Beyond the Medicare Fight: GOP, Centrists Targeting Medicaid

Republicans returning to Congress this week after a tumultuous two-week recess have learned the hard way an old political lesson: Medicare is indeed the “third rail” of American politics. But with all the attention on Medicare, what's going to happen to Medicaid – the principal payer for health and long-term care for nearly 60 million low-income Americans – amid all the budgetary deal making underway on Capitol Hill?

On Wednesday afternoon, Sen. Jay Rockefeller, joined by other Democratic senators, including Bernie Sanders and county officials from the National Association of Counties, is scheduled to hold a press conference denouncing the GOP proposal to place a flat limit on Medicaid spending. It would do so by providing the money through capped block grants. Senator Rockefeller's press alert warned: “If turned into a block grant program, counties, states, seniors and people with disabilities would be forced to pay more than they can afford or risk losing their vital Medicaid coverage altogether.” Some officials at the press conference are also likely to criticize other, seemingly more “moderate” bipartisan proposals to impose a ceiling on federal spending.

In fact, of all the proposals under serious consideration in Washington, from the GOP plan to assorted bipartisan spending or deficit cap approaches, it seems the only one that doesn't appear to set in motion spending ceilings is the House Progressive Caucus' “People's Budget.” But that budget is essentially being ignored by the mainstream media and Democratic leaders. The plan claims to eliminate the deficit and boost the economy by 2011 by, among other steps, taxing the rich, ending corporate giveaways, cutting defense, withdrawing from Afghanistan and Iraq – and putting Americans back to work through a “Make it in America Jobs Program.”

But so far, it's gotten little notice except from liberal publications and commentators, another sign of the lack of clout, so far, of progressive organizations totaling millions of members in shaping the debate in Washington.

The insider-approved bipartisan approaches include the rigid Corker-McCaskill bill with its 20.6 percent of GDP limit and the “Gang of Six” plan apparently derived from the Simpson-Bowles deficit, or “cat food,” commission. In earlier comments about the GOP-backed spending ceiling's impact on Medicaid, Senator Rockefeller pointed out, “The federal government has always made good on a simple promise – that we should make it possible for states to pay for the basic health care needs of some of our most vulnerable citizens. Slashing this program or placing an arbitrary, hard cap on funding would undermine our commitment to the American people.”

At the same time, Families USA joined by over 140 health, progressive and advocacy groups, including the powerful, 37-million member AARP, declared in a letter today to every member of Congress:

[We] urge you to oppose proposals that arbitrarily cut Medicaid and shift a fiscal burden to the states. Ultimately, the proposals would transfer the burden to seniors who depend on the program for long-term care, people with disabilities, communities of color and low-income women, children and families.

Such harmful cost shifting includes (1) converting the program to a block grant; (2) setting a cap on overall federal spending that inevitably results in reducing federal Medicaid spending over time; and (3) rolling back protections that currently ensure health coverage is not diminished.

As Families USA Executive Director Ron Pollack says, “Any arbitrary cap is of deep concern with respect to the future of people who are dependent on Medicaid.”

He adds, “Medicaid is not adequately operated today. Medicaid has more holes in it than webbing,” for a safety net program. Surprisingly, for the program that is generally referred to as the “lifeline” for the poor, while being the largest payer for nursing and long-term care for the aged, the disabled and low-income children, it simply doesn't cover huge swaths of America's poor. As Pollack observes, “For single people without children, you can be literally penniless in four out of five states and not be eligible for Medicaid.” Even impoverished parents whose children are receiving Medicaid can't enter the program if they're earning above $4,633 in household income in states such as Louisiana. All told, the median income ceiling for such parents is $12,000 a year, with 50 percent of states setting an even lower limit, including $11,860 for a family of three in Michigan.

President Obama's controversial health reform plan that the GOP budget seeks to repeal aims to expand Medicaid's coverage to the currently uninsured poor.

Taken together, Ryan's budget plan for Medicaid would cut $1.4 trillion in spending for the program over a decade, while kicking out 15 million currently enrolled people and forcing them to fend for themselves, according to Families USA and other reports. As Pollack has said, “The House Republican budget proposal should be accompanied by a 'Grandma Beware!' sign. The proposal will inevitably result in seniors losing the nursing home and other long-term care they need at a time when they are most frail. In addition to hurting seniors when they are most vulnerable, younger family members will need to give up their jobs so they can take full-time care of their parents and grandparents.”

It's that sort of danger to long-term nursing care that can help stoke broad-based opposition among seniors to efforts to undermine Medicaid, not just Medicare, especially when AARP ramps up its grassroots outreach efforts to its nearly 40 million members. The anger over threats to Medicare seems ripe for expanding to Medicaid, if progressive groups and Democratic activists can step up their game. Advocacy groups for the millions of people with disabilities and serious mental illness are also joining in the fight. For instance, Robert Bernstein, the executive director of the Bazelon Center for Mental Health Law, said of Ryan's so-called “Path to Prosperity” budget: “People with mental disabilities who rely on public mental health services won't be able to walk on Congressman Ryan's 'path.'” In an alert to thousands of supporters, he pointed out that Medicaid has already been cut by states during the economic recession.

