Republicans stick to plan to privatize Medicare

Reuters News
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Posted: May 25, 2011 5:54 PM
Republicans stick to plan to privatize Medicare

By Thomas Ferraro and Donna Smith

WASHINGTON (Reuters) - Republicans on Wednesday stuck by their plan to privatize the Medicare federal health insurance program for the elderly despite a rebuke from voters in a special congressional election in New York state.

"We can no longer let politicians in Washington deny the danger to Medicare -- the danger is all too real, and the health of our nation's seniors is far too important," Paul Ryan, the Republican chairman of the House of Representatives Budget Committee, said in an Internet video.

Democrats on Tuesday won a vacant House seat in a district in upstate New York, a traditional Republican stronghold, by turning the special election into a referendum on the plan pushed by Ryan to privatize Medicare.

Democrats aim to ride a public backlash against the Republican plan into the 2012 presidential and congressional elections just as Republicans capitalized on President Barack Obama's unpopular healthcare law in last year's congressional elections.

The Democratic-led Senate, on the offensive, planned to force a vote later on Wednesday on the Ryan plan, which was passed last month by the Republican-led House.

Yet Republicans ratcheted up efforts to build support for the Ryan plan, warning that bold action is needed to save Medicare from financial ruin.

"We aren't going to abandon this," a senior Republican aide said. "We want to save Medicare, while Democrats would let it die. Those must be the first words out of our mouths from now on: 'We want to save Medicare.'"

Republicans acknowledge they will need to make a better public case for their plan.

Ryan's proposal would phase out traditional fee-for-service Medicare and create a voucher-like system for future retirees to purchase subsidized coverage from private insurers.

Healthcare has long been a volatile and high-stakes issue in Washington because it touches all Americans and involves trillions of dollars and a crush of special interests.

Democrats argue that the healthcare reform law signed by Obama last year will save Medicare billions of dollars in wasteful spending while improving care quality.

'A POTENT ISSUE'

Jennifer Duffy of the Cook Political Report, a nonpartisan publication that tracks congressional races, said it is "dangerous to read too much" into the New York election."

"Republicans would be foolish to ignore the result," she said. "Medicare is a potent issue that they need to pay attention to. If Republicans don't tweak or abandon the Ryan plan, they need to communicate it better."

In the Senate vote on Wednesday, at least three of the 47 Republicans in the 100-member chamber were expected to join Democrats in rejecting it -- Senators Scott Brown, Susan Collins and Olympia Snowe.

Dan Ripp of Bradley Woods, a private firm that tracks Congress for institutional investors, said Republicans are standing firm because "enough of them understand that the system is broken, and they see this as the best alternative."

It remains unclear, however, if the eventual 2012 Republican presidential nominee will embrace the Ryan plan. One Republican hopeful, former House Speaker Newt Gingrich, called it radical but then, under fire, backed off his criticism.

Representative Steve Israel, head of the House Democratic campaign committee, mocked the Republican attempt to rally support for the plan.

"If Republicans want to double down on their effort to end Medicare to fund tax cuts for big oil, they do so at their own peril," Israel told Reuters.

Israel said Democrats plan to target 97 Republican-held House districts that are more Democratic-friendly than the New York district. That includes 61 House Republicans in districts won by Obama in 2008.

"I'm not saying we can win all of them, but I'm saying there are 97 Republicans who lost sleep last night," Israel said.

Israel fended off Republican criticism that Democrats refuse to even address Medicare's financial woes. The program faces increasing financial strains from rising healthcare costs and an aging baby boom generations.

(Editing by Ross Colvin and Will Dunham)