Bloomberg Anywhere Remote Login Bloomberg Terminal Demo Request


Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.


Financial Products

Enterprise Products


Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000


Industry Products

Media Services

Follow Us

Republicans Eyeing Run Against Obama Back Medicare Revamp

Republicans considering running for president were quick to embrace House Budget Chairman Paul Ryan’s plan to shrink the U.S. budget deficit, a blueprint likely to frame the debate over federal spending heading into next year’s elections and spur Democratic attacks.

The proposal released yesterday by Ryan, a Wisconsin Republican, would cut more than $6 trillion over the next decade from Medicare, Medicaid, food stamps and scores of other programs. It calls for the biggest overhaul of federal benefits since President George W. Bush’s failed 2005 attempt to reshape Social Security.

With Democrats controlling the Senate, Ryan’s plan stands little chance of becoming law. Still, the Republican wager that voters will accept the push for deep spending cuts and a restructuring of government health-care programs in exchange for long-term fiscal stability could put the party’s candidates in a perilous position, said Stanley Collender, managing director of Qorvis Communications and a former congressional budget analyst.

“This is one of the real nightmares for a presidential candidate,” Collender said. “Medicare is every bit as toxic as taxes.”

Potential 2012 Republican presidential candidates applauded Ryan’s plan, even as they avoided commenting on its details.

‘Real Leadership’

“The American people finally have someone offering real leadership in Washington,” Minnesota Governor Tim Pawlenty said in a statement. “We must get our fiscal house in order with real spending cuts and with real structural reforms that stop the spending spree before it bankrupts our country.”

Former Massachusetts Governor Mitt Romney, another potential 2012 candidate, said Ryan is “setting the right tone for finally getting spending and entitlements under control.”

Sarah Palin, the former Alaska governor and 2008 Republican vice presidential nominee, used her Twitter account to say: “There is hope! Serious & necessary leadership rolls out serious & necessary reform proposal. Good start.”

Representative Michele Bachmann of Minnesota praised the plan for being “focused on job creation and debt reduction, the two key issues that the American people sent us here to address.” She also said it is “proof” that the House Republican majority “is heeding the calls of the American people to cut spending.”

Mississippi Governor Haley Barbour, who has taken steps to heighten his national profile, joined in a letter with other Republican governors that called Ryan’s proposal “bold.” The plan would give them “freedom to innovate, share best practices, and create cost-effective ways to deliver quality health care to our most vulnerable populations,” the letter said.

Primary Voters

John Feehery, who from 1999 to 2005 was the top spokesman for then-House Speaker Dennis Hastert, an Illinois Republican, said the prospective presidential candidates need to praise the plan because it is in line with the views of many of those who will determine the party’s nominees.

“You want to win the primary voter, and this should appeal to the Republican primary voter,” said Feehery, now a political consultant with the Washington firm Quinn Gillespie & Associates.

In the general election, though, the proposal is fodder for “a bunch of juicy targets for 30-second ads” to be run against Republicans, Feehery said. “Any time you talk about changing the Medicare program, there is risk,” he said.

‘Beach Ball’

Representative Steven LaTourette, an Ohio Republican, offered a similar assessment. “These tough times call for a bold budget,” he said of Ryan’s plan. “But by the same token, nobody should be confused that we haven’t just delivered not a softball to the Democrats, but a beach ball that they will hit out of the park.”

Democrats pounced on the proposal.

“They essentially end Medicare as we know it,” said Representative Chris Van Hollen of Maryland, the top Democrat on the House Budget Committee. “They don’t reform it. They deform it.”

Deficits and debt already have emerged as major issues for the 2012 campaign, with potential Republican presidential candidates saying the nation is headed for financial ruin unless leaders tackle government spending.

Poll Findings

While voters say they want politicians to tame the federal deficit, surveys show they don’t want to harm entitlements such as Medicare and Social Security or many discretionary spending programs. In a March Bloomberg National Poll, the federal deficit and government spending ranked second in importance -- behind only unemployment and jobs -- when respondents were asked to rank five issues facing the nation.

Still, majorities rejected significant reductions in community programs that serve lower-income Americans, medical and scientific research, education and the Environmental Protection Agency. More than three-quarters of those surveyed opposed any reduction in Medicare benefits.

“The polls all show that people don’t want the government to do any less, they just want it to cost less,” Collender said.

Ryan’s proposal would end Medicare as an open-ended entitlement program, replacing it for those currently under 55 years old with a plan to provide subsidies for buying private health insurance on the private market. It would cut Medicaid, the health-insurance plan for lower-income Americans, by more than $700 billion over the next 10 years.

During last year’s campaign, Republican leaders distanced themselves from Ryan’s proposals, saying they weren’t the party’s official ideas. Now, following an election in which Republican candidates ran on tackling the deficit and took control of the House, several said the party had no choice but to embrace an ambitious budget-cutting plan.

Need to Lead

“We’re in the majority and we have to lead,” said Representative Mike Simpson of Idaho.

Ryan said Republicans must embrace entitlement changes to avert financial insolvency for the U.S.

“We cannot keep going down the path of fearing what the other political party will do to us if we try to solve a problem,” he told reporters yesterday. “This is not a budget, this is a cause.”

That cause could create trouble next year for lawmakers such as Representative Lou Barletta, a freshman who said his Pennsylvania district has the state’s highest percentage of senior citizens. The Democratic Congressional Campaign Committee has targeted Barletta for just considering Ryan’s proposals.

“This is a plan that will not affect seniors” who now have Medicare benefits, he told reporters on Capitol Hill. “I’m going to say that every time somebody asks me a question, every time somebody makes eye contact with me.”

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.