Dems: "Fiscal cliff" first, then tackle entitlements

As Washington lawmakers seek to avert the so-called "fiscal cliff," Republicans have suggested they will insist on making changes to entitlement programs like Medicare, Medicaid and Social Security. Some Democrats, bucking the progressive wing of their party, said Tuesday they're open to making those changes -- if they come after the "fiscal cliff" negotiations.

Targeting programs that assist seniors and low-income Americans is unfair, some liberal Democrats say. However, Sen. Dick Durbin, D-Ill., a lead negotiator in deficit reduction talks in recent years, said Tuesday that "progressives cannot afford to stand on the sidelines in this fiscal cliff debate and to deny the obvious... We can't be so naive as to think that just taxing the rich will solve our problems."

"We need to take an honest look at Medicare," Durbin said at the Center for American Progress, a left-leaning think tank in Washington. "Untouched, Medicare is going to run out of money in 12 years. That is scary because we have so many Americans who count on it."

In his prepared remarks, however, Durbin said that changes to Medicare, Medicaid or Social Security "should not be part of a plan to avert the fiscal cliff." His office clarified that the senator believes Congress can get past the "fiscal cliff" first -- by extending the Bush-era tax cuts for middle class Americans and addressing long-term deficit reduction through tax reform -- and then discuss making small changes to Medicare and Medicaid.

White House spokesman Jay Carney today took a similar tack, calling the "fiscal cliff" and entitlement reform "two distinct issues here that are related."

"The president's belief is that we can address both of these in a broad deficit reduction package, but there's no question that they are in many ways distinct," Carney said. "That's why when we talk about an immediate action, a distinct, discrete action that Congress could take if the House of Representatives, if Republicans in the House of Representatives would agree to it, is to pass the tax cut, extending the so-called Bush-era task cuts for 98 percent of the American people."

The "fiscal cliff" refers to a series of tax increases and spending cuts slated to go into effect on January 1, which could potentially send the U.S. into another recession. The "fiscal cliff" includes the expiration of the Bush-era tax cuts and the expiration of the payroll tax holiday that Mr. Obama instituted. Around $1.2 trillion in cuts to both defense and non-defense programs are also set to kick in on January 1 unless Washington acts.

Carney said Washington should extend the Bush-era tax rates for income under $250,000 "right now." In the long term, he said, "we need to include, as part of our balanced approach, savings from entitlements."

The White House on Monday said Social Security reform should be on a separate track because "Social Security currently is not a driver of the deficit."