As President Barack Obama presented his vision for deficit reduction Wednesday, he took an evolutionary rather than revolutionary approach, saying he wanted to work with Congress to preserve the current structure of Medicare and Medicaid but make the programs more efficient.
The reaction to Obama's remarks fell predictably along partisan lines. Republicans criticized the president for not going far enough to detail how he would control health care costs. Democrats praised Obama's promise to defend entitlement programs while working with Republicans to reduce spending and control the growing federal deficit.
In his speech at George Washington University, Obama laid out broad goals with few specifics. To help reduce health care spending he would give the Independent Payment Advisory Board, a controversial panel created in the health law more power to reduce Medicare expenditures. Obama also called for changes in how much the Medicare program pays for prescription drugs, a proposal analysts said is sure to draw opposition from the pharmaceutical industry.
Obama pledged to work with governors to make the Medicaid program more efficient and accountable without adopting the block grant approach advanced earlier this month by House Budget Committee Chairman Paul Ryan, R-Wis. Here's a sampling of edited reactions to Obama's speech:
Kavita Patel, a former Obama administration official who is now at the Engelberg Center for Health Care Reform at the Brookings Institution.
"I thought [the Independent Payment Advisory Board] would be out of favor after awhile and now it's back with a vengeance. I think the big takeaway might be the IPAB and I really think the bigger takeaway is that [Obama is ] sending a strong signal, especially to the Republicans, that he’s still really emphasizing health delivery reform."
Ross Baker, political science professor at Rutgers University.
"Compared to the boldness of the Ryan plan this is obviously a much more nuanced approach to the problem but politically, of course, a very prudent [one]. I think that the belief on the part of the White House is they’ve lured the Republicans out of their cave, whereas Obama is still very much protected and not making any rash promises to make severe cuts in any major entitlement program other than to eliminate fraud and give more power to the Medicare review board."
Grace-Marie Turner, president of The Galen Institute, a conservative, free-market research group.
"The only way to make Medicaid more flexible, efficient and accountable is to give states both the resources and incentives to better manage spending through block grants that allow them to cut through mountains of federal red tape. [Obama] refuses to give governors real power to manage their Medicaid programs even as his new health law threatens to crush states with more than $110 billion in new spending from [the law’s] mandated coverage expansions."
Jim Capretta, fellow at The Ethics and Public Policy Center, a conservative think tank.
"It was so partisan and so badly received. Clearly he … just wants to try to position himself better, vis-à-vis the Ryan plan and posture politically for 2012 so he's not going to get a deal." Giving the Independent Payment Advisory Board more power to reduce Medicare rates, which Capretta says are already too low, will "start jeopardizing access to care for the patients and so it’s just it doesn’t make any sense."
A. Barry Rand, chief executive of AARP (from a statement).
"We applaud the president's commitment to oppose plans that shift costs to seniors, but we are concerned that some provisions of his plan have the potential to break that promise. Relying on arbitrary spending targets is not a good way to make health policy—especially when decisions may be left to the unelected and unaccountable. Instead of setting targets that could further jeopardize people in Medicare, we urge the president and lawmakers to build on measures that would lower health care costs throughout the health care system."
Robert Kocher, director of the McKinsey Center for U.S. Health System Reform and formerly a special assistant to Obama for health care and economic policy.
"I think he was trying to signal that there are many, many ways to achieve deficit reduction and that he realizes this is going to be a negotiation with Congress. He can offer a philosophical way to get there. But he is going to defer – as he did on health care – to the Congress to figure out the actual mechanics. I think what he was most emphatic about is that there has to be a combination of revenues and cuts, and on the entitlement cuts finding ways to improve the productivity of the programs and to evolve the way the programs are working, which the IPAB does every year. It’s basically evolution of Medicare. That he prefers that to fundamental restructuring."
Dan Mendelson, chief executive officer of the consulting firm Avalere Health.
"I thought [Obama] made his point and the point is we can have an entitlement program and it can work. This is the first round in a massive, rhetorical debate that will spill over into the election. Should we have an entitlement program or should we have a defined contribution program? That is the debate."
David Kendall, senior fellow for health and fiscal policy at Third Way, a centrist policy group.
"I wish he had done more to show how he was meeting Republicans more than half way. That's the real story here. … You don’t see the president get angry very often. He did get angry when he talked about the Ryan budget. … When you sit down and look at the numbers this opens the door to cutting a deal this year. Who would have guessed that was even possible? It may not happen but this is a huge development."
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