This isn't what I want, and it's not what the progressive wing of the party wants. But the plain fact is that deficit cutting is pretty popular across the board, modest reductions in Social Security and Medicare will probably go over fine with independents, and anyway, liberals have nowhere else to go. A few might actually do what my friend threatens to do, but in the end it won't be many — especially after the Republican Party settles on a candidate and we've all had a year or so to get to hate him (or her). And Obama will raise a fantastic amount of money from wealthy donors who are OK with this kind of dealmaking regardless of whether the progressive blogosphere is happy with him. Like it or not, the sad fact is that Obama doesn't need us. We're mostly going to vote for him regardless of what he does, and he's going to get all the money and organization he needs without us. Lefties simply don't have much leverage these days.
So not only can the Democratic Party survive if Obama does this, it will probably flourish, electorally speaking. That's not a happy conclusion, but I think it's likely an accurate one.
The fact that someone is floating the idea that entitlement cuts are on the table and Pelosi and other senior Congressional Democrats inside the negotiations aren't going absolutely bonkers suggests an even scarier possibility. Specifically, it suggests that they've (very reasonably) concluded that the Republicans are so far around the bend that no deal is possible and, at this point, the "negotiations" are nothing more than mutual positioning to try to win what is seen as an inevitable post-apocalypse blame game.
Four senior congressional aides said lawmakers are discussing using an alternative yardstick to gauge inflation, known as the “chained consumer price index,” to determine annual cost-of-living adjustments for millions of Americans. The idea may rile both Democrats and Republicans, because it could mean paring Social Security by $112 billion over 10 years, raising taxes by $60 billion and cutting pension and veterans’ disability payments by $24 billion, according to estimates by the nonpartisan Congressional Budget Office and the Joint Committee on Taxation.
To get a bit more technical, my understanding is that the proposal (which has floated around a bit on and off for years) is to switch from calculating inflation using a set market basket of goods to one where the market basket changes to account for how people's buying habits change as relative prices shift. In other words, if the cost of eggs goes up by 30% one year, in reality people cut back on the amount of eggs they buy in favor of say breakfast cereal instead. The current way of indexing inflation for social security COLAs does not account for this, and so may be resulting in higher increases in benefits than what is really "needed" to keep pace with inflation.
We can start by removing tax entitlements from the rich then go on by removing corporate entitlements and corporate welfare and finish by reducing defense entitlements. Problem fucking solved.
Maybe the people who stayed home were unhappy with how your party used the presidency and supermajority in congress they had been given.
BREAKING - GOP gave in on Bush tax cuts?: WH source tells CNN that Boehner agreed to let Bush tax cuts expire as part of tax reform.
DEBT TALKS more: WH source tells @YellinCNN GOP wanted tax reform to b only three income tax rates, all lower than now.
DEBT TALKS breakdown?: WH source tells CNN Dems were ok w broad GOP tax reform but didn't want any tax burden from wealthy 2% to others
Stressing - this is the game. Both sides giving us leaks to make other seem to blame. V EAGER to hear Boehner response on Bush tax cuts.
Good alert RTs guys. The s** is flying right now. We need to report what we're hearing but will spend next day at least sorting out truth.
DEBT TALKS next: WH will have Bill Daley and Tim Geithner on am talk shows. Expect more (maybe lots mo) from GOP. Talks at WH still Sun pm
DEBT More: WH source tells @YellinCNN in return for ending Bush tax cuts for wealthy, Dems offered big Medicare reform. But need details.
DEBT deal timing now: we're off the map for the moment. Hard to predict timing next. But feels like are in a more serious place. More...
Republicans are going to need to make a very tough decision over the next couple of weeks: Are they a party that's very good at saying "no" in order to get the best deal possible? Or are they a party that's incapable of saying "yes" even once they've gotten there?
Consider how far they've come: The Obama administration has agreed to a debt-ceiling deal that's 83% spending cuts and 17% tax increases -- mere inches away from the magic 83:15 ratio that the Republicans on the Joint Economic Committee asked for back in March.
The Obama administration has functionally agreed to redefine a "grand bargain" as a deal that trades lots of spending cuts and some entitlement reforms for a small number of tax increases. And as the taxes go up, so will the ambition of the entitlement reforms. In today's New York Times, Robert Pear reports that the "Obama administration officials are offering to cut tens of billions of dollars from Medicare and Medicaid in negotiations to reduce the federal budget deficit, but the depth of the cuts depends on whether Republicans are willing to accept any increases in tax revenues."
The Democrats have agreed to limit tax increases to cuts in "tax expenditures" -- a category that no less eminent a Republican economist than Alan Greenspan says should properly be understood as "government spending" rather than "tax cuts" -- rather than the marginal-rate increases that Republican economists say are truly harmful to growth. That's given Republicans an out, if they want it: They can say they're cleaning the code rather than raising taxes.
