By Mary Agnes Carey

KHN Staff Writer

August 26, 2011--The Republican former senator talks with KHN’s Mary Agnes Carey about the politics of deficit-cutting commissions and what it will take to tackle the ballooning federal debt.

Listen to the interview here. 

Here's a transcript of the interview:

MARY AGNES CAREY:  Good day.  I’m Mary Agnes Carey and this is Health On The Hill.  Washington is gearing up for a busy fall, where a bipartisan congressional panel will debate ways to cut federal spending, including possible changes to Medicare and Medicaid. 

Joining us to discuss the upcoming deliberations is former Sen. John Danforth, a Missouri Republican who co-chaired the Bipartisan Commission on Entitlement and Tax Reform in the mid-1990s.  He is now a partner in the St. Louis office of the law firm Bryan Cave.

Thanks so much for joining us, Sen. Danforth.

SEN. JOHN DANFORTH:  Thank you.

MARY AGNES CAREY: Your panel debated a variety of ways to reduce spending on federal programs like Medicare but didn’t reach agreement on a set of recommendations.  Why?

SEN. JOHN DANFORTH: Well, we put out a preliminary report, which was virtually unanimously endorsed, and we had great four-color charts showing that Medicare and Medicaid and Social Security were in dismal shape.  This was back in 1994.  So, there was near unanimous agreement about the problem. 

But when it came down to making recommendations, we couldn’t get more than about six people out of thirty-some-odd to agree to anything.  And the reason is that even when there is recognition of the problem, the solutions are so controversial and so politically difficult that, at that time, it was impossible to do anything about them.

MARY AGNES CAREY:  What do you make of the fact that some of the ideas your commission discussed - such as increasing the Medicare eligibility age or adding a copayment for home health or laboratory services - are still being discussed today?

SEN. JOHN DANFORTH:  Nothing has been done.  Nothing real has been done about Medicare, Medicaid, generally the cost of health care. The legislation that was passed a year or so ago did not really deal effectively with the cost of health care. It was simply creating more benefits.  And it’s harder to solve this problem, and it’s harder to figure out how to save money than it is to create programs and spend money, politically. Politically, the idea that there’s a free lunch has enormous appeal. 

MARY AGNES CAREY:  You worked very well with your co-chairman, Sen. Bob Kerrey, a Nebraska Democrat.  From that experience, what needs to happen to get the "super committee" to work cooperatively?

SEN. JOHN DANFORTH:  Well, I’ll be very pleasantly surprised if they do, because the problem is the cost of health care. That is the largest single part of this problem. And it’s the one that continues to grow faster than the economy.  So, it’s going to get worse and worse with the passage of time. 

And our history is to add more benefits -- the prescription drug benefit of a few years ago, then the new Obamacare – and not pay for these things. And it’s difficult to pay for them.  I think that there is broad recognition of the sorts of things that would have to be done, but I don’t see the political will to do it.

MARY AGNES CAREY: Do you think that Republicans will have to agree to accept some revenue increases?

SEN. JOHN DANFORTH: That’s going to be very hard for them. But in my mind, the future of our economy as a country is going to be determined by getting this debt thing under control, and the heart of that is the entitlement programs.  Roughly two-thirds of what we spend are transfer payments, which are government checks to, or on behalf of, individuals.  And then when you add government salaries, you’re up to 79 percent of government spending.  So very little is in what you could call investment or capital improvements - it’s all just getting the money out the door. 

MARY AGNES CAREY:  Let’s go back to your negotiations on your commission.  When you look back over those deliberations, what were some of the most heated moments of negotiations?  And why?  And what, if anything, about those negotiations could have changed the outcome that might be instructive to this new super committee?

SEN. JOHN DANFORTH: We never came close to coming up with proposals; all we were was an advisory committee.  Maybe the fact that they’ve got this trigger in this plan – maybe that will help them along.  But on the other hand, when the announcement is made by the co-chair of the committee that Medicare in its present form is untouchable – I don’t know how they’re going to do it. 

MARY AGNES CAREY: So you sound fairly pessimistic that they’ll be able to reach an accord.

SEN. JOHN DANFORTH:  Yes, I am pessimistic.  I hope that I’m wrong on that.  I think that this whole issue is going to be one that has to be decided by the American people – the whole issue of the debt.  And my hope is that in the presidential campaign, the issue will be presented so clearly that the election amounts to a referendum on the basic question of how much government are we willing to pay for.  And right at the heart of that is:  What do we do about the cost of health care?  And if the answer is:  We’re going to do nothing - each year those of us, particularly those of us over 65, we’re going to get ours and forget about the future - then we will at least set a course.  It’s our responsibility. 

But I believe that if you put it to the American people that this situation is really bad for the country – I think the American people would decide it and would decide it in the responsible way.

MARY AGNES CAREY: Thanks so much for joining us, Sen. John Danforth.  We appreciate it.

SEN. JOHN DANFORTH:  Thank you.