Senators: Trade $1 trillion in Medicare cuts for debt ceiling

Treasury Secretary Timothy Geithner's warning this week that the federal government will hit its borrowing limit (a.k.a. the "debt ceiling") on December 31 elicited something resembling a collective groan from policymakers and political reporters who have their hands full covering the fiscal cliff.

Indeed, when the two parties eventually reach agreement on resolving the "fiscal cliff," that agreement seems likely to leave the the debt ceiling unaddressed. Though President Obama has indicated that he would like an agreement that includes raising the debt ceiling, Republicans, who do not like the hand they've been dealt on taxes, see it as the only leverage they have in extracting spending cuts from the administration.

And right on cue, Tennessee Republican Sens. Lamar Alexander and Bob Corker today proposed a debt ceiling agreement that would raise the borrowing limit by $1 trillion dollars in exchange for commensurate cuts to Medicare outlays over 10 years.

Republicans argue that, because runaway entitlement spending is the biggest single driver of federal deficits, the only way to truly solve the structural debt problem is to reform entitlement programs in a way that reduces their cost. Corker echoed this concern when he announced the proposal, which he argued would "cause these programs to be solvent over the long haul, so future seniors will have the opportunity to enjoy these benefits that we think are very important."

"We have to have someone address the Medicare 'fiscal cliff'," Alexander argued, "or the seniors and, soon thereafter, young Americans are going to be pushed over that cliff and they're going to wonder why we didn't do anything."

Beyond reining in entitlement costs, Alexander argued, the proposal could also grease the wheels of the broader budgetary debate. "Taking these two provisions together would provide certainty for the economy," he said. "It would be a linchpin for a budget agreement that would get the economy going again. "