In some ways, though, efforts to protect Medicaid were helped considerably by the better-late-than-never speech by President Obama in mid-April that framed a Democratic vision for safety-net programs and taxing the rich. True, his high-flying rhetoric has generally faded away in the reality of negotiating with implacable, Tea Party-driven Republicans, whether it involved his cave-in on extending the Bush tax-cuts for the wealthy or his $38 billion in short-term budget cuts for fiscal year 2011 to avoid a government shutdown. Even so, his speech set the framework for a vigorous liberal defense of Medicaid along with Medicare:

“There's nothing serious about a plan that claims to reduce the deficit by spending a trillion dollars on tax cuts for millionaires and billionaires,” Obama said. “And I don't think there's anything courageous about asking for sacrifice from those who can least afford it and don't have any clout on Capitol Hill. That's not a vision of the America I know.”

On top of that, it's clear that the draconian budget proposal by Rep. Paul Ryan and the GOP leadership in Congress that privatizes Medicare has sparked public outrage progressive groups. But given the uproar and the unwillingness of a nominally Democratic-led Senate to pass such a radical measure, the GOP plan to end Medicare as we know it by 2022 isn't going to pass Congress or become law.

Liberal groups such as Americans United for Change have sought to harness public anger with the help of widely-publicized TV spots that aired in four districts, including Ryan's, that asked: “What were they thinking?” when they voted to end Medicare and give tax breaks to millionaires.

Even though Medicaid wasn't mentioned in the TV ads, both Americans United for Change and Families USA highlighted the threats to the Medicaid program in locally targeted press releases. As Americans United for Change proclaimed, after describing the danger to Medicare:

The Republican Budget Plan is a Roadmap to Ruin for America's Seniors, Less Fortunate and Disabled:

“Replaces Medicaid With a 'Block Grant' That Would Shift Costs to States, Leave Millions Without Care. Ryan's budget would covert Medicaid into a 'block grant' to the states that will not cover raising health care costs and do nothing to contain those costs. According to CBO, block granting Medicaid would shift those costs to states, beneficiaries and health care providers. Those hit hardest would be low-income children, seniors and people with disabilities who make up the bulk of Medicaid beneficiaries and who rely on long-term care such as nursing homes. In fact, according to a recent analysis, 'If Republicans get their way, seniors and families would lose $1.4 trillion in health benefits and at least 15.9 million could see their coverage cut entirely.'”

In addition, the Center for American Progress has reported, the GOP budget plan could wipe out three million jobs affected by the Medicaid program because of the multiplier effect of spending.

Unfortunately, it's not just Republicans who are targeting Medicaid, even if Democratic centrists don't match their GOP colleagues in baldly seeking to decimate the program. But proposed across-the-board spending limits as a percent of the GDP and “automatic” cuts triggered by exceeding deficit caps are flourishing in Washington these days. They're coming not just from the Corker-McCaskill bill, but also from the growing interest in the “Gang of Six” Republican and Democratic centrist senators whose ideas are proudly modeled on the failed “cat food” Simpson-Bowles commission. The still-developing proposal would likely incorporate automatic spending cuts and, possibly, tax increases if deficit targets aren't met.

On Tuesday, The Associated Press reported, Sen. Kent Conrad (D-North Dakota), the chairman of the Senate Budget Committee and a member of the “Gang of Six,” told reporters after briefing the caucus, “What I am laying out borrows heavily from the fiscal commission.”

Yet, this form of “responsible” centrism that places lowering the deficit above rejuvenating the economy and getting millions of Americans back to work should be especially worrisome to progressives.

But there are even more potential Medicaid threats ahead because of the looming opposition to raising the debt ceiling without fundamental budget reforms and cuts, a growing initiative that now involves moderate Democrats. These include liberal Michigan Sen. Amy Klobuchar, who faces re-election next year. This should serve as a wake-up call to liberals everywhere about just how far the debate over the budget has moved: A generally progressive senator such as Klobuchar in a recession-wracked, pro-union state sees it as crucial to accept the GOP framing on this issue. As a result, she is defying her president by tying the budget to the debt ceiling and promoting the need for long-term fiscal reform and, presumably, budget cuts. Presidential Obama wants a “clean” vote on the debt ceiling, not tied to the federal budget and likely GOP hostage-taking on the issue, but it doesn't look like he's going to get it.

As The Washington Post reported last week:

A growing number of Democrats are threatening to defy the White House over the national debt, joining Republican calls for deficit cuts as a requirement for consenting to lift the country's borrowing limit.

