Clear Battle Lines Emerge On Budget Issues

After last week's agreement to avert the "fiscal cliff," President Barack Obama and congressional GOP leaders are making clear their positions on tax increases and entitlement spending reductions -- including those to Medicare.

The Associated Press/Washington Post: White House, GOP Draw Red Lines In Debate On US Debt Limit, Vow Not To Budge
Republicans say they are willing to raise the debt ceiling but insist any increase must be paired with significant savings from Medicare, Medicaid and other government benefit programs. President Barack Obama has said he's willing to consider spending cuts separately but won’t bargain over the government's borrowing authority (1/7).

The Wall Street Journal: Battle Lines Drawn On Budget
Many conservative House Republicans opposed last week's fiscal-cliff measure, which raised income-tax rates for the first time in almost two decades and contained no long-term spending cuts of any significance. That bill would reduce the deficit by some $620 billion over 10 years, far short of the $4 trillion in deficit reduction that some leaders had hoped to negotiate. "Now, it's time to pivot and turn to the real issue, which is our spending addiction," Mr. McConnell said Sunday. He said any cuts should target entitlements such as Social Security, Medicare and Medicaid, which Democrats have been reluctant to cut (Gorman and Nicholas, 1/6).

Bloomberg News/The New York Times: Letter From Washington: U.S. Fiscal Talks Made No One Look Good
Tougher still is the substance. House Republicans are all for big spending cuts, though other than some easy ones, including going after programs for the poor, they duck specifics. They are fierce deficit hawks in principle, yet when specific cuts to Medicare, a health insurance program for the elderly, or Social Security, a retirement fund, are raised, they turn into pacifists. And the president, who wouldn't play for keeps when he had the leverage, vows this time will be different. He won't negotiate over the debt ceiling; that would be tantamount, he proclaims, to negotiating with terrorists. Mr. Obama demands that any spending cuts be accompanied by revenue increases (Hunt, 1/6).

The Hill: Sen. Sanders Says He's 'Not Confident' Obama Will Protect Social Security
Entitlement programs must stay off the table in the next round of budget negotiations, Sen. Bernie Sanders (I-Vt.) said. Sanders said he's "not confident" that President Obama will try to protect entitlements — particularly Social Security — during upcoming talks about raising the country's debt ceiling. "Well, we've got to make the president and Republicans and any Democrats that want to cut Social Security an offer they can`t refuse, and that is tens of millions of people have got to make it very clear to Congress -- Social Security has nothing to do with the deficit," Sanders said Friday night in an interview with MSNBC's Ed Schultz (Baker, 1/5).

In other news stemming from the fiscal agreement -

Politico: Hospitals Flex Lobbying Muscle To Bypass Some Cuts
For all the hits the hospital industry took in the final fiscal cliff deal, it managed to persuade Congress to avoid some of the biggest cuts that had been looming over it for years: cuts to outpatient payments, graduate medical education and "bad debt" payments. The hospitals aren't celebrating — Congress still cut the industry elsewhere, and hospital lobbyists insist those savings will be painful. But the fact that hospitals escaped the most widely expected cuts shows that the industry still holds real power with lawmakers (Haberkorn, 1/7).

And, in the background, the expected release of a White House health care expenditures report could highlight trends and cost control ideas -

Reuters: Analysis: Obama May Turn Medicare Reform Into Wider Health Debate
President Barack Obama could seek common ground with Republicans in the looming battle over Medicare spending by broadening the debate over entitlement reform to encompass the spiraling healthcare costs that confront a wide range of Americans. In recent public remarks the president has identified the U.S. healthcare system's sky-high price tag - by far the highest in the world - as a driving force for Medicare reform. The administration is expected to release a report on 2011 national healthcare expenditures on Monday that should further underline well-known trends. In 2010, health spending hovered at almost 18 percent of U.S. gross domestic product. Healthcare experts, including former Obama advisers, say the White House appears to be considering ideas for Medicare, the popular health insurance program for the elderly and disabled, that could become models for the overall health landscape (Morgan, 1/6).

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