Republican Rift Widens over U.S. Medicare Cuts

*Gingrich remarks could undermine Republicans on Medicare

*Ryan says his Medicare plan is not "radical"

By Donna Smith and Ann Saphir

WASHINGTON/CHICAGO (Reuters) - A Republican rift over the government health program for older Americans widened Monday as Congressman Paul Ryan hit back at criticism of his Medicare overhaul plan from within his own party.

In a speech to the Economic Club of Chicago, Ryan said Republican presidential hopeful Newt Gingrich was "missing the mark" on what the proposed cost-cutting revamp does.

Gingrich on Sunday called Ryan's plan "radical," saying there were other ways to save money for the program that faces increasing financial strains from rising costs and aging baby boomers, those born between 1946 and 1964.

"I hardly think it's anything radical," Ryan said. "It's basically common sense and using solutions that have proven to work, that have been supported by Democrats and Republicans in the past, and more importantly, according to the budget experts, it saves Medicare."

Republicans are facing voter anger over the proposal that essentially would turn the fee-for-service Medicare into a program of vouchers that the elderly would use to purchase subsidized health insurance from private insurers.

Gingrich, who is seeking the Republican nomination for president, on NBC's "Meet the Press" on Sunday said of the Ryan plan: "I don't think right-wing social engineering is any more desirable than left-wing social engineering. I don't think imposing radical change from the right or the left is a very good way for a free society to operate."

The criticism came as Republicans press for spending cuts in Medicare and other government programs in exchange for their support for raising the U.S. credit limit. The United States effectively reached the legal limits of its borrowing authority Monday and needs an increase in the $14.3 trillion debt cap by Aug. 2 in order to keep paying its bills.

Gingrich "has undermined the Republicans at the negotiating table for the budget," said David Kendall, an analyst with the Democratic centrist think tank Third Way. "Republican leaders can no longer present a united front over making major changes to Medicare."

Michael Franc of the conservative Heritage Foundation, said the comment by Gingrich, a former speaker of the U.S. House of Representatives, "certainly gives a talking point to the critics" of the Ryan plan.

But he said the public may be ready to accept some changes to Medicare as part of a deal that reduces the $1.4 trillion deficit and future debt.

Indeed, House Democratic Leader Nancy Pelosi said on CNBC on Monday that Medicare was on the table in deficit talks.

"I think Medicare's on the table," Pelosi said. "We have to put it all on the table, see what works." (Reporting by Donna Smith in Washington, Ann Saphir in Chicago; Editing by David Lawder)