On taxes, Republicans have made their position clear: no rate increases. Democrats, for their part, have yet to draw the same hard lines when it comes to entitlements. That's partly because entitlement reform is contingent upon a deal on taxes: Medicare, Medicaid and Social Security will be largely unaffected by the fiscal changes scheduled to happen on Dec. 31, so they'll only come into the picture if Congress and the White House make a big longer-term deal. But leading Democrats are slowly starting to stake out more specific positions on the kinds of entitlement reforms they'd be open to considering, as well as those they'd consider unacceptable.
Social Security: President Obama doesn't believe that Social Security reform should be part of any fiscal cliff deal. Instead, given that the program is funded by its own trust fund, Social Security should be addressed on a "separate track," said White House spokesman Jay Carney. "We should address the drivers of the deficit and Social Security currently is not a driver of the deficit."
Sen. Dick Durbin (D-Ill.) reiterated a similar position on Tuesday. "Social Security has not added one penny to the deficit," he said in a speech at the Center for American Progress. "We should take Social Security off the table for the current debate over the fiscal cliff." Instead, he advocated a separate "track" for reform, with a special commission set up to make recommendations and direct progress. Other liberal Democrats such as Sen. Tom Harkin (D-Iowa) have taken a harder line, arguing that Social Security, Medicare and Medicaid should all be off the table in the fiscal cliff talks.
Medicare benefits: Sen. Sheldon Whitehouse (D-R.I.) told Politico on Tuesday that “Medicare benefit cuts should be completely off the table.” But Senate Majority Leader Harry Reid (D-Nev.) was a bit more vague, saying that he wants to push for changes "that don't hurt beneficiaries." One potential compromise would be to change premiums but not cut benefits — for example, to require wealthier seniors to pay more for Medicare, as some Republicans have suggested in the past.
Medicare eligibility age: That was one of the proposals that was part of the Obama-Boehner talks during the 2011 debt-ceiling crisis, which ultimately fell apart on revenue issues. Some Democrats, like Sen. Debbie Stabenow (D-Mich.), have ruled it out entirely. But others have left a window open for potential negotiation.
Durbin, for instance, isn't a huge fan of the idea. In Tuesday's speech, he recounted how his own father had fallen ill and was counting down the days until he would qualify for Medicare. But Durbin also suggested that he could be open to a change, provided there is "the assurance and guarantee that [seniors] will have access to affordable health care," he said. "Until I hear that, I'm skeptical."
Sen. Kent Conrad (D-N.D.) more strongly asserted that he could be open to a higher eligibility age as part of a big deal, "Given that we now have exchanges to purchase insurance because of the president’s health-care reform law, it makes it much more acceptable, much more reasonable, over a long period of time to gradually increase the age, given that people are living so much longer," he said in a recent interview.
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 negotiate directly 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.