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Congress' Budget Hunt Hits a Snag

Senate rejects GOP's Medicare proposal but can't decide on any alternatives

Darling says Medicare was an issue in that campaign, but "you can't look at that race and call it a referendum on Medicare." Hochul won in three-way contest with 48 percent of the vote against a Republican and Tea Party activist.

In that race, Medicare was the top issue for 21 percent of those planning to vote, according to the Siena College poll taken last weekend. That sentiment was reflected in Hochul's winning margin. In a poll taken the final weekend of the campaign, Republican Jane Corwin trailed Hochul among those 55 and older by an eight-point margin, 45 percent to 37 percent.

Darling concedes that Republicans have done a lousy job of telling voters why it's crucial to reform Medicare and other entitlement programs because of growing costs.

Medicare overhaul is unlikely to pass this year, according to experts such as Darling and Sawhill, but will be a hot topic in next year's congressional and presidential elections. So far, Republican presidential candidates have been reluctant to embrace the controversial Ryan plan. But when Newt Gingrich spoke harshly of the proposal recently, conservatives lashed out at him, and he ultimately said his remarks had been misunderstood and apologized to Ryan.

Ryan's plan was one of four that failed in a series of Senate votes. Democrats didn't offer a plan, deferring instead to bipartisan talks that are being led by Vice President Joe Biden. Obama's original budget proposal was put up for a vote but failed unanimously. Obama himself backed away from it this spring by offering another that cut the deficit more.

An ad-hoc group of three Republicans and three Democrats who hoped to come up with a plan for reducing the deficit lost one Republican member recently. That development, combined with the budget failure, means Biden's talks are the "only game in town" for crafting a fiscal deal, Sawhill says. But the Biden talks are likely to produce only small-scale changes as an August deadline looms for raising the federal debt ceiling, and financial markets signal they want action, she says.

"I'm afraid it will be left to the next election," Sawhill says. "The big question is, can we afford to do that? How much longer will our creditors be willing to lend at low interest rates?"

Tamara Lytle is a veteran Washington reporter.

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