GOP Calls on Clinton to Lead Medicare Reform

The new Congress has yet to be sworn in, but its Republican leaders are already vowing to stick with the popular (and undelivered) promises of the old one--balancing the federal budget and cutting taxes--without putting their political necks on the chopping block over changes in popular benefit programs.

Still bruised from past battles with President Clinton, two prominent GOP leaders--Senate Majority Leader Trent Lott of Mississippi and House Budget Committee Chairman John R. Kasich of Ohio, said in television interviews Sunday that they would leave it to the president to take the first delicate steps toward reforming Medicare.

Lott, speaking on “Fox News Sunday,” criticized Clinton for not being “totally forthcoming” about Medicare’s problems and how to fix them. “We have an obligation to have our own agenda,” he said, “but I think we owe it to the president to give him the opportunity to state his position first, and then we’ll see where they merge.”

In late 1995, without waiting for Clinton, the activist, GOP-led Congress tried to push through a budget bill that included broad tax cuts and spending reductions in several hot-button programs. These included cutting the projected growth of Medicare, the health insurance program for the elderly, by $270 billion.

Clinton refused to sign the bill, forcing a government shutdown, and both the shutdown and the proposed Medicare changes came back to haunt the Republicans throughout this year’s election campaign. “We have been the subject of great demagoguery on the whole Medicare issue,” Kasich complained Sunday on NBC-TV’s “Meet the Press.”

Tax cuts will be at the head of Congress’ agenda when the new session begins next month, both Lott and Kasich said. But while both parties have been talking about a new era of bipartisanship, it remains clear that they will disagree on precisely which taxes to cut, and by how much.

“I think tax cuts are very important,” Lott said, but he added, “We are not going to be able to do as much in that arena as I would like to. . . .” He said he believes Congress will be able to pass tax cuts for families with children and for educational expenses, and he noted that he would like to conduct “serious hearings on where we go from there in terms of real tax reform.”

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Both Lott and Kasich reiterated the Republicans’ traditional call for a cut in the capital gains tax. But Treasury Secretary Robert E. Rubin, also speaking on “Meet the Press,” suggested that the Clinton administration would resist that.

“Our priorities are on middle-class tax cuts focused on education and child care and savings . . . ,” Rubin said. “If they insist on a capital gains tax cut . . . that’s one of the items that we will have to have in our ultimate negotiations.”

Another controversial issue will reemerge in coming weeks when a federal advisory commission is due to make suggestions on how to save the Social Security system, including whether workers might invest some of their Social Security taxes in the stock market. Lott seemed eager to take that issue out of Congress’ hands.

“I think we need to do whatever we do in a careful way,” he said. “Do it for the sanctity of the program, not for budgetary purposes, and that you should have a very carefully selected, bipartisan, blue-ribbon commission to do it in the cool of the night, not the heat of the day.”

Projections indicate that starting in 2012, as baby boomers begin retiring, the system will be paying out more than it takes in each year. Unless changes are made, it will go broke by 2029.

One answer to the Social Security problem--and the federal budget deficit--might be to cut back the annual cost-of-living increase in the benefits paid to recipients. A group of economists suggested last week that the increases are typically 1.1 percentage points too high because they are pegged to the consumer price index, which the group said overstates inflation.

Although changing the CPI--and cutting the size of the cost-of-living adjustment--would entail huge political risk, Kasich urged action.

“It’s the right thing to do,” he said, “and at the same time it could have a profound impact in terms of the future of our economy.”

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But he added that Congress was not prepared to try to make the changes alone.

“The ball is in the president’s hands. . . . We’re willing to work with him, and this is an opportunity for him to show real leadership. I hope they don’t blow this chance.”

Rubin said it is broadly accepted that the CPI is an “imperfect measure” of inflation and that the administration is open to changing it after technical analysis and “broad-based agreement” between the parties.

Times wire services contributed to this story.