The tension is the latest illustration of how the tea-party-infused GOP is driving the debate in Washington over federal spending. And it shows how the debt issue is testing the Obama administration's clout as Democrats, particularly those from politically competitive states, resist White House arguments against setting conditions on legislation to raise the debt ceiling …

Even Sen. Amy Klobuchar (D-Minnesota), generally a stalwart White House ally, is undecided on the issue and is “hopeful” that a debt-ceiling bill can be attached to a measure to cut the federal deficit, said her spokesman, Linden Zakula. Klobuchar is also up for reelection next year.

Months ago it seemed unthinkable that Congress might refuse to raise the borrowing limit …

And although many lawmakers and aides say a bipartisan deal is likely, the insistence on conditions by a small but pivotal group of Democrats suggests that any agreement would almost certainly have to include substantial cuts in the deficit – not just to mollify House Republicans but to satisfy Democrats who could be politically vulnerable on spending issues.

Let's recap: An idea embraced by the Tea Party that could risk a global financial panic and worldwide depression if the United States defaults on its debt is now seen as a useful device by a liberal, “politically vulnerable” Democrat in Michigan Why wouldn't Medicaid cuts be part of any resulting budget deal? She's not using the debt ceiling as blackmail, as the GOP is, but it's still going to make it harder for Democrats to stand up to Republican demands for savage budget cuts.

So, with some Democrats willing to link the debt ceiling to the budget vote, now Senate Majority Leader Harry Reid and, yes, President Obama, seem to favor a variation of a flat-spending approach. They support a “deficit cap” that would trigger automatic spending cuts that could well include Medicaid. As David Dayen observed at Firedoglake:

The endgame of the deficit fight is going to be so brutal and so predictable I can barely bring myself to watch it. Republicans will say “we won't raise the debt limit” even though they've privately assured Wall Street and the President they will. Democrats will say “this is irresponsible” even though they'll attach something just as irresponsible to what ultimately passes. And the compromise reform will end up as something the White House wanted anyway.

Harry Reid telegraphed this in his conference call yesterday.

The leader of the Democratic-controlled Senate said Wednesday that any legislation increasing the government's ability to borrow more money to meet its obligations should contain a cap on how big the deficit can be in any given year.

Majority Leader Harry Reid said the mechanism would involve a new law binding Congress to reduce the deficit. The Nevada Democrat didn't give further details, but several proposals on Capitol Hill would trigger automatic spending cuts or tax increases if Congress can't meet spending or deficit targets.

“You would just have a law that says we have to do it,” Reid told reporters in a conference call. “There are all kinds of triggering mechanisms.”

The trigger is essentially the same trigger that President Obama snuck into his fiscal policy speech that beat up on Paul Ryan and sent liberal hearts soaring …

In other words, current and future Medicaid recipients are still in big trouble.

Of course, the GOP scheme for Medicare has become so politically toxic that even Republicans such as Rep. Michele Bachman, the Tea Party darling from Minnesota, started backing away from it during Sunday talk show appearances. But the often downplayed Medicaid program remains in peril and Democrats could serve as accomplices to a slash-and-burn approach to the federal-state program that costs about $330 billion a year.

The upshot of the GOP plan is devastating, according to a new Center for Budget and Policy Priorities report bluntly titled, “Ryan Medicaid Block Grant Would Cause Severe Reductions in Health Care and Long-Term Care for Seniors, People with Disabilities and Children.” Naturally, this helps make any such plan that caps Medicaid regardless of economic downturns politically unpopular, a Democracy Corps survey and other polling has found, especially when the details are explained to people.

Even so, given the willingness of Democrats to bend to conservative-oriented lobbying pressure and right-wing messaging, the results could be disastrous – no matter whether the cuts to Medicaid come through block grants or other budget caps. Of course, such brutal cuts are not inevitable, if the Democrats succeed in using the “Ryan plan” as a potent, politically toxic symbol of GOP greed and heartlessness as the nation moves toward the 2012 election, defining sharply the difference between Republicans and Democrats. But if Democrats and liberals prove to be as ineffective in framing the budget debate as they were in Obama's first two years, then the draconian impact of the GOP approach or a Democratic-approved spending cap could be quite severe. “This would disproportionately harm people who depend on Medicaid as their lifeline,” Ron Pollack says.

It's little wonder that in an alert after the GOP plan was unveiled, Families USA warned 80,000 health care activists about its potential impact: “The House budget proposal is simply reckless and radical. It will deny seniors, people with disabilities and children the health care they need, while aiding the wealthiest people in America.” But unless the centrist consensus gathering around a federal spending or deficit ceiling is somehow blocked through a grassroots revolt, much of that same damage could still be inflicted on those who depend on Medicaid to survive.