WASHINGTON -- President Clinton used a Democratic pep rally on Capitol Hill yesterday to assail Republicans for failing to embrace his call to save 15 percent of the federal budget surplus to shore up the ailing Medicare program.

Clinton's failure to embrace specific structural reforms for Medicare is garnering criticism, too, not only from Republicans but from some moderate Democrats.

Those critics contend that drastic reform is the only way to maintain the expensive federal health care program for the elderly. They would force the existing fee-for-service Medicare program to compete with private insurers for Medicare patients, hoping that market forces would hold down costs.

The president hinted yesterday that he could accept such changes in a Johnson-era program that, if untouched, could go broke in 10 years.But he stuck to his insistence that he could accept no proposal that did not reserve 15 percent of the surplus -- or up to $700 billion over 15 years -- for Medicare. That provision would extend the solvency of Medicare's hospital fund until 2020, the White House says.

"I'm not opposed to responsible reforms that enable us to secure Medicare for an even longer period," Clinton told cheering Democratic lawmakers. "But I am telling you that we cannot deal with the Medicare problem without a greater investment of money."

That was far short of what Republicans and some Democrats on the national Medicare reform commission had hoped for. Sen. Bob Kerrey of Nebraska, a Democrat on the commission, expressed doubt about Clinton's contention that paying down the debt with 15 percent of the surplus would stave off Medicare's short-term insolvency crisis.

"What the president is doing with Social Security and Medicare is politically satisfying," Kerrey said, "but it is financially inadequate."

Deborah Steelman, a Washington lawyer who was appointed to the commission by Senate Majority Leader Trent Lott, urged the president to allow private insurers to compete with Medicare rather than throw money at a program whose costs might soon spiral out of control.

"What we have from the White House is all kinds of statements from the briefing room, like, 'I look forward to the report of the commission,' as if they're not involved," Steelman said. "This is not leadership. This is not what is needed."

The White House has made the saving of Social Security and Medicare top issues for the rest of the president's term, suggesting that shoring up the two programs would enhance Clinton's scandal-tarred legacy.

The prospects for Medicare changes have reached a critical juncture. The March 1 deadline for a report from the bipartisan commission, which was appointed to find Medicare solutions, came and went this week. The commission chairman, Sen. John B. Breaux, a Democrat from Louisiana, promised that his panel would complete its work this month.

A Medicare fix has been caught between the hopes for Clinton's legacy and the impulse to help the electoral prospects of congressional Democrats and Vice President Al Gore in 2000. Those Democrats stood loyally by the president throughout the Monica Lewinsky scandal and could be looking for a reward. Gore and congressional Democrats, especially in the House, regard their main concerns as preserving the Democratic hold on the White House and regaining control of Congress.

If Clinton and Congress agree on a long-term solution for the Medicare system, they will have effectively denied Democrats a key political issue in 2000 that is thought to favor Democrats: the safeguarding of Medicare.

"I would assume the president is being properly grateful to the people who rallied around him during the impeachment process, but I also assume he's sensitive to the vice president's prospects," said Will Marshall of the Progressive Policy Institute, a wing of the centrist Democratic Leadership Council, which supports the proposed Medicare reforms.

Asked whether Democratic leaders in Congress were resisting Medicare changes, Kerrey said, "It's not resistance but nervousness. This is a very important issue for Democrats."

Republicans say they detect outright resistance, and they are increasingly blaming the White House for the Medicare stalemate.

To gain the imprimatur of the Medicare commission, the reform plan needs the support of 11 of the 17 members. The proposal -- floated by Breaux and Rep. Bill Thomas, a California Republican -- has 10 supporters, and none of Clinton's four appointees on the commission has signed on.

"I do think it's interesting that when you look at the 10 votes -- Democrats and Republicans, House members and senators, private sector and public sector -- not one of them is a presidential appointee," said Thomas, who accuses the White House of keeping its appointees in check. "They stand out like a sore thumb."

Chris Jennings, the president's top health care adviser, responded that Republicans have not tried to address Clinton's desire to reserve part of the surplus for Medicare and to include prescription-drug coverage in any plan. He said Thomas and Breaux were asking commissioners to vote on a framework for Medicare reform without providing any of the details.

"The latest iteration does not include the surplus, a prescription-drug benefit, and there are not enough details," Jennings said. "This is one of those issues where details mean everything."

Thomas maintains there is not enough money for a Medicare prescription-drug benefit, that the surplus cannot help Medicare's long-term problems and that it is Congress' role, not the commission's, to flesh out details of the reform plan.

"If Chris Jennings throws up absolute positions in which there's no way to compromise, then I don't think we can get an agreement," Thomas said.

Breaux says the battle lines are not as firm as they might seem. Next week, Kerrey and two Clinton-appointed commissioners plan to introduce a proposal that would meet many of the White House's demands and could secure the votes needed to give momentum to a Medicare reform plan.

Yesterday, Breaux met with Clinton, riding in his limousine from the Library of Congress to the White House to discuss the latest proposals.

The president is "doing exactly what he ought to be doing, waiting for the commission to give him a report," Breaux said. "In the end, I think he'll be there for us."

Pub Date: 3/04/99