Resources

Thomson Reuters Tax & Accounting News

Featuring content from Checkpoint

Back to Thomson Reuters Tax & Accounting News

Subscribe below to the Checkpoint Daily Newsstand Email Newsletter

Republicans seen scrapping Ryan Medicare plan in U.S. budget push

WASHINGTON (Reuters) – Aiming to acquire more budget powers and take a swipe at Obamacare, Republicans will likely scrap a proposal that stirred controversy and helped launch Wisconsin congressman Paul Ryan on the national stage: privatizing the Medicare health program.

Ryan’s bold Medicare “premium support” plan would be sacrificed to ensure passage of Congress’ first full budget in six years and allow Republicans a rare opportunity to use a powerful procedural tool to ease passage of other legislation.

Dropping the fiscal conservative’s signature plan, which had little chance of enactment, is one sign of how the Republican-controlled House and Senate are trying to show they can govern effectively as they seek to win the White House in 2016.

Republicans are hoping to use the power known as budget “reconciliation” to pass a bill to repeal or replace President Barack Obama’s Affordable Care Act, known as “Obamacare,” a long-standing goal of the party.

For many House Republicans, a shot at dismantling Obamacare has become the overarching budget goal, eclipsing other partisan policy proposals driven by Tea Party conservatives to slash spending on costly federal benefits programs.

While Obama would be sure to veto such a bill, he could be forced to compromise more with Republicans if a Supreme Court ruling on the legality of federal Obamacare subsidies goes against the government in June.

“To me the only thing that makes a real difference now is are we going to have a vote to repeal Obamacare,” said Representative Tim Huelskamp, a conservative Republican from Kansas.

By invoking reconciliation, Republicans would only need a simple majority in the Senate to pass such legislation, rather than a nearly impossible 60-vote threshold to dismantle Obama’s signature domestic achievement.

Ryan’s Medicare plan, adopted by the House for five straight years, made him the guru of Republicans’ drive to shrink government and elevated him to his party’s vice presidential candidacy in 2012.

The plan calls for converting the popular fee-for-service healthcare program into a system of subsidies for seniors to buy coverage from private insurers or a scaled-back Medicare starting in 2024.

POLITICALLY RISKY MEDICARE PLAN

Republican lawmakers and aides in both the House and Senate say that a deal nearing completion to work out differences between the two chambers’ budget plans will instead use the Senate’s adoption of Medicare savings goals that are similar to those proposed by Obama this year.

“We’re going to stick with the Senate language on Medicare,” said Republican Senator Chuck Grassley of Iowa, a member of the budget negotiating panel.

Republican Representative Mick Mulvaney also said Obamacare was the bigger priority.

“Would I be willing to make compromises on Medicare premium support in exchange for stronger reconciliation language on Obamacare? The answer is yes,” he told Reuters.

Most of what will be passed in the Republican budget plan, including domestic spending cuts aimed at eliminating deficits within 10 years, will be cast aside.

The real action is just now getting underway as appropriations committees start to craft fiscal 2016 spending bills for government agencies and the military. Debate over these spending levels will come to a head this fall as a new government shutdown deadline looms on Oct. 1 with a federal debt limit increase needed perhaps a month later.

Any tinkering with Medicare has long been seen as politically risky, especially for candidates in states with large senior citizen populations, such as Florida, Arizona, West Virginia, Maine, Pennsylvania and Iowa.

Ryan ignored such logic when he floated his Medicare plan as part of his first budget in 2011. It was a bombshell, prompting Democrats to claim it would gut Medicare’s promise of guaranteed healthcare and “voucherize” the program.

One Democratic TV attack ad depicted a Ryan impersonator pushing a wheelchair-bound elderly woman over a cliff.

Now, Ryan has moved to become chairman of the powerful House’s tax-writing committee and has steered clear of budget policy.

Asked by Reuters this week to comment on prospects for his Medicare plan surviving the budget negotiations, Ryan said he did not have time to talk.

His spokesman Brendan Buck said: “The chairman is confident the budget will allow the House to continue to pursue the important kinds of reforms needed to save Medicare.”

Tagged with →