Fiscal Cliff Watch

11.28.12

What are Democrats Willing to Negotiate?

Wonkblog's Suzy Khimm writes that Democrats are adamantly opposed to Grand Bargain negotations involving Social Security, the Medicare eligibilty age, and overall Medicare benefits, but there are two potential openings for deficit hawks:

Medicare drug payments: This is one area where Democrats are more enthusiastic about reform than their Republican counterparts. Obama’s budget finds $137 billion in savings by requiring drug companies “to give Medicare the same rebates for medicines for low-income recipients that are allowed for Medicaid’s purchase of prescription drugs,” Bloomberg notes. House Progressives also want to allow the government to negotiatedirectly with drug companies on prices for Medicare Part D, which would raise about $156 billion over 10 years.

Obama’s budget also proposes Medicare provider payment cuts for costly services such as rehabilitation and home health care. But all of these changes are relatively small-scale compared to the total that Republicans are likely to demand.

Medicaid: Democrats have mostly avoided weighing in on specific cuts or reforms to Medicaid, which was expanded significantly under the Affordable Care Act, other than to say they oppose benefit cuts. Durbin, however, suggested that savings might be found through the waiver process, which gives states more flexibility in determining eligibility and benefits, and in coordinating care for “dual-eligibles” who qualify for both Medicaid and Medicare.