Bloomberg News

Van Hollen Would Weigh Medicare Cuts as Part of Tax Deal

February 16, 2013

Democrats Willing to Consider Medicare Cuts, Van Hollen Says

Doctors, nurses, and administrators protest Medicare cuts in Florida in this file photo. Photographer: Lannis Waters/Palm Beach Post/Zuma Press

U.S. Representative Chris Van Hollen scoffed at House Majority Leader Eric Cantor’s recent bid to remake the Republican Party as little more than public relations while expressing a willingness to consider one Republican proposal to restructure Medicare.

“I saw some new words and sort of a softer image, saying things like ‘we’ve got to smile more,’” yet “you’ve got to change the product, not just the salesmanship,” Van Hollen said in an interview on Bloomberg Television’s “Political Capital With Al Hunt,” airing this weekend.

Still, the top Democrat on the House Budget Committee said he’s willing to consider combining Medicare’s Part A and B, which pay for hospital and doctors’ services, to wring inefficiencies out of the health-care program for the aged. “I would not say ‘no’ off the cuff to that kind of idea,” Van Hollen said.

The Maryland congressman expressed disappointment with President Barack Obama’s new advocacy group Organizing for Action’s reported unwillingness to publish a comprehensive list of its financial donations.

“I would urge them to have disclosure,” he said. “Everybody should be disclosing.”

Van Hollen predicted that $85 billion in spending cuts, called a “sequester,” scheduled to begin March 1 will take effect, at least temporarily, before Republicans agree on a compromise plan.

‘Enough Pain’

“My gut feeling is that they will not compromise before March 1 and then the question is, once the sequester begins to kick in, whether there will be enough pain for them to agree they have to compromise,” he said.

Echoing Obama’s State of the Union address, Van Hollen said Democrats are willing to consider hundreds of billions of dollars in Medicare cuts under the right circumstances. Any reductions would have to be paired with tax increases on the wealthy, he said.

“It is totally unfair to consider asking somebody who has a median income of $22,000 on Medicare to see some change when you’re not asking millionaires to pay the same effective rate as their secretaries, applying the Buffett rule,” he said, referring to a proposed minimum tax, named for billionaire investor Warren Buffett, on those with the highest incomes.

While Democrats have opposed House Budget Committee Chairman Paul Ryan’s proposal to revamp the $600 billion Medicare program by giving future seniors vouchers with which to buy private insurance, Van Hollen said he’s willing to consider different changes.

Medicare Changes

In a speech last week at the Washington-based American Enterprise Institute, Cantor, a Virginia Republican, called the division between Medicare’s Part A and B “arbitrary.” He said lawmakers could “modernize Medicare so it isn’t so complicated for seniors or health-care providers and make it easier for them to get the care they need in a cost-effective manner.”

Van Hollen agreed “there may be ways to do it and make the program, overall, more efficient” though “the devil is entirely in the details.” Lawmakers considered the idea last year as part of the deficit negotiations led by Vice President Joe Biden, he said.

Van Hollen also said he’s willing to consider clamping down on “Medigap” supplemental policies that some experts blame for increasing Medicare costs because, by covering some of the program’s cost-sharing requirements, they give beneficiaries less reason to consider the price of their care. Democrats also want to require pharmaceutical companies to offer bigger rebates on drugs sold through the government, said Van Hollen.

Immigration Measure

On immigration, Van Hollen predicted that House Speaker John Boehner would allow a vote on a bill if it first gets through the Senate, even if it doesn’t have the support of a majority of House Republicans.

“There are enough voices in the Republican caucus in the House that would insist on bringing that bill to a vote, along with Democrats and the public,” he said. Any plan ought to include a way for undocumented immigrants to become citizens, he said.

“Otherwise, you end up with a system where you have sort of, you know, two classes of people in this country,” Van Hollen said.

Obama supporters set up Organizing for Action to help push his second-term legislative agenda.

As a “social welfare” advocacy group -- like the Republican-leaning Americans for Prosperity and other groups Obama has criticized as shadowy -- it isn’t legally required to disclose its donors.

Advocacy Group

The group says on its website it “will make full and regular disclosures over the course of the year of donations received.” The information will be posted periodically, though the schedule hasn’t been determined. It’s also unclear how specific the group will be in linking names with dollar amounts.

The Los Angeles Times reported the group will list donors by the general size of their contributions while stopping short of saying exactly how much each gave. The group didn’t respond to a request for comment.

Van Hollen, who’s pushing legislation to require more disclosure of political donations, said transparency will come when Congress changes the law.

“People say that, you know, they want to play by the same rules, which is why we should change the rules,” he said. “Then everybody would be required to tell the American people who’s funding these campaigns and these ads.”

To contact the reporter on this story: Brian Faler in Washington at 1919 or bfaler@bloomberg.net

To contact the editor responsible for this story: Katherine Rizzo at krizzo5@bloomberg.net


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