Ezra Klein: More on Obama’s “compromising”—Cut Social Security, cut Medicare, extend many of the Bush tax cuts

Reporters have started digging into what Obama put on the table as part of his $4 trillion “Grand Bargain” offer to Republicans. First, we heard from Sam Stein at Huffington Post that Medicare was on the table and the knife was poised to cut it. All Boehner needed to do was say Yes.

Now there’s more from Ezra Klein. Stunning what Obama tried to give away (h/t Digby and Matt Stoller; my emphasis):

I knew the White House wanted a compromise on the debt ceiling. I just didn’t expect them to do quite so much, well, compromising.

Here’s what appears to have been in the $4 trillion deal they offered the Republicans: A two-year increase in the Medicare eligibility age. Chained-CPI, which amounts to a $200 billion cut to Social Security benefits. A tax-reform component that would raise $800 billion and preempt the expiration of the Bush tax cuts — which would mean, for those following along at home, that the deal would only include half as much revenue as the fiscal commission recommended, and when you add the effect of making the Bush tax cuts a permanent part of the code, would net out to a tax cut of more than $3 trillion when compared to current law.

That last bit apparently killed the deal. But it was actually the biggest concession on the table. … The deal Obama offered Boehner would’ve traded away the option to force much more in revenues later in order to get slightly more in revenues now. And it would have thrown in a slew of entitlement cuts and spending cuts as a sweetener.

Note the word “sweetener.” Never thought of catfood as a sweetener, but maybe I don’t shop at those dollar stores enough.

Klein’s piece is titled “Why Liberals Should Thank Eric Cantor”. Indeed. As I tweeted yesterday, “Are we counting on Repubs to defeat O for us?” Seems Klein is on board with that.

About those Bush tax cuts, Digby adds:

Ezra mentions in passing that the administration has no intention of letting all the Bush tax cuts expire, which seems to set off alarms. But I’m fairly sure he’s talking about the middle class tax cuts. The problem in 2012, as it was last winter when they faced this last time, is that the cuts needed to be decoupled when the Democrats held congress and had some juice during the early days of the economic crisis. Had they been smart enough to permanently extend the middle class cuts at the time and leave only the tax cuts for the wealthy n a temporary basis, the Republicans would be in a much weaker position. As it is, they’ll hold the middle class tax cuts hostage in the next lame duck just as they did before.

I’ll take issue only with the bolded phrase. I’m becoming cynical enough to think that they were smart enough — to fool us into