In today’s Health On The Hill, KHN’s Mary Agnes Carey talks with The Fiscal Times’ Eric Pianin about the Gang of Six, negotiators seeking consensus on deficit reduction plans. The group lost a member this week after Sen. Tom Coburn left talks Tuesday over proposed cuts to Medicare, potentially leaving them overshadowed by other similar efforts, like one headed by Vice President Joe Biden.
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Read the transcript:
MARY AGNES CAREY: Good day. I’m Mary Agnes Carey, and this is Health On The Hill. Republican Sen. Tom Coburn has announced he’s leaving the Gang Of Six, a bipartisan group of senators who’ve been meeting for months in hopes of reaching a deal in how to reduce the federal deficit. What does Senator Coburn’s departure mean for the larger debate on entitlement spending, including Medicare? With us today to discuss those issues is Eric Pianin of The Fiscal Times. Hi, Eric. Thanks for coming in.
ERIC PIANIN: Hey, Mary Agnes. It’s great to be here.
MARY AGNES CAREY: Thank you. Let’s start a little bit with the Gang of Six. Who are they, and why are people paying so much attention to them?
ERIC PIANIN: They are a group of six Senate members — three Republicans, three Democrats — including several who served on the president’s Fiscal Commission. They’re important because the group includes three conservative Republicans who have been willing up until now to talk about the possibility of raising tax revenues as well as cutting spending to try to achieve long-term deficit reduction. Everyone’s talking about trying to cut into the deficit by $4 trillion over the next decade to twelve years. And Republicans have been focusing spending and entitlements. Democrats have been arguing that it has to be mix of the two. What’s so unusual about this group, is we had three very conservative members — Tom Coburn, Saxby Chambliss, Mike Crapo — who by any test are arch-conservatives, willing to talk about revenues.
MARY AGNES CAREY: So why did Sen. Coburn leave, and what does his departure mean for the future of these negotiations?
ERIC PIANIN: Well, I think that his departure is very significant, because it’s kind of a blow to hopes for some kind of a bi-partisan settlement of these budget negotiations. As you know, the Treasury’s bumping up against the $14.3 trillion debt ceiling. By August 2, the fear is that the government will begin to renege on its financial commitments to its creditors. Something has to be done to raise the debt ceiling. Republicans are saying the only way we’re going to do this is if we link that action to some major deficit reduction plan. What a lot of people thought at first, at least, was that the Gang Of Six would be an ideal vehicle for this kind of negotiation. But I think what we’ve found is sort of the limits to what a group of six senators — and I emphasize senators, not members of the House of Representatives — can do, especially when they don’t necessarily have the support of the Republican leadership in the Senate as well as Republican leadership in the House.
MARY AGNES CAREY: Now reportedly Sen. Coburn left the negotiations in part over a dispute about Medicare. I think he wanted some immediate cuts for Medicare beneficiaries, which Democrats oppose. Tell us a little bit about the role of entitlements in this debate over deficit reduction, and how do Republicans and Democrats resolve — they have very strong philosophical differences in these programs. How will those resolve themselves in this debate?
ERIC PIANIN: I think everybody who has looked at the whole issue of long-term spending realizes that entitlement programs — and that includes Social Security and Medicare and Medicaid — are basically spending out at an unsustainable rate. Social Security, probably not so much. Medicare, Medicaid: Definitely big, big financial problems down the road. I saw a statistic somewhere that over the last ten years, spending on health care for seniors has increased 127 percent, and it’s continuing at this rapid pace as our population becomes older and older, and Baby Boomers retire and start drawing down on these benefits. So any kind of long-term plan has to include major entitlement reforms — Medicare in particular. As you know, the health care reform legislation includes a number of steps that try to bend the cost curve, slow the rate of growth, but that’s not enough. I think everybody agrees that there’s much that has to be done on Medicare. So that’s why Coburn and others are focusing on that. But Democrats are willing to go just so far in making additional cuts, again without getting some concessions on taxes and other areas.
MARY AGNES CAREY: Tax increases, right. They’re pushing for those.
ERIC PIANIN: And so, according to reports in the last week or so, Coburn was pushing very hard for more and more spending cuts, including in Medicare — sort of going well beyond what the consensus of the group was. And I think he finally announced or concluded that, why bother talking anymore. We can’t get any further on this issue.
MARY AGNES CAREY: And so, does this development in the Gang Of Six shift more attention — and more pressure — to a separate panel that’s now being convened by Vice President Joe Biden to talk about deficit reduction. Can you tell us a little bit about where those negotiations stand, and now maybe there’s new importance there to watch.
ERIC PIANIN: President Obama urged House and Senate leaders to provide representatives to yet another gang, or another small group of six lawmakers, but this bicameral. This is from the House and the Senate, not just the Senate.
MARY AGNES CAREY: And bipartisan, right?
ERIC PIANIN: And bipartisan. And so, they’ve met three times so far in the last several weeks. Joe Biden, the vice president, is the chairman, the overseer of this. Biden has a long history of successful negotiations. And indeed just last December, he and Mitch McConnell, the Republican leader in the Senate, negotiated a major spending cut deal that also provided some stimulus spending to deal with the economic problems. So, Biden and Mitch McConnell have a relationship of sorts and the hope is that they may be able to do some more business down the road. I think we have to be realistic. There’s just so much that these small task forces or groups can do. I think the most important thing is that they identify areas of commonality where the White House and Democrats and Republicans can find some common ground. But eventually, as we all know, these big decisions have to be made at the top. That means the president; that means John Boehner, the speaker of the House; that means Mitch McConnell, the Republican leader in the Senate and Harry Reid the Democratic leader of the Senate.
MARY AGNES CAREY: So as you’ve noted, Republicans are unwilling to vote for a debt ceiling increase until they see some major concessions on spending. And we’re facing in August, the second deadline – and of course Congress likes to leave town in August for a month or so – so, do you think we’re looking at one comprehensive vote on the debt ceiling before that August break that encompasses all these areas, or are we going to see a series of votes? And every time we see a series of votes, both sides try to get another concession out of the other?
ERIC PIANIN: It seems as if it’s quite possible that they may have to do some kind of a short-term extension of the debt ceiling. But, if they do that, Republicans still are going to demand something. There’s been a lot of talk about sort of returning to the idea of budget enforcement mechanisms.
MARY AGNES CAREY: Triggers?
ERIC PIANIN: Yes, establishing some global spending cap and then automatic triggers to do across the board spending cuts if Congress can’t pull its boots up and make the cuts itself. This is a very popular idea at this point. Just about everyone is talking about it, including the president. So, I wouldn’t be surprised if we saw eventually a vote to raise the debt ceiling linked to one of these cap and trigger ideas. It may be that they have to do short-term legislation to raise the debt ceiling to buy more time in order to work things out. This is very complicated. You know, you can’t cobble together a global budget dealing with health care reform and taxes and tax reform and all this stuff in a matter of weeks. And you really shouldn’t, so I wouldn’t be surprised if there’s some intermediate step that buys them a little more time. But, I think, when all is said and done, the Republicans will extract major compromises from the Democrats. There will be some major budget legislation down the road.
MARY AGNES CAREY: Well, you’ve given us a lot to think about. Thanks again, Eric Pianin, The Fiscal Times.
ERIC PIANIN: My pleasure.
