Bloomberg News

Durbin Says Deficit-Reduction Talks Can Include Medicare

November 27, 2012

Democratic U.S. Senator from Illinois Richard Durbin

U.S. Senator Richard Durbin, a Democrat from Illinois. Photographer: Andrew Harrer/Bloomberg

Deficit-reduction talks can include savings from Medicare without raising the eligibility age or turning it into a voucher program, said Richard Durbin, the Senate’s second-ranking Democrat.

Still, proposals to address the long-term solvency of Medicare and Social Security shouldn’t be part of the current short-term negotiations to avert the year-end fiscal cliff, Durbin said in remarks prepared for his speech today in Washington. Though he didn’t deliver that portion of his prepared speech, he told reporters he stood by the full text.

“There are savings to be had” in the Medicare program for senior citizens, the Illinois lawmaker said, pointing to changes suggested by a bipartisan commission on which he served in 2010.

Fiscal Cliff Compromise Elusive as Congress Returns

Democrats should take “an honest look at Medicare,” he told the Center for American Progress, a group with ties to his party.

The scope of Democrats’ willingness to consider changes to entitlement programs is a central question in the debate over the so-called fiscal cliff. Republicans, who are expressing new openness to higher taxes, say they will reach a bipartisan agreement only if President Barack Obama proposes changes that would curb future growth in entitlement programs.

“What’s missing is presidential leadership,” Senator Lamar Alexander, a Tennessee Republican, told reporters yesterday. “Maybe that’s excusable during a campaign. It’s not excusable now.”

$607 Billion

Lawmakers are trying to reach an agreement to prevent many of the $607 billion in tax increases and spending cuts from occurring in January. Many in Congress also want to use the fiscal-cliff debate as an opportunity to cut projected budget deficits over the next decade.

Durbin said he opposes Republican proposals to increase the eligibility age or offer senior citizens vouchers to buy health care on the private market.

Durbin emphasized that higher taxes are an essential part of deficit reduction, and said Congress also should trim defense spending and farm programs.

Democrats, at a Nov. 16 meeting with Obama and Republicans, discussed the possibility of short-term savings from entitlement programs in a deal to avert the fiscal cliff.

Retirement Age

Unlike some other Senate Democrats, Durbin has been willing to consider significant changes to entitlement programs. He voted in 2010 to endorse the report of the fiscal commission led by Republican Alan Simpson and Democrat Erskine Bowles, which called for gradually increasing the retirement age for Social Security.

Since 2010, he has been working with Republican senators such as Tom Coburn of Oklahoma and Mike Crapo of Idaho on a bipartisan deficit-reduction plan based on the Bowles-Simpson principles.

“I think that I have a role to play and a voice to add that isn’t going to be there otherwise,” he said.

Durbin called today for a commission in 2013, outside of fiscal cliff and deficit-reduction discussions, to examine Social Security and ensure the program still has 75 years of solvency.

“Small changes made today in Social Security will play out over the long run to buy us solvency for a long period of time,” he said.

Outlining Principles

In his speech, Durbin also outlined principles for Democrats to follow when negotiating a deficit-reduction agreement with Republicans. Democrats and their allies control 53 seats in the 100-member Senate this year and will have 55 seats in 2013. Republicans can use procedural moves to block Democratic proposals.

Any deal should retain or enhance the current progressivity in the tax code, protect anti-poverty programs and make investments in infrastructure, energy and education, said Durbin, 68.

“There are no grand visions ahead about infrastructure and there should be,” he said, suggesting a special revenue source to pay for projects. “We just can’t reach this point where we’re mindlessly cutting right and left. There are some things that do create jobs and growth and opportunity in our economy.”

Senator Mitch McConnell of Kentucky, the chamber’s Republican leader, said Democrats need to prepare their constituents and supporters for tough decisions.

“So as we move into the final stretch, it’s time, as I’ve said, to put the talking points away and get real,” he said today. “The first step to recovery is to admit you’ve got a problem. And if borrowing more than 40 cents for every dollar you spend doesn’t convince you you’ve got a spending problem, frankly, I don’t know what will.”

To contact the reporter on this story: Richard Rubin in Washington at rrubin12@bloomberg.net

To contact the editor responsible for this story: Jodi Schneider at jschneider50@bloomberg.net


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