Tax cuts vs. Medicare cuts GOP's grand chance: Breakthrough on health care reform in reach if tax cuts delayed

September 25, 1995

TOO BAD Republicans in Congress are so enamored of tax cuts that they may miss their chance to seize the high ground in reforming the nation's health care system. President Clinton's Democrats had a similar opportunity last year to bring health costs under control but they botched it through a classic demonstration of how not to legislate; now they are sideline whiners. Republicans have a ready-made remedy for avoiding a similar fate.

If they would agree to delay any efforts till next year for a tax cut that today cannot be justified on economic grounds, they would deprive the Democrats of their No. 1 line of attack -- namely that the GOP proposal to reduce increases in Medicare spending by a whopping $270 billion over seven years is designed to pay for a $280 billion tax cut for the wealthy.

House Republicans have demonstrated remarkable skill so far in bringing their Contract with America to fruition. They have slashed discretionary domestic spending subject to year-by-year appropriation. They have prodded their Senate colleagues and the Clinton administration into agreement on the essential thrust of welfare reform. If they now could cap this legislative year by putting a lid on out-of-control entitlement programs and moving convincingly toward balancing the budget, they would have every right to claim victory.

President Clinton could have grabbed the initiative had he been willing to take a clear stand against a raid on the revenue base. But he could not resist the chance to repeat his campaign pitch for a middle-class tax cut. His tax proposal, like his formula for Medicare reform, is typically half as large as its Republican alternative.

Republicans at this juncture are having trouble making their arithmetic work. It is not that their approach to Medicare is wrong; on the contrary, their hopes of offering senior citizens a variety of choices over and above the existing fee-for-service formula make a lot of sense. They have also been adroit in working with major players -- doctors, hospitals, senior citizen organizations, the insurance industry -- in holding down some of the complaints that doomed the Clinton plan a year ago.

Consider the reaction if the Republicans pulled the surprise of the year by delaying their tax-cut plans. Suddenly, they could fashion a Medicare compromise that could draw the kind of bipartisan support achieved recently for welfare reform. Suddenly, after such a show of determination to cut the deficit, the Fed could lower interest rates and stimulate the economy. Suddenly, Democrats would be without a prized issue. It would be a political ten-strike.

Alas, much of the above is political fantasizing. Strong elements in the GOP are much more devoted to cutting taxes than balancing the budget. As we said at the outset: TOO BAD.

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