UPDATE 1-US Republicans suggest deal possible on healthcare

Sun May 22, 2011 4:40pm EDT

* Ryan, McConnell say could compromise on healthcare

* Ryan plan headed for defeat in Senate (Recasts, adds McConnell comments)

By Andy Sullivan

WASHINGTON, May 22 (Reuters) - Top congressional Republicans said on Sunday they would be open to a compromise on healthcare costs, one of the biggest stumbling blocks in a deal to get the United States' debt under control.

Representative Paul Ryan, the chairman of the House of Representatives Budget Committee, said he would "absolutely" be willing to negotiate with Democrats, who have hammered his plan to scale back government-run health plans for the poor and the elderly.

With Ryan's plan headed for likely defeat in the Democratic-controlled Senate, that chamber's top Republican said it was time for "an adult conversation" on ways to keep healthcare costs under control.

"Let's just stipulate that nobody is trying to throw Grandma off the cliff," Senate Republican Leader Mitch McConnell said on "Fox News Sunday."

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Health reform is a top sticking point as the two sides try to hash out a budget deal that would give lawmakers political cover to back an increase in the country's borrowing authority.

And as the 2012 election season gets underway, it is shaping up to be a top campaign issue as well.

Ryan's proposal to partially privatize the Medicare health plan for the elderly has already imperiled the presidential hopes of one Republican, Newt Gingrich, who faced a fierce conservative backlash last week after he described it as "right-wing social engineering."

Polls show that Ryan's proposed changes are unpopular with voters, and McConnell said he is not urging his fellow Republicans to support it when it comes up for a vote in the Senate this week.

"We have other budgets that Republicans are pushing," McConnell said. "We're not going to be able to coalesce behind just one."

The United States reached its $14.3 trillion debt limit last week, and the Treasury Department says it can stave off a default until early August.

Experts say a default would push the country back into recession and roil markets across the globe.

Republicans and some Democrats say they won't back a ceiling increase that does not include steps to rein in the debt load, which has more than doubled over the past decade.

In talks led by Vice President Joe Biden, top lawmakers have agreed to at least $150 billion in spending cuts, but that is far short of the $4 trillion in deficit reduction that outside experts say is needed to stabilize the debt over a 10-year span.

On healthcare, the two sides are separated by a gulf of trillions of dollars. Ryan's plan would save $2.2 trillion by scaling back Medicaid, the government-run health plan for the poor, and repeal President Barack Obama's signature health reform program, the 2010 Affordable Care Act.

Obama, in turn, has proposed saving $480 billion by accelerating reforms in the program -- a non-starter for Republicans who insist it must be repealed.

Speaking on NBC's "Meet the Press," Ryan said compromise was possible -- reversing an earlier stance that a deal on healthcare would not be reachable until after the election.

"Of course, absolutely," Ryan said, when asked if he would be open to negotiation. "Of course we would, this is the legislative process. But let me be clear: We are the only ones who have put out a plan."

Democratic Representative Chris Van Hollen, a participant in the Biden talks, said Washington could find savings by lowering the price the government pays for prescription drugs, rather than scaling back benefits for patients.

Van Hollen repeated Democrats' contention that any debt-reduction plan requires higher taxes, saying Republicans' reluctance to consider them forced Ryan to push his unpopular cuts to Medicare and Medicaid.

"You can't do it with a one-sided, lopsided approach," he said on "Meet the Press."

McConnell declined to say on Fox whether more tax revenue would be part of a final deal, but later in the day he reiterated his firm anti-tax stance.

"There will be no tax increases in connection with raising the debt ceiling. We're talking about spending reductions," he said in a prepared statement. (Editing by Philip Barbara and Eric Beech)

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