Now that Mitch McConnell has thrown down the gauntlet and demanded a cut to Medicare as a condition for an increase in the debt limit, Democrats have the choice of negotiating with hostage-takers, or holding firm and allowing the pressure to build on their opponents. All of the leading contributors to the GOP don’t want a debt default. They can and will do the work – indeed already have been doing it – of forcing the Republicans to act. It hasn’t yet worked, but the pressure hasn’t yet risen.

James Clyburn, who’s part of the Biden deficit talks, says there will be no benefit cuts to Medicare.

Clyburn made the claim in an interview with Bloomberg News that’s set to air this weekend, a transcript of which is now on line. In the interview, Clyburn revealed that negotiators were zeroing in on up to $6 trillion in cuts, but when asked about Medicare, he seemed to take benefits off the table.

“We are not going to reduce benefits at all,” Clyburn said, when pressed on what he was willing to agree to on Medicare. He insisted that the Medicare reforms in the Affordable Care Act should be looked at as a template for moving forward.

“I would ask everybody to take a hard look at what we did last year, ” Clyburn said. “Over a 10-year period, what we did could be sufficient going forward.”

A couple things here. First of all, the number $6 trillion is breathtaking, more than either President Obama or Bowles-Simpson recommended. I don’t know what to make of that at all, and I don’t see how you can get there, given all of the things off the table. That’s a radical reordering of the size of government.

Second, you can see the out here, yes. Clyburn says they won’t reduce benefits, but would look at the Affordable Care Act trims as the template. Of course, last year Republicans called those Medicare cuts. In truth they were cuts to corporate welfare, along with some demonstration projects designed to reduce provider payments, and strengthening the IPAB to put more of those projects into action. But politically, we’d be having the same argument. And it would significantly weaken what is a proven way to win elections, by contrasting the approaches on Medicare.

But Clyburn also says “Over a 10-year period, what we did could be sufficient going forward.” So does that mean Medicare won’t be a part of this package? It’s unclear.

There’s enough here to suggest that, while Democrats are winning politically on the budget fight, on the policy they are accepting just as savage an austerity program as the Republicans. This comes at a time of falling GDP estimates and a jobs crisis. As Ezra Klein writes, “They may win the election in 2012, but only after they lose the budget in 2011.” And given both the correlation between elections and the economy, and the perception of Medicare cuts for which Democrats may be squeezing open the door, I don’t even know that the former is true. It’s a long way to next November.

UPDATE: And now Harry Reid’s spokesman Jon Summers makes a statement:

“Republicans are holding the United States’ credit hostage to ram through their plan to end Medicare. They are now saying they won’t accept any plan to reduce the deficit unless it also cuts Medicare. Voters have resoundingly rejected this ideological agenda. Republicans should drop it and move on.”

Not much there. Just that the Republicans should drop it.