I really didn’t see much new in President Obama’s off-the-record, on-the-record interview with the Des Moines Register, certainly nothing that demands to be hidden from public view. It mostly contained a restating of arguments that have played out over endless stump speeches, debates and TV ads. People are trying to treat Obama’s two major 2013 campaign promises – a debt deal and immigration reform – as some kind of revelation, but he promised an immigration bill to Univision and he said the debt deal would come together “one way or another” early in 2013 when he visited with Jon Stewart.
I suppose there’s a bit more detail in the Register interview with respect to the grand bargain – Obama uses the phrase himself – but it’s nothing the President isn’t already running on, this idea of a “balanced” deficit reduction solution. I suppose we do now know the meaning of the word “balanced” to the President – a 2.5:1 ratio between spending cuts and tax increases:
THE PRESIDENT: Well, Rick, let me answer you short term and long term. In the short term, the good news is that there’s going to be a forcing mechanism to deal with what is the central ideological argument in Washington right now, and that is: How much government do we have and how do we pay for it?
So when you combine the Bush tax cuts expiring, the sequester in place, the commitment of both myself and my opponent — at least Governor Romney claims that he wants to reduce the deficit — but we’re going to be in a position where I believe in the first six months we are going to solve that big piece of business.
It will probably be messy. It won’t be pleasant. But I am absolutely confident that we can get what is the equivalent of the grand bargain that essentially I’ve been offering to the Republicans for a very long time, which is $2.50 worth of cuts for every dollar in spending, and work to reduce the costs of our health care programs.
And we can easily meet — “easily” is the wrong word — we can credibly meet the target that the Bowles-Simpson Commission established of $4 trillion in deficit reduction, and even more in the out-years, and we can stabilize our deficit-to-GDP ratio in a way that is really going to be a good foundation for long-term growth. Now, once we get that done, that takes a huge piece of business off the table.
The President call this the same bargain he’s offered in the past. I believe the Administration is baking into the cake at least the first $900 billion in deficit reduction, all on the spending side, from the spending cap of the deficit deal. Nobody’s talking about breaching that. In addition, the President has committed to using the roughly $1 trillion accounting mechanism from ending the war in Afghanistan and applying that to this equation. So if you look at it that way, the spending cap and war savings get you to $1.9 trillion, with the other $1 trillion you would need to satisfy the 2.5:1 ratio available in the sequester.
So really, what the President’s saying here is that he would keep the level of cuts in the sequester through other means, and then generate around $1 trillion in tax increases, which is roughly what the increase of the high end Bush tax cuts would do. That sounds simple enough. It does not require this “bipartisan tax reform” that would lower the rates. But Obama said to the Register that he would look at a corporate tax reform agenda – rate-lowering, base-broadening – in a “non-ideological way” once the grand bargain is off the plate.
If it’s truly the same offer made to Republicans, then it would entail all of the things, like the increase to the Medicare eligibility age and the changing of the cost of living adjustment in Social Security to cut benefits, that were around in the last conversation. This is the “bait” to get Republicans on board, as Chuck Schumer (last seen blowing up the tax reform part of the deal) predicted.
The President has already vowed to veto any version of this without the fig leaf of the increase in the top two tax rates. If all the Bush-era tax cuts expire, he can present a deficit-INCREASING deal that accomplishes all of these goals. The key comes in what replaces that sequester, which Obama said in the debate the other night “will not happen,” at least on the defense side.





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People, I beg you, the time to be screaming is NOW.
They are coming for it soon.
And they are going to get it if this country doesn’t raise hell NOW.
We must by the millions tell them that it is still the third rail.
When Romney wins the first thing on the agenda will be tax cuts, if that means
extending the payroll tax cut … then that will happen.
No other big changes will be attempted until the Romney tax policy has been
signed into law.
The next policy change will probably be gutting regulation and increased defense spending … war hawks and the tea party will join forces to get this done.
After all that, if there is still time left in his first term, they would probably go after Medicaid block grants … that’s a huge fight and they can use momentum from the first two policy victories to push it thru.
So I predict Social Security and Medicare changes will be left to the second term (if ever) under a Romney presidency.
Obama, as mentioned above, has already promised to cut Social Security and Medicare as soon as he is elected.
It’s your choice.
I don’t dislike David Letterman (as I do Jay Leno, but I don’t often find Letterman funny. However, I think he nailed it:
Neither Obama nor Romney is saying much about any of the issues any of us really care about. And their responses during the second debate rarely answered the questions asked.
I feel your pain, but the only way to tell anyone that cuts to Old Age, Survivors and Disablity Insurance (and Medicare?) are still the third rail is to withhold your vote from any politician who has indicated that he or she sees cuts as necessary or inevitable.
That would include Obama, who single-handedly convinced most Democratic voters that cuts are a necessity, and most incumbents in both Houses of Congress.
How likely do you think that i
Still, that is my voting plan. I will be voting Green as to any spot on the ballot where a Green candidate appears and writing in candidates on the rest of the spots.
And my plan is not based only on OASDI, but on so many issues. Also, I am bone-tired of being duped by Democrats. Obama was the very last one.
My response was of irritation with those who have been running around giving false reassurance that this was not his plan. Dean Baker’s article in the Guardian, which attributes Obama’s not championing Social Security because of deep pocketed rich donors, is one of those voices. That kind of excuse-making feeds into making voters go to sleep. The simplest explanation for Obama’s continued pursuit of cuts is “because that is what he wants to do.” That he wants to do this is only a revelation, if you have been trying to convince yourself and others that he does not want to, or, that the fact that he does want to, is not in your words, “so bad”.
“Grand Bargain” conjures up Monty Hall’s .”Let’s Make a Deal.” Or it might be a carnival barker in a straw hat and seersucker suit.
It’s a very bad term, or a very good term, depending. Trust me.