Obama Yields to Liberal Outcry on Entitlement Reform

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Obama Changing Tune on Entitlement Reform?

Jim Angle reports from Washington

President Obama has tried for months to convince critics on the left that entitlement programs such as Medicare had to be cut in order to save the programs, but he seems to have yielded under pressure from his political base.

In his new $1.5 trillion deficit-cutting plan, unveiled Monday at the White House, Obama backed away from the changes he had been talking about for months.

Those changes had been part of Obama's pitch as recently as Sept. 8, when in his speech to a joint session of Congress Obama called for changes to the popular insurance program for Americans age 65 and over.

"With an aging population and rising health care costs, we are spending too fast to sustain the program," he said. "And if we don't gradually reform the system while protecting current beneficiaries, it won't be there when future retirees need it. We have to reform Medicare to strengthen it."

But after that speech, several Democratic groups and lawmakers sent letters, held news conferences and even staged protests, including one Monday in front of the White House by activists challenging the idea of any cuts in Medicaid benefits.

The president seems to have heard the objections. In his Rose Garden speech Monday, he proposed only half as much in savings as he did in debt talks this summer, offering $320 billion in changes instead of $650 billion, and he took a very different tone:

"We will reform Medicare and Medicaid, but we will not abandon the fundamental commitment that this country has kept for generations," he said.

"He's pulled way back on those proposals specifically on Medicare, Medicaid," says Alison Fraser of the conservative Heritage Foundation, "Even on Social Security, which at one point was in the mix, now it's completely off the table. So it's a disappointing step, rather than an encouraging one."

The president had proposed changes in Social Security to keep the program from having to cut benefits across the board in future decades. That is now gone. And he had proposed raising the eligibility age for Medicare from 65 to 67. That too is gone.

The changes to Medicare may or may not soften criticism from the left. The liberal group MoveOn.org urged its members last week to call the White House. And the group warned in a letter, "if the President comes out on Monday calling for cuts to Medicare and Medicaid benefits, the enthusiasm he's built up in the last week will disappear in an instant."

Ninety percent of the changes Obama has proposed are in the form of cuts to providers, such as doctors and hospitals instead. But reimbursements to them have already been cut.

And many policy experts are concerned about access to care for seniors on Medicare, a trend already under way in some areas of the country.

"So what we've seen from the president so far: more price controls and rationing," House Budget Committee Chairman Paul Ryan told Fox News. "No plans to save it from bankruptcy."

Taken together, the Medicare and Social Security programs have promised $46 trillion dollars more in benefits than the government can pay for with the revenues it now receives. Most agree cuts are inevitable, and conservatives warn that unless eligibility rules are tightened, beneficiaries will suffer, especially in Medicare.

"If we continue with even more of these provider crackdowns, you know, you're going to have a lot more doctors, hospitals, pharmacists, and so forth, dropping out of the program," Fraser said.

The plan does shift a small portion of additional costs to beneficiaries, but those changes would not start until 2017, after Obama’s second term, if he wins one.