear that they have no incentive at all to make concessions.

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