Sacred Cows: Why Lawmakers Are Stuck on Medicare, Medicaid, Social Security Fixes Obama, GOP Agree Entitlement Programs Need Reform -- But Not What Kind

Feb. 17, 2011 -- With all the finger-pointing in Washington this week over the need to reform Medicare, Medicaid and Social Security, one thing is clear: it might just be Americans' very sense of entitlement to those programs that's the biggest barrier to getting something done.

The three programs have ballooned to 57 percent of the government budget this year and are widely cited as the most significant contributors to the federal deficit, something nearly all Americans want to see aggressively brought under control.

But while lawmakers from both parties agree on curbing the skyrocketing costs of the programs, few have endorsed a specific way to get that done.

President Obama, who's come under fire for not offering a detailed vision for fixing entitlement spending in his 2012 budget, said Tuesday that he's prepared to work with both parties to "start dealing with that in a serious way."

Republicans, meanwhile, who also haven't united around their own path to reform but promised their forthcoming budget would include a step forward, said they are "waiting for presidential leadership."

Washington's pundits say both sides could come together this year and work something out. But the "adult conversation" Republicans and Democrats say they're ready to have on entitlements only gets more politically perilous as it gets more specific -- particularly ahead of a looming election battle in 2012.

Fifty-six percent of Americans oppose changes to Medicare benefits and 64 percent oppose changes to Social Security benefits, according to a poll by the Kaiser Family Foundation and Harvard University School of Public Health.

At the same time, a majority of Americans oppose tax increases to pay to keep the programs operating at their current levels.

Moreover, heading into a presidential election season, no party or politician wants to be perceived as altering a benefit program that affects some of the most reliable and active American voters -- senior citizens.

Experts Propose Cuts to Entitlements

Democrats made protecting the entitlement programs a key part of their message during the 2010 campaign, and they have largely vowed to continue to fight any reform that would cut benefits for children and seniors.

Republicans so far have also been timid about making such changes. They did not unite around a proposal by the House Budget Committee chairman, Rep. Paul Ryan, that would cut funding for Medicare and Medicaid by an estimated 6 percent over the next decade, according to one analysis of his "roadmap."

But financial experts say a meaningful solution will likely force changes to the programs, cuts to some benefits, and tax increases at the same time.

"We must stabilize, then reduce the national debt, or we could spend $1 trillion a year in interest alone by 2020," wrote former Clinton White House chief of staff Erskine Bowles and former Sen. Alan Simpson, R-Wyoming, in their bipartisan report on fiscal reform. "A sensible, real plan requires shared sacrifice – and Washington should lead the way and tighten its belt."

The panel proposed, among other measures, placing a spending limit on government plans such as Medicare, Medicaid, and CHIP, and imposing a premium increase on consumers if the savings were not realized. It also suggested raising the retirement age for Social Security to 68 by 2050 and making benefit payouts more progressive, targeting those who need them most and reducing payments to upper-income earners.

Many of those ideas have been non-starters with members from both parties.

Whether Republicans and Democrats will now take a second look at these or other options for entitlement reform in the weeks ahead, it's clear any serious effort to tackle the costs of the three "sacred cows" will leave some Americans unhappy.

After all, Americans want to have their budget cake and eat it too.