Entitlement Reform Gums Up Fiscal Cliff Talks

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Lawmakers in Washington are no closer to a deal on avoiding the fiscal cliff than they were before Thanksgiving when both parties strongly hinted a deal was in reach after a meeting at the White House.

Congressional aides are busy trying to work out the nitty gritty details and they're finding there are major hurdles.

Chief among the hurdles are entitlement reform and tax increases. Republicans are showing signs of cutting a deal to raise taxes on high-income earners, but Democrats are divided over making cuts to programs like Medicare and Medicaid.

President Barack Obama has insisted repeatedly that tax increases on the wealthy must be part of any deal, even as White House officials concede that government benefit programs will have to be in the package, too.

"It is the president's position that when we're talking about a broad, balanced approach to dealing with our fiscal challenges, that that includes dealing with entitlements," White House Press Secretary Jay Carney said Tuesday.

But even if GOP lawmakers agree to raise taxes, there is no guarantee Democrats can come up with enough votes in the Senate to cut benefit programs as Republicans are demanding.

"I hope not if it means Social Security or Medicare benefit cuts," Sen. Sheldon Whitehouse, D-R.I., said.

There's a growing consensus among Senate Democrats and the White House that Social Security should be exempt from any deficit-reduction package. But some centrist Democrats in the Senate argue that fellow Democrats must be willing to consider cuts to Medicare and Medicaid in order to get concessions from Republicans on taxes.

"It has to be both - a significant revenue increase as well as spending cuts," Sen. Max Baucus, chairman of the Senate Finance Committee, said.

Sen. Kent Conrad, D-N.D., who is retiring as chairman of the Senate Budget Committee, said rising health care costs in Medicare and Medicaid are helping to drive future spending, making them an essential part of a long-term deficit-reduction package.

"I've been part of every bipartisan group here. We've always put everything on the table," Conrad said. "If you're going to solve this problem, you're going to have to deal with where the spending is and the revenue can be raised."

But senators like Baucus and Conrad increasingly are being drowned out by other Democrats emboldened by the recent election results to fight against benefit cuts.

Sen. Tom Harkin, D-Iowa, said he is willing to find savings in Medicare and Medicaid by making them more efficient. But, he said he won't support benefit cuts.

"I think the election spoke very strongly about the fact that the vast majority of American people don't want to cut these programs," Harkin said.

Sen. Dick Durbin, the No. 2 Democrat in the Senate leadership ranks, said he doesn't think there should be a rush to overhaul entitlement programs in connection with the move to avert the fiscal cliff in the remaining weeks of the current session.

The Illinois Democrat said in a CNN interview Wednesday that "what we need to put on the table short-term is mandatory deficit reduction."

Durbin said entitlement reforms to programs like Medicare and Medicaid should be "part of the long-term strategy" of reining in federal deficits.

Durbin repeated his position that Social Security should not be a part of the discussions. And he said that "we want to make sure that Medicare at the end of the day is a program that is solvent and we can count on it for years to come."

Plus, there are now some Democrats gumming up the system by suggesting things like going off the fiscal cliff to get a stronger negotiating hand.

Some Republicans are also complicating the issue by suggesting that the repeal of Obamacare - or parts of it - should be on the table, which is a non-starter for Democrats.

However, with Republicans openly talking about supporting tax increases, Senate Majority Leader Mitch McConnell is calling on the president to step up with proposals of his own.

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