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Today in ‘fiscal cliff': Could entitlements derail a deal?

(Alex Wong/Getty Images)

There are two concrete proposals on entitlements that House Speaker John Boehner put in his latest fiscal cliff proposal: raising the Medicare eligibility age and moving to a chained CPI for Social Security. Liberals tend to oppose both changes, which could set up another standoff as the Dec. 31 deadline approaches.

 Both sides say they're waiting for the other to offer alternative or additional spending cuts, but so far, feasible alternatives are only being floated on the margins of the debate. 

The Center for American Progress — the think tank on the left most closely aligned with the Obama administration — is making a big push right now against a higher Medicare eligibility age. On Tuesday, it released a new report that says "almost 435,000 seniors would be at risk of becoming uninsured," as low-income 65- and 66-year-olds could be squeezed out of both Medicare and Medicaid if the cutoff age is raised to 67. 

"Tens of thousands of low-income 65- and 66-year-olds, who would be cut off from Medicare — particularly the most vulnerable seniors living below the federal poverty level — will have nowhere to turn for coverage if their states reject the Medicaid expansion," the CAP report says. 

Many liberal Democrats maintain that Social Security should be excluded entirely from the fiscal cliff talks, as the program is paid for by its own trust fund and doesn't contribute in the same way to the deficit. But relatively speaking, there's more openness on the left to chained CPI for Social Security — with some some big caveats. Changing the inflation index would cut benefits and raise taxes, as my colleague Dylan explains, so groups like the Center for Budget and Policy Priorities say they'd want that change to exempt Supplemental Security Income, which benefits the disabled and poor elderly, and/or increase Social Security benefits at the same time. 

In response to such opposition, Boehner has demanded that liberals lay out the spending cuts that they are willing to live with. "We’re still waiting for the White House to identify what spending cuts the president is willing to make as part of the balanced approach that he promised the American people," Boehner said on the House floor today. "Where are the president’s spending cuts?"

But as Ezra points out, it's Republicans who want the big upfront entitlement cuts, not Democrats. So Democrats say they're just waiting for Republicans to lay out the changes they really want. (Even if you raised the Medicare eligibility age, it wouldn't be enough to reach Boehner's proposed target for program cuts.) Some policy wonks like Zeke Emanuel have laid out alternatives like a graduated eligibility age. But you're not hearing party leaders talk openly about such ideas just yet.



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Brad Plumer · December 11, 2012

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