The President met with the Senate Republican caucus yesterday and asked for a compromise on the budget and debt limit debate. You can guess how that went down.

“We are talking here about spending reductions,” Senate Minority Leader Mitch McConnell (R-Ky.) said in recounting his message to the president. “There will be no tax increases in connection with raising the debt ceiling.” [...]

McConnell countered in Thursday’s meeting by laying out the contours of a proposal to earn his vote, and presumably that of the other 46 Republican senators: immediate budget caps over the next two years that press down discretionary spending, followed by eligibility changes to the Medicare and Medicaid health programs over the next five to 10 years and beyond. And no new taxes.

A White House source said the GOP senators made it clear that they were not exclusively pursuing the House-passed plan to privatize Medicare and shift more costs to seniors.

Sounds like means-testing or possibly raising the Medicare age, along with the spending cap. In exchange, um… the US gets to pay its bills?

Incredibly, McConnell calls this a “grand bargain,” something that will take the issue off the table in elections. He compared it to the Social Security bargain in 1983. He doesn’t seem to remember that THEY RAISED PAYROLL TAXES in that bargain. McConnell wants a grand bargain without the bargain part.

On a parallel track, Vice President Biden talked about a “down payment” in the debt limit talks he’s been having with both parties, with the target of a reduction in the deficit of $4 trillion over the next decade.

Hey, I have an idea for that. Do nothing.

The entire medium-term deficit problem goes away simply from ending the Bush tax cuts. Taxes are said to be the sticking point, but Democrats and the White House are unaware of their power. They can finish work on this simply by refusing to pass anything. Republicans aren’t the only ones with leverage here. The fact that Frank Wolf, a Republican member of Congress, criticized Grover Norquist for his maximal stance on taxes, saying that spending in the tax code to large corporations must stop, is an example of at least some recognition of this.

In the near term, however, there are a couple things to pass, like the debt limit, even if some Republicans want to deny reality and gravity and believe we can put that off forever. The public, misinformed about the debt limit, doesn’t want to see it passed, preferring to dine and dash on the debt incurred by massive tax cuts, two wars and the financial crisis.

Two other points here of concern. One from Biden:

If Republicans want Democrats to consider changes to Medicare, then Democrats will insist that Republicans look at taxes, Biden said.

“It’s on the table; it’s all open for discussion,” Biden said. “It’s the only rational way to approach this.”

Given the outcry over the Ryan budget, I’m actually a bit less concerned about this. But this, from the Republican meeting with Obama, is far more worrying:

Sen. John Hoeven (R-N.D.), a former governor, said that when he pressed Obama on reducing rising Medicaid costs, the president responded by suggesting that was an area they could explore. “It was received well,” Hoeven said.

Medicaid is really on the chopping block. The “grand bargain,” the proof of seriousness about deficits, could be foisted on the poor.