Republicans have been calling for huge spending cuts to resolve the so-called “fiscal cliff” but they’ve been reluctant to actually name the cuts they want, especially to Medicare — until now. The two GOP senators from Tennessee — Bob Corker and Lamar Alexander — unveiled a plan Friday with $1 trillion in cuts, most of which would come from Medicare.
The plan would raise the Medicare eligibility age to 67 and raise the cost of Medicare premiums for wealthier beneficiaries, which is reminiscent of Mitt Romney’s plan for the popular program that provides insurance to all Americans 65 and older.
“This will sound unpopular. This is bad medicine for many people. But it is part of what we are supposed to do,” Alexander said.
Corker and Alexander’s plan wouldn’t be part of a short-term deal to avert the “fiscal cliff,” which they assume will solve the question of the expiring Bush tax breaks. Rather, it would be used as a tradeoff in order to get Congress to raise the debt limit. Treasury Secretary Timothy Geithner announced Wednesday that the U.S. would hit the statutory debt limit on December 31, 2012. At that point “extraordinary measures” would be taken, giving the government two to three months to pay its bills before defaulting.
President Obama has said that he is unwilling to negotiate to raise the debt limit, as he did in 2011. Whether this means he would invoke the 14th Amendment — as Bill Clinton has said he’d do if he were president — or use some other method to avoid default is unclear.
Corker suggested that reforms to Medicare are necessary, as the program will be insolvent by 2024. The Affordable Care Act includes several cost-saving measures for Medicare, most of which Republicans oppose. Scares about Medicare’s impending “bankruptcy” are almost as old as the program itself, which was signed into law by President Lyndon Johnson in 1965.
Rumors that the president was considering a raise in the eligibilty age prompted a progressive backlash in November. While eliminating 65- and 66-year-olds from guaranteed Medicare coverage would save the federal government an estimated $5.7 billion, it would would cost taxpayers, employers and state governments $11.4 billion.
But at least Republicans are now on record saying that they’d like to prevent millions of Americans from receiving Medicare.