Would it matter, one reporter asked the veteran legislator, if the president were to put chained-CPI -- a policy that reconfigures the way the government measures inflation and thus slows the growth of Social Security benefits -- on the table?
“Absolutely,” the legislator said. “That’s serious.”
Another reporter jumped in. “But it is on the table! They tell us three times a day that they want to do chained-CPI.”
“Who wants to do it?” said the legislator.
“The president,” replied the reporter.
“I’d love to see it,” laughed the legislator.
You can see it. If you go to WhiteHouse.gov, the first thing you’ll see is an invitation to read the president’s plan to replace the sequester. That plan is only a page. “Savings from Superlative CPI” -- another way of saying chained-CPI (consumer price index) -- is one of the items in bold type. It saves $130 billion over the next decade, mostly by cutting Social Security benefits. And yet there are key Republican legislators -- the very Republicans who say they want to strike a deal, and who the White House will need if it’s going to get a deal -- who don’t know the president is even willing to consider it.
Now, one possibility is the legislator was simply lying. But I doubt it. Politicians don't like to make themselves look uninformed in rooms full of reporters, and such cynical messaging would be out of character for this particular member of Congress. What we have here, rather, is a failure to communicate.
Chained-CPI isn’t the only policy concession the White House has made that seems to have escaped the notice of its negotiating partners. When Senate Minority Leader Mitch McConnell talks about what’s needed for an agreement, he calls for “serious means-testing for high-income people” on Medicare. When Sen. Lindsey Graham said he’d be open to a deal that would replace the sequester with $600 billion in revenues if the White House would reform entitlements. I asked his office what Graham meant. “He's discussed things like raising the Medicare eligibility age, means-testing entitlements, etc.,” said Kevin Bishop, his communications director.
It’s a continuing source of frustration among Republicans that the Obama administration, which seems so comfortable taxing the rich, isn’t comfortable with “means-testing” entitlements -- which is to say, asking wealthier seniors to bear a heavier burden for their health-care costs or receive less coverage from Medicare.
But on page 34 of the White House’s most recent budget, President Obama proposes to do exactly that. Medicare, it’s important to note, is already a partially means-tested program, with richer seniors -- about 5 percent of them -- paying income-related premiums for their hospital and drug insurance. Obama would increase those premiums by 15 percent, and he’d freeze the threshold such that, over the next decade or two, 25 percent of seniors were paying part of the cost of their coverage.
I asked Yuval Levin, editor of the conservative journal National Affairs and an influential Republican voice on health-care policy, whether this fits the typical Republican definition of means-testing. “Part D is means-tested and part B is means-tested,” he said. “I don’t see how doing more of that wouldn’t be means-testing.”
Ezekiel Emanuel, an oncologist who worked on the White House’s health-care reform push, says he rarely saw a Medicare proposal from the Republicans that the White House couldn’t at least talk about. “The difference may be on the Democratic side is that the way we want to means-test exempts a number of middle-class people, and so a difference might be how wide a swath you cut,” he says. “But it’s not a philosophical difference over the idea of means-testing.”
Republicans also believe that supplemental Medicare insurance -- typically called “Medigap” policies -- are increasing costs because they often wipe out any co-pays or deductibles for seniors. Orrin Hatch, the top Republican on the Senate committee that manages Medicare, has taken particular aim at these plans. “Multiple studies have found the Medigap policyholders use about 25 percent more services than Medicare enrollees who have no supplemental coverage, and about 10 percent more services than enrollees who have employer-sponsored retiree coverage,” he notes in a policy paper.
The administration agrees that Medigap policies are a problem. It’s proposed a 15 percent surcharge on Medigap policies that cover first-dollar expenses. The idea is to make those policies less attractive to seniors. Privately, administration officials say they’d be willing to go quite a bit further.
That’s not to say that the White House necessarily goes as far as all Republicans would like -- though they complain that it’s often hard to figure out exactly how far Republicans want to go, as they have a habit of handing over targets for how much money they want to cut from Medicare without detailing the policies that would get them there.
Still, over the course of dozens of conversations with Democrats and Republicans on Medicare, I’m convinced that the zone of agreement is larger than many participants in the debate realize. What’s holding an agreement up is, in part, that Republicans are far less willing to compromise on taxes than Democrats are to compromise on Medicare and Social Security. But what shouldn’t be holding an agreement up is that top Republicans simply don’t know the compromises the White House is willing to make on Medicare and Social Security.