Liberal Group Proposes Reduced Medicare Spending

The Center for American Progress, a think-tank closely associated with President Obama, offered up a deal on Wednesday on how to cut the deficit by reducing spending for Medicare without, it says, hurting seniors.

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As the White House and Congress debate taxes and entitlement reform, an influential liberal think-tank is offering what appears to be an olive branch. It comes at a time when many Democrats are trying to protect entitlements, such as Medicare. At the same time, Republicans say those entitlements are too expensive in their present form.

NPR's Julie Rovner tells us more about this latest attempt to find common ground.

JULIE ROVNER, BYLINE: Senate Minority Leader Mitch McConnell didn't mince any words in his first floor speech of the lame duck session, Tuesday afternoon.

SENATOR MITCH MCCONNELL: Republicans like me have said for more than a year now that we're open to new revenue, in exchange for meaningful reforms to the entitlement programs that are the primary drivers of our debt.

ROVNER: And meaningful reform is exactly what the Center for American Progress says it's putting forward in a new plan unveiled today. The proposal would reduce health care spending by nearly a half trillion dollars over the next decade, but without asking middle-and low-income patients or their families to pay more.

Zeke Emanuel is a senior fellow with the group and helped put the policy together.

ZEKE EMANUEL: If entitlement reform is simply code for dismantling Medicare and Social Security, we're not at the table and we should oppose that with everything we've got. On the other hand, if entitlement reform is we're going to transform the system, modernize it so it can deliver high quality, lower cost care, that's where we are. And that's what we think we've got here.

ROVNER: Now, the Center for American Progress isn't just any group. It's considered something of the White House's reserve corps. If Emanuel's voice sounds familiar, that's because here's the brother of the former White House Chief of Staff Rahm Emanuel and a former White House health staffer himself. And this new plan is notable not just for savings half a trillion dollars, but for what some of those savings are.

They include many things that build on savings included in the Affordable Care Act, like cutting waste and encouraging more efficient care. But there are also some controversial items, like asking wealthier Medicare beneficiaries to pay more out of pocket for their care and limiting the tax free status of health insurance for people who earn more than $250,000 a year.

Neera Tanden, the group's president, said she knew there might be some liberal pushback for those.

NEERA TANDEN: These are not easy proposals; they are definitely not easy proposals for the progressive side.

ROVNER: But they are things that both liberal and conservative health economists agree would start to rein in health spending, as 78 million baby boomers start to migrate onto Medicare. And Zeke Emanuel says this is not just something intended to please Republicans.

EMANUEL: The health care system is the fifth largest economy in the world - $2.8 trillion dollars, it's as big as the French economy, right. You're not going to transform it overnight. You are, however, need to put in place the structures that will transform it over a decade. That's what we've tried to do and I think this is the legacy for the president.

ROVNER: But will this plan really impress any of those Republicans who are clamoring for entitlement reform? Early indications are maybe not.

TOM MILLER: The idea that you can shoot at everyone in a crowd and not hit a beneficiary is ridiculous.

ROVNER: Tom Miller is a resident fellow at the conservative American Enterprise Institute and a former Republican congressional staffer. He's suggesting the plan still cuts payments to health care providers too deeply to protect patients from care disruptions.

MILLER: It's just a continuing combination of further payment reductions - relatively arbitrarily - higher taxes on top of the previous taxes, and very much a now-we're-dropping-the-veil, you're going to see what command and control really looks like for the health care system.

ROVNER: And there are some places even the liberal Center for American Progress wouldn't go. Tanden said raising Medicare's eligibility age to 67 is a non-starter. All it would do it shift costs, the group says. She also said reducing Medicaid at a time when the administration is trying to get governors to expand the program would send the wrong message.

Julie Rovner, NPR News, Washington.

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