Obama's deficit plan would cut more slowly than competing ones

Washington -- President Obama's deficit reduction plan would lower the nation's debt by about $4 trillion, just as much as a plan offered by a presidential commission and another approved by the House. But Obama's proposal would not hit that $4 trillion target until 2023, two years after the other proposals, according to an analysis released April 21 by the Committee for a Responsible Federal Budget, a nonpartisan policy center in Washington, D.C.

Obama's proposal would maintain Medicare's defined benefits, but also strengthen an independent board's ability to reduce federal spending on Medicare and prescription drugs, among other changes.

In contrast, the plan proposed April 5 by House Budget Committee Chair Paul Ryan (R, Wis.) -- and approved by the House on April 14 -- would save $4.02 trillion over a decade. It would repeal the national health reform law, cap federal spending on Medicaid and turn Medicare into a voucher program to help seniors buy private insurance.

The proposal approved in December 2010 by 11 of the 18 members of the National Commission on Fiscal Responsibility and Reform -- the bipartisan deficit reduction panel created by Obama in February 2010 -- would save $4.06 trillion over a decade in part by increasing Medicare cost sharing and reducing payments to certain health professionals.

The Committee for a Responsible Federal Budget's analysis used the same policy assumptions as the Congressional Budget Office, including the assumption that Congress will continue to block Medicare physician pay cuts called for under the sustainable growth rate formula. The panel's analysis is online (link).

Many Americans are not sold on Ryan's Medicare voucher plan. Cutting Medicare spending to reduce the nation's debt elicited reactions ranging from tepid support to strong opposition, according to two polls conducted and released in mid-April.

Seventy-eight percent of Americans oppose cutting Medicare spending to reduce the deficit, according to a poll of 1,000 adults released April 20 by Washington Post/ABC News (link). Twenty-one percent would be willing to do so.

But 48% of Americans responding to a New York Times/CBS News poll said they would be willing to cut Medicare spending to reduce the national deficit (link). Forty-five percent of respondents would oppose such cuts, the poll of 1,224 adults found.

The Times/CBS poll nevertheless revealed strong public support for Medicare: 61% of respondents said the program is worth its cost to taxpayers; 29% said it was not. An additional 10% were not sure.

Also, 64% of Americans support keeping Medicare as a defined benefits program instead of a defined contribution program as proposed by Ryan, while 32% support this proposal. Of the one-third who support vouchers, two-thirds said they would oppose them if the cost of private insurance increased faster than the voucher amount.