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Cliff Deal Turns the Screws on Boehner and the GOP

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Boehner must appease colleagues who are eager to shrink the size of the federal government, while not downsizing entitlement programs such as Medicare in a way that invites a voter backlash.

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And that's where government insurance programs such as Medicare and Medicaid-right now about 20 percent of the $3.8 trillion budget-becomes a stumbling block. When the GOP rules out major tax increases and reduced military budgets, these programs become the major source of savings. And as baby boomers retire and receive government-backed health insurance, they're also the main drivers of the deficit.

The budget passed by House Republicans essentially attempted to delay the day of reckoning. As crafted by their vice presidential nominee, Wisconsin Rep. Paul Ryan, it tames Medicare growth by transforming it into a voucher-style program for new retirees beginning in 2023. Almost all of the savings from Ryan's "premium support" approach would begin to accrue 20 years from now, almost a decade after the end of the 10-year timeline being discussed by Obama and Boehner.

This approach has been endorsed by Ohio Congressman Jim Jordan, who as the outgoing chairman of the Republican Study Committee was among the conservatives who voted against the agreement last year to increase the government's borrowing authority.

Jordan views the gridlock with Obama as sanctioned by the Founding Fathers and favors letting the fiscal cliff's $109 billion in reductions to defense and domestic programs go through ("The only thing worse than defense cuts are not cuts at all"). He also typifies the conservative perspective that the government would squander more tax revenues: "This is Charlie Brown, Lucy and the football. Just raise taxes and we'll get more revenue now and we promise that we'll cut spending next year. I always tell folks back home, 'Remember this is a promise from politicians.'"

Yet Jordan would rather ease into transforming Medicare, since the government ought to honor the promises it has made.
"People made their savings and investment decisions based on a certain set of rules," Jordan told The Fiscal Times. "It would be unfair to change the rules of the game. Common sense and decency."

When pressed about possible Medicare reductions at a news conference last week, Boehner responded by saying that "there are plenty of specific proposals" in the Ryan budget. The speaker chose not to explain the difficulty with the savings starting in 2023 compared to the next few years, adding , "The debt crisis that we face requires us to make serious decisions and it requires us to make those decisions now."

Fellow Buckeyes on Capitol Hill criticized the Ryan budget because entitlement savings need to be recognized sooner rather than later in an agreement with Obama.

"His budget was not a big deal," said Rep. Steven LaTourette, R-Ohio. "His budget was more of a political statement than anything else. And that's great. That's what budgets do around here, but this deal is not a budget, it's a deal and it has to include everything."
But when LaTourette advocates reductions now, he has one advantage over his peers. He retires from Congress in a month.
Editor's Note: This article by Josh Boak and Eric Pianin originally appeared on The Fiscal Times.

For more from The Fiscal Times:


How Bad Will the Economy Be in 2013?

Great Expectations for Carney at the Bank of England

The Diminishing Role of the US in the Middle East


Follow The Fiscal Times on Twitter @TheFiscalTimes.
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