Senate Rejects House Budget Plan to Privatize Medicare

Wednesday, 25 May 2011 08:17 PM

 

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The U.S. Senate rejected a House- passed budget plan that would privatize Medicare, a vote aimed at putting Republicans on record on an issue Democrats say could boost them in the 2012 elections.

The Democratic-controlled Senate voted, 57-40, not to advance the plan drafted by House Budget Committee Chairman Paul Ryan, a Wisconsin Republican. Yesterday Democrats seized a Republican-held House seat in western New York in a special election that the Democratic candidate turned into a referendum on Ryan’s deficit-cutting Medicare proposal.

“Last night’s results provide clear evidence that when voters learn about the Republican plan, ending Medicare as we know it, they say, ‘no,’” said Senator Patty Murray of Washington, chairwoman of the Democratic Senatorial Campaign Committee. “This is a red district, and Republicans were expected to win, but everything changed once that conversation turned to Medicare.”

Republicans said Democrats have failed to offer a credible budget alternative to curb costs of the government health program for senior citizens and restore some fiscal balance at a time of mounting deficits.

Senator John Cornyn of Texas, chairman of the Senate Republican campaign committee, said Medicare may be trumped by the economy as an election issue next year. At any rate, he said, Republicans can get traction on the Medicare issue by pointing out the lack of Democratic ideas.

‘What’s the Alternative’

“Ask, where’s the alternative,” Cornyn said he will advise his party’s candidates. “Where’s your responsible budget?”

Five Republicans sided with Democrats to defeat the Ryan plan. They included Senator Scott Brown of Massachusetts, a first-term lawmaker who faces voters in a heavily Democratic state next year; Senators Susan Collins and Olympia Snowe of Maine; Lisa Murkowski of Alaska and Rand Paul of Kentucky. Democrat James Webb of Virginia voted for the House plan.

At the insistence of Republican Senate leaders, the chamber also voted on President Barack Obama’s fiscal 2012 proposal announced in February. Senators voted, 97-0, not to advance the president’s plan, which would cut $1 trillion from budget deficits and is silent on broad changes to Medicare and other entitlement programs.

Ryan’s proposal relies exclusively on spending cuts to reduce the government’s deficit, slicing $6.2 trillion over 10 years from Medicare and scores of other programs including Medicaid, food stamps, farm subsidies and Pell college tuition grants. It wouldn’t balance the government’s books until 2040, in part because it also would cut corporate and individual tax rates.

Subsidies for Medicare

It calls for replacing the traditional Medicare health-care system for the elderly with subsidies to buy private insurance, starting with people who turn 65 in 2022.

The Congressional Budget Office estimated that older Americans would pay a higher percentage of their income for health care under Ryan’s plan than they do in the current system.

Lawmakers in both parties say Congress must do something to curb the government’s debt. Negotiations are under way to try to craft a deficit-reduction plan that could be paired with legislation needed in the next few months to boost the nation’s $14.3 trillion debt ceiling.

The proposed overhaul of Medicare, passed by the Republican-controlled House last month on a 235-193 vote, has been rejected by some in the party.

‘Radical Change’

Last week, Republican presidential candidate Newt Gingrich called it “right-wing social engineering” and “radical change.” He later apologized for his remarks.

Brown announced his position in an opinion article this week in Politico, days after he told constituents in his home state that he would vote for the Medicare revamp, while predicting the measure would fail in the Senate.

In the Politico article Brown said seniors “will be forced to pay ever higher deductibles” under the plan and that Medicare has already been cut too much, including as part of the 2010 health-care overhaul.

In the New York House race, Democratic candidate Kathy Hochul’s support jumped in the polls after she began focusing on the Ryan plan.

Hochul, 52, the Erie County clerk, defeated Republican state legislator Jane Corwin, 47 percent to 43 percent, with 97 percent of the vote counted, according to the Associated Press tally. Buffalo-area industrialist Jack Davis, who ran on the Tea Party ballot slot, received 9 percent.

Three-Way Race

Some Republicans, including House Majority Leader Eric Cantor of Virginia, attributed Corwin’s loss to the fact that she had to fight a three-way race.

Polls show public opposition to the Ryan plan. In a March 4-7 Bloomberg National Poll, 54 percent of respondents said they would oppose a system in which government vouchers would help participants pay for their own health insurance, while 40 percent said they would support that. Six percent said they weren’t sure. The poll of 1,001 adults had a margin of error of plus or minus 3.1 percentage points.

Before today’s vote, some Senate Republicans took to the floor to defend Ryan’s plan, and to point to ways that Obama’s policies could yield their own deep cuts to Medicare.

Senator John Barrasso, a Wyoming Republican, said the health-care overhaul Obama signed into law last year would create an independent advisory panel after 2012 to recommend ways to curb spending under Medicare.

Obama wants “to disguise the long-term impact that the board’s price controls will have on seniors on Medicare,” said Barrasso, a doctor. “If he does so successfully, well, the patients on Medicare will be the big losers.”

--With assistance from Lisa Lerer, James Rowley and Julie Hirschfeld Davis in Washington. Editors: Laurie Asseo, Jim Rubin.

To contact the reporter on this story: Laura Litvan in Washington at llitvan@bloomberg.net.

To contact the editor responsible for this story: Mark Silva at msilva@bloomberg.net

© Copyright 2014 Bloomberg News. All rights reserved.

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