The Only Hope for Obama, Congress and America -- The 'Grand Bargain'

As the clock ticks down to the November 23rd deadline for the Joint Select Committee on Deficit Reduction aka "the Super Committee," voters are wondering if Washington will finally get serious and enact meaningful fiscal reform. Last summer’s debt ceiling debate resulted in Americans souring on both parties as the partisan brinkmanship nearly led to the U.S. defaulting on its debt and sent shock waves across the global financial system.

With Congressional approval ratings at historic lows, President Obama stuck in the low 40s and uncertainty permeating Europe in the wake of Greece’s continued instability, the stakes heading into a divisive election year have never been higher.

Herein lies an opportunity for the president and congressional leaders to strike the “grand bargain” that may finally get us back on solid financial footing, increase consumer confidence and initiate a long-term fix to our debt crisis.

Regardless of one’s viewpoint on our national debt, in 2010 defense and entitlement spending consumed over sixty percent of the federal budget. With 10,000 Baby Boomers forecasted to join the Social Security and Medicare rolls every day for the next twenty years, healthcare and retirement spending threaten to leave America crippled in the coming decades unless the growth of domestic programs is stabilized.

The alternative? Massive tax increases and benefit cuts for all, as well as new occupations for the president and members of Congress.

Convincing a skeptical electorate of the urgent need to break the logjam will require Republicans to compromise on revenue increases. Democrats (who have the most to lose next year) need to come around on entitlement reform. The grand bargain approach is the only solution that offers both sides enough political cover to marginalize their cantankerous bases and show true leadership to the independent-minded voters who will decide the next election.

Both the Bowles-Simpson and the Rivlin-Domenici commissions have produced recommendations that address the drivers of our debt and can get us on the right path. The key here, however, is to be smart about cost savings, not simply making broad, across-the-board changes in the name of reform.

With Medicare, there’s a right way and a wrong way to go about achieving savings. Medicare’s current rate of spending growth is unsustainable in the long term, and significant structural changes must be made if this critical safety-net program is to survive. Options for consideration should include a gradual raising of the eligibility age, cutting some provider payments, examining cost of living adjustments, and increased premiums, especially for wealthy retirees. And the bureaucracy itself needs to be overhauled to ensure Medicare is accountable for cracking down on improper payments and other areas of fraud and abuse that waste billions each year.

The wrong way, however, would be to tamper with the Medicare programs that are already working, like the Part D prescription drug program. Since its implementation, Part D has been the one government-run healthcare program that is actually saving taxpayers money and is on a stable path. It gives seniors access to a wide range of affordable prescription drug plans and is structured to keep premiums low, with average monthly premiums holding steady at about $30.

Part D is also overwhelmingly popular, so any proposals that involve deep cuts carry significant political downside. More than likely, it would result in a significant number of seniors casting their ballots simply on the basis of perceived support for (or opposition to) Medicare.

Basically, seniors could become “Medicare voters.” In fact, we’ve already seen this in special elections this year, where the vehement opposition to the so-called Ryan plan to turn Medicare into a voucher system cost the GOP a House seat. Ryan’s plan never had a chance of passage in the Senate and only served to force Congressional Republicans to take a wildly unpopular vote that has vulnerable incumbents, especially freshmen, in a panic.

Medicare must be strengthened for the long term and is a necessary component of any balanced budget and deficit reduction plan. However, any reforms must be thoughtfully weighed in order to ensure current and future retirees are not unduly harmed. Any ill-considered changes to popular programs like Part D could produce a serious political backlash for Democrats facing increasingly frustrated and restive seniors at the ballot box next November.

Douglas E. Schoen is a political strategist and Fox News contributor. His most recent book is "Mad as Hell: How the Tea Party Movement is Fundamentally Remaking Our Two-Party System" published by Harper, an imprint of HarperCollins.