For the last two decades, both parties have engaged in a kind of ritual Kabuki dance. The Republicans would sternly vow to slash big government, and the Democrats would righteously protest against throwing old people into the snow. But neither side wanted to touch mushrooming “entitlement” programs; the political consequences were too dire. So the government wallowed ever deeper into debt.
This year, the new Republican majority has made the fame real on Capitol Hill, The budget plans approved by the House and expected to be passed this week by the Senate may not achieve a balanced budget by 2002. But if they are carried out, the GOP plans will eliminate or shrink hundreds of popular programs, from student loans to farm subsidies, The risks of guessing wrong in this political gamble are immense, as both sides demonstrated with their antics and maneuvering.
John Kasich, the chairman of the House Budget Committee, acted like a man who had just awakened from radical surgery surprised to still be alive. Thrilled by an article in The Washington Post that conceded, a bit grudgingly, that the GOP plan to save $1.5 trillion was relatively free of gimmicks, Kasich scurried down the corridor to the office of House Speaker Newt Gingrich. The hyperactive budget chairman wanted to get Gingrich spokesman Tony Blankley’s reaction to the piece. Before Blankley could say a word, however, Kasich declared, “I think it’s great!” and hurried on, satisfied that opinion makers, at least right-thinking ones, were deficit hawks. Other Republicans were equally impressed with their achievement. John Boehner of Ohio, head of the House GOP Conference, compared the moment to landing a man on the moon. Gingrich said the GOP was now “close to complete intellectual triumph” over the Democrats. The speaker, never known for rhetorical modesty, has become so prone to popping off at press conferences that Hill reporters now casually call him “Explodo-Man.”
Having already infuriated countless special interests, the Republicans have nothing to lose by pressing ahead. The seniors lobby, in particular, will angrily attack the GOP’s Medicare cuts (box, page 41). Democrats are in a trickier situation. Liberals counsel class warfare. Last week, at the Democratic caucus, a novice legislator worried aloud that the Republicans had seized the initiative. House Democratic Leader Richard Gephardt calmly reassured him. By proposing cuts in Medicare, Republicans “have laid their hands on the third rail of politics,” Gephardt said. “We’re going to keep them there,” he vowed. At a meeting of Hill Democrats at the White House, Sen. John Breaux of Louisiana suggested that the Democrats join a bipartisan commission to reform the health program, which will go bankrupt by 2002. His colleagues scoffed, arguing that they should let the Republicans take the heat. A White House aide acknowledged to NEWSWEEK that the Democrats were in part playing to the old folks. That’s because they lost the support of many elderly voters in 1994, costing the party control of Congress. In 1996, the Democrats’ Southern strategy is simply to win retiree-rich Florida.
Yet it’s dangerous for Democrats to merely carp. The White House cites polls showing voters believe the GO P is mean-spirited, but they don’t know where Democrats stand on deficit reduction. One senior Clinton economic adviser speaks of waking up every day wondering not whether–but when–the White House will have to produce its plan. Other aides say Clinton may give a speech outlining his overall goals as soon as this week.
The trouble is the Democrats don’t know what to propose. At a meeting with two dozen Democratic lawmakers, Clinton listened as the members of Congress endorsed budget-cutting in principle–then ritualistically defended pet programs for veterans, unions and farmers.
Senate Democrats offered what may be the party’s most promising approach. They want a balanced budget by 2002. But they suggest that rather than give tax breaks to the wealthy, the money should be used for health care and education. Clinton is, as usual, groping for a middle course. He did hearten the get-tough faction in the White House by promising to cast his first veto, of a GOP bill to cut $16.4 billion in spending this year. Aides had worried that clinton was beginning to look more like Millard Fillmore (no vetoes) than Franklin Roosevelt (635 vetoes).
The president’s challenge is to work up a plan to reduce the deficit without hurting all social programs. One answer would be to stretch out the schedule for achieving a balanced budget by 2002–the GOP’s target date. The problem, of course, is credibility. Politicians are always promising to get serious after the next election.
Why should voters believe that Republicans will do any better? Under the House plan, for instance, most of the painful cuts are “backloaded” to occur after the year 2000. The real significance of the GOP initiative is to signal voters that Republicans are serious about cutting government. If voters disagree, they can throw the party out in 1996 and restore Democratic rule. Or they can affirm the Republicans–and establish a permanent political realignment. That’s what makes lawmakers in Washington so excited these days – and nervous.
During the budget season, NEWSWEEK will regularly scrutinize what’s being cut, who’s really affected – and why.
Congressional Republicans propose slashing between $256 billion and $282 billion from Medicare over the next seven years – the largest single cut in the GOP’s blueprint to balance the federal budget.
Would limit care or increase costs for the 40 million senior citizens in the program.
Seniors’ groups, many doctors and hospitals oppose; Democrats believe that Medicare is their best issue to beat the GOP on the budget.
Republicans mortally wounded the Clintons’ health reform last year by convincing Americans the plan would prevent them from picking their own doctors. The conservative group Empower America warned that the Clinton proposal would lead to “rationed care and limits on your choice of doctor and treatment.” This year it’s the GOP that must explain why it wants to “limit” choice.
Republicans deny they would do any such thing–but they have few alternatives. House budget cutters realize the only way to come up with this much in savings is to nudge (or push) seniors into “managed care” arrangements, such as health-maintenance organizations. HMOs are more efficient in part because they restrict which doctors patients can see and refuse to pay for treatments they deem unnecessary. Republicans may try to finesse this problem by getting the HMOs to offer generous benefits to the elderly. But if they do, the government will end up having to pay more – increasing the deficit. The bottom line: if you want savings, you have to restrict choice.
Democrats say Medicare cuts would hurt seniors. But last year, Clinton called for large cuts in the program. In truth, good HMOs know how to limit choice while still delivering high-quality care. So Democrats who now charge the GOP with cruelty for disrupting the doctor-patient relationship are being hypocritical. The irony is they learned this drill from the Republicans.
