Will Republicans Try to Privatize Medicare in 2017?

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Her Medicare benefits are probably safe. But what about those of her children and grandchildren? Photo: Jahi Chikwendiu/The Washington Post/Getty Images

So will they or won’t they go after Medicare? By “they” I mean the Republicans, who in January will assume the controls of the entire federal government, perhaps quickly attempting a legislative blitz.

We know for a fact that most Republicans have been looking at Medicare with bad intent for many years, dating all the way back to Ronald Reagan’s barnstorming against the program before it was enacted. Changing Medicare from a guaranteed health-care-benefit program into one that offers “premium support” for private insurance (though grandfathering current seniors and near-seniors, and in the latest iteration letting people opt to stay in the current system for a while) has been a regular feature of all those Paul Ryan budgets passed by the House since 2011. Moreover, as my colleague Jonathan Chait reported earlier this week, House Budget Committee chairman and long-time health-policy opinion-leader Representative Tom Price has blandly asserted that Republicans might toss Medicare vouchers into the fast-tracked, filibuster-proof budget reconciliation bill they are putting together to enact their post-Obama agenda.

Talking Points Memo’s Josh Marshall sure thinks Republicans are headed that way: He’s ginning up another campaign to force individual members of Congress to take a position on Medicare vouchers (or, as he calls it, a Medicare phase-out), in hopes of making them run for cover as they did during a similar campaign in 2005 against George W. Bush’s Social Security partial-privatization scheme. Paul Krugman has sounded the alarm, too, predicting that Donald Trump and his party will betray their white working-class supporters by going after a program Trump promised to protect.

But while there’s smoke, so far there’s no fire indicating that Medicare is on the chopping block. Let’s look at the arguments, pro and con, for Republicans taking this fateful step:

Yes, they’ll do it because there’s no time like the present. Republicans are acutely aware of what Barack Obama was and was not able to accomplish in the two short years when Democrats controlled the White House and both congressional chambers. Such moments of undivided “trifecta” control have been rare in the last few decades. Any legislation that doesn’t pass quickly may never pass. And with Republicans now talking about doing an initial round of budget reconciliation legislation in January (it would normally be much later in the year), it’s possible that including big changes in Medicare might be passively accepted by the incoming Trump administration; at that point, they’ll still be looking for the keys to the executive washrooms. Speaker Paul Ryan, for whom messing with Medicare is a major career objective, could decide the legislative equivalent of football’s hurry-up-no-huddle offense is the right way to go. One could also argue that nestling Medicare vouchers in a bill containing a full or partial repeal of Obamacare will distract attention from the long game Republicans are playing.

No, they won’t do it because they have bigger fish to fry. While the idea of putting Medicare (and ultimately Social Security) on the road to Palookaville may warm the hearts of many Republicans as they drift off to sleep at night, more immediate priorities include another big upper-end tax cut to keep the donors happy, a big defense-spending increase, the decimation of low-income programs whose beneficiaries didn’t vote for them, and, of course, the destruction of Obamacare. Tossing a highly controversial Medicare overhaul into that mix will arouse a new and very large set of potential opponents and risk the whole enchilada.

Yes, they will do it because they need the budget savings to pay for their other stuff.
Paul Ryan didn’t begin pursuing Medicare “reform” just because he want to go down in history as the man who put the Great Society programs to sleep. Cutting benefits saves a whole lot of money, particularly down the road when the gap between health-care inflation and voucher funding levels declines, and fewer and fewer people are grandfathered. Finding Medicare savings is especially urgent if Obamacare is repealed, since that initiative had multiple provisions aimed at Medicare (and overall health-care) cost containment. Every dollar not taken from Medicare could come from the hide of a tax-cut beneficiary, a defense contractor, or some other worthy and hungry mouth that needs feeding.

No, they won’t do it because it directly hits Republican constituents and violates Republican promises to them.
You probably remember Donald Trump saying emphatically during the GOP presidential nominating process that he differed from the other birds on the debate dais because he was opposed to any benefit cuts for Social Security and Medicare. Think back a bit longer, and there was 2012 vice-presidential nominee Paul Ryan promising to protect his mother’s Medicare benefits from mean old Barack Obama, who wanted to take them away and give them to Obamacare recipients. Beyond these very specific promises, Republicans understand their own base is really, really going to dislike Medicare cuts. That’s why GOP lawmakers usually only propose them as part of some giant budget “Grand Bargain” with Democrats, wherein the opposition offers them bipartisan cover for this fateful step. And messing with Medicare is one of the few things that could convince a significant number of Republican House and Senate members to vote against the entire budget. Why risk that?

There’s one final set of arguments down in the weeds of congressional mechanics.

No, they won’t do it because you can’t restructure a whole program using a budget-reconciliation bill.
That is indeed normally the case: The Congressional Budget Act limits actions taken under its procedures to spending and revenue measures germane to enacting and enforcing budget decisions. But:

Yes, they will do it, because they make the rules.
The only real way to stop non-germane provisions in a budget bill is by a ruling of the Senate parliamentarian. Guess who that functionary works for? You got it!

Now, it’s also possible Republicans could decide not to do it now but to do it later. As noted above, the strategy congressional Republicans are currently mulling over is to enact not one but two budget-reconciliation bills in 2017. Budget maven Stan Collender explains:

As of now, Congress is expected to adopt a budget resolution for fiscal 2018. But because that probably won’t occur until late May or early June, the reconciliation wouldn’t be completed until September.

That would mean that much of what the leadership wants to do quickly and Trump promised would happen in the first 100 days of his administration wouldn’t occur until very late in the year.

To deal with this, the leadership is seriously considering having the House and Senate start the next session of Congress with the House and Senate adopting a fiscal 2017 budget resolution in January, that is, a half year or so earlier that the 2018 budget resolution. The reconciliation bill that would result would likely be enacted by the end of the month.

That procedure would let Republicans pursue a now-and-later strategy. Quite likely, they’d decide to put into the first big bill things that Trump promised to do (such as Obamacare repeal) along with initiatives that are relatively popular (such as tax cuts). Then if everything works out and the whole country isn’t marching in the streets demanding a recount on the 2016 elections, the administration and congressional leaders can bring their unfinished business forward in that second bill. Whether or not it works, it’s a great way to kick the can down the road for a bit.

My money’s on this last option, particularly if Marshall and Krugman and potentially vulnerable Republicans in Congress combine to create a difficult atmosphere for going after Medicare right away. But make no mistake: Sooner or later they’ll be back to the well — certainly so long as Paul Ryan is around.

Will Republicans Try to Privatize Medicare in 2017?