Medicare: the issue that won't go away Bipartisan talks: Clinton offer to cut $18 billion eyed warily by bruised Republicans.

April 10, 1997

HOLD ANY APPLAUSE for President Clinton's offer to cut $18 billion more than he had proposed earlier from the key Medicare section of his five-year blueprint for a balanced budget. Behind the details of the Clinton plan lurk some high-pressure politics.

Republicans are still smarting over the way their 1995 plan for bringing Medicare costs under control was used by the Democrats to bludgeon them during last year's general election. Consequently, they will insist that any moves to shift more of the Medicare burden to middle- and higher-income seniors must be a bipartisan affair.

Although the president's $18 billion gambit goes a long way toward narrowing the gap between the two parties on Medicare savings, some key differences remain. Perhaps most important is the Democratic urge to put the squeeze on health care providers (doctors and hospitals) while the Republicans believe in holding down the benefits available to Medicare recipients. Obviously there are more of the latter than the former, thus steeping the issue in politics and the posturing that goes with it.

Republicans continue to be dismayed by Mr. Clinton's reluctance to correct what most economists believe is the tendency to exaggerate inflation trends in the government's Consumer Price Index. Because entitlement benefits are calculated on the CPI, an accurate accounting would impact chiefly on Medicare recipients. Republicans favor this in theory but insist that the president must come on board rather than demagogue the issue as he has done in the past. A CPI adjustment could save tens of billions of dollars in the march toward a balanced budget.

If a compromise essential to a budget agreement is to emerge this year, the Medicare question must be settled in some definitive fashion. It will take the kind of good-faith effort by both sides that has been absent in recent years from the highly polarized Washington scene. Structural and budgetary changes must be made to avoid a fiscal crisis in Medicare that also threatens Social Security when baby boomers reach retirement age.

Pub Date: 4/10/97

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