Once again, Medicare has become a piece on a giant political chessboard sitting between President Clinton and the Republican-led Congress.
Clinton's pledge in the State of the Union address to dedicate 15%, or $700 billion, of the federal budget surplus over the next 15 years to the Medicare Hospital Insurance Trust Fund is an effort to blunt a GOP move toward a broad-based income tax cut.
The president has another gambit: Since that speech, he has constantly linked the Medicare plan with his earlier-stated plans to devote 62%, or more than $2.7 trillion, of the surplus for Social Security over that same period.
By doing so, he is putting the GOP in the uncomfortable position of having to choose between lower taxes-the crown jewel of Republican politics-and the popular entitlement programs, the major Democratic Party achievements of the century.
A Senate GOP committee staffer described Clinton's strategy as "three words: polls, polls and polls.
"He wants to control the agenda. As long as you're using Social Security and Medicare, you can do it," said the aide, who asked to remain anonymous.
In essence, it's a replay of Clinton's strategy in 1995, when he fought off congressional Republicans' plans to balance the budget in seven years by constantly invoking "Medicare, Medicaid, education and the environment"-a phrase repeated so often it became known in political shorthand as "M-squared, E-squared."
"He's bludgeoned them with Medicare for four years," said one healthcare lobbyist, who asked not to be identified.
This time, by linking Medicare with Social Security, both of which have been described as the "third rail" of American politics, he is creating another formidable impediment to Republican tax-cut plans.
"We're into the politics of surplus," said healthcare lobbyist Frederick Graefe. "He wants to lay the predicate for no tax cuts."
On policy, Clinton has a strong argument. The 1965 law that created Medicare is an extension of the 1935 Social Security Act. Furthermore, beneficiaries connect the two, partly because their premiums for enrolling in Medicare Part B are deducted from their Social Security payments.
"Medicare is Social Security," Richard Pollack, executive vice president for federal relations at the American Hospital Association, told the association's annual membership meeting in Washington earlier this month. "The people served by Social Security are the same people served by Medicare. The funding stream for Social Security is the same as the funding stream for Medicare."
Democratic pollster and strategist Mark Mellman discovered the link. When one of his surveys asked people whether a promise not to cut Social Security is also a promise not to cut Medicare, 75% said yes.
"The public sees these programs as integrally related," Mellman said. "Part of the (Clinton) effort is to force (Republicans) to be clear on what they're going to do to protect both programs."
That has serious implications for the November 2000 election, when Democrats hope to retain the White House and retake at least the House of Representatives.
"The more that the battleground for the year-2000 election is in terms of Social Security and Medicare, the better the Democrats will do," said Humphrey Taylor, chairman of the polling firm Louis Harris & Associates. "These are extremely powerful weapons. The Democrats are just salivating at the thought that the battleground will be Social Security and Medicare."
But Republicans are trying to fight back. House Budget Committee Chairman John Kasich (R-Ohio), a likely presidential candidate, said in a speech to an American Association of Retired Persons meeting in Washington Feb. 4 he believed the surplus should be used to make sure Social Security remains solvent.
Yet he criticized Clinton for announcing his intention to use surplus money for Medicare before the National Bipartisan Commission on the Future of Medicare can report its findings, due by March 1. That commission is trying to develop a Medicare reform proposal that will keep the Hospital Insurance Trust Fund solvent through 2030.
Kasich called Clinton's proposal to use surplus money for Medicare "a way to block us from giving people some of their money back. The administration needs to get in line . . . and support the bipartisan commission.
"We know that Medicare has to be extended," he said. "But all the name calling, all the political posturing aren't going to help extend the life of the trust fund."
Providers, however, argue that Clinton has undercut his own message by proposing some $9 billion in savings from Medicare provider payments over the next five years at the same time that he's proposing to use the surplus to shore up Medicare.
Jack Bresch, legislative affairs director with the Catholic Health Association, called Clinton's approach "schizophrenic."
"He has a narrow view of what the entire Medicare program is," Bresch said. "It's about healthcare services, and only providers provide healthcare services."
Clinton's move also is an appeal to the 76 million members of the baby boom generation now nearing retirement age, added Robert Castro, vice president with the Republican polling firm Luntz Research. The looming insolvency of both Social Security and Medicare may worry them as much as high income taxes, and they may be open to measures to make the programs fiscally sound.
But the jury is still out on which is more important, lower taxes or more money in the entitlement programs, he said.
"Surplus budget politics is something new that neither the president nor Congress has had a chance to deal with," Castro said.