But there's little evidence, at least as of yet, that Republicans are going to take the deal -- or even that they can take the deal. That raises the question of whether they've gotten here by being savvy, tough negotiators, or whether the reason they keep saying "no" is that they've lost the ability to say "yes." As David Brooks writes today, "If the debt ceiling talks fail, independents voters will see that Democrats were willing to compromise but Republicans were not. If responsible Republicans don’t take control, independents will conclude that Republican fanaticism caused this default. They will conclude that Republicans are not fit to govern. And they will be right."
A normal Republican Party would seize the opportunity to put a long-term limit on the growth of government. It would seize the opportunity to put the country on a sound fiscal footing. It would seize the opportunity to do these things without putting any real crimp in economic growth.
The party is not being asked to raise marginal tax rates in a way that might pervert incentives. On the contrary, Republicans are merely being asked to close loopholes and eliminate tax expenditures that are themselves distortionary.
This, as I say, is the mother of all no-brainers.
But we can have no confidence that the Republicans will seize this opportunity. That’s because the Republican Party may no longer be a normal party. Over the past few years, it has been infected by a faction that is more of a psychological protest than a practical, governing alternative.
The members of this movement do not accept the logic of compromise, no matter how sweet the terms. If you ask them to raise taxes by an inch in order to cut government by a foot, they will say no. If you ask them to raise taxes by an inch to cut government by a yard, they will still say no.
The members of this movement do not accept the legitimacy of scholars and intellectual authorities. A thousand impartial experts may tell them that a default on the debt would have calamitous effects, far worse than raising tax revenues a bit. But the members of this movement refuse to believe it.
The 112th Congress is on pace to be one of the least productive in recent memory — as measured by votes taken, bills made into laws, nominees approved. By most of those metrics, this crowd is underperforming even the "do-nothing Congress" of 1948, as Harry Truman dubbed it. The hot-temper era of Clinton impeachment in the 1990s saw more bills become law.
The president said he would refuse to accept stopgap legislation. "It's not going to get easier; it's going to get harder," Obama said. "So we might as well do it now. Pull off the Band-Aid. Eat our peas."
He said he would refuse to sign into law a short-term extension of the debt limit, which technically left open the possibility that it could become law without his signature. The White House later confirmed that Obama meant he would veto such a bill.
Obama walks out of tense US debt meeting - aide
WASHINGTON, July 13 | Wed Jul 13, 2011 7:09pm EDT
(Reuters) - President Barack Obama abruptly ended a tense budget meeting on Wednesday with U.S. Republican leaders by walking out of the room, a Republican aide familiar with the talks said.
The aide said the session, the fourth in a row, was the most tense of the week as House of Representatives Speaker John Boehner, the top Republican in Congress, dismissed spending cuts offered by the White House as "gimmicks and accounting tricks."
It would have been worth reminding readers that Clinton is a big proponent of cuts to Social Security. At the deficit conference that Peterson sponsored last year, Clinton boasted that he had wanted to cut Social Security but congressional leaders from both parties blocked him. The cuts that he wanted would have reduced benefits by approximately 1 percent a year. This means that retirees in their 70s, 80s, or 90s, would be getting almost 15 percent less in Social Security benefits today, if President Clinton had gotten his way.
"Obama was signaling, loud and clear, that he would be willing to agree to a trillion dollars worth of spending cuts over the next 10 years, in return for raising the debt ceiling by a sum large enough to cover all expected government borrowing through 2012 -- a figure calculated, not uncoincidentally, at $2.4 trillion."
The People’s Budget eliminates the deficit in 10 years, puts Americans back to work and restores our economic competitiveness. The People’s Budget recognizes that in order to compete, our nation needs every American to be productive, and in order to be productive we need to raise our skills to meet modern needs.
Our Budget Eliminates the Deficit and Raises a $31 Billion Surplus In Ten Years
Our budget protects Social Security, Medicare and Medicaid and responsibly eliminates the deficit by targeting its main drivers: the Bush Tax Cuts, the wars overseas, and the causes and effects of the recent recession.
"Andrews also said Democrats would not be satisfied with passing a bare bones debt-ceiling increase without achieving any significant deficit reduction.
"I do think there is an understanding [within the caucus] that this deal has to convince the markets that we're going to do something serious about deficits," he said."
As of Thursday, Obama and Boehner had been working on a grand bargain that would produce roughly $3 trillion in savings over 10 years, the officials confirmed. But talks broke down along three major differences: the two sides were $400 billion apart on taxes, Obama rejected a last minute demand from the GOP that the deal include a repeal of the individual mandate in healthcare reform, and the two sides were still haggling over a difference of $40 billion in cuts to Medicaid, according to the White House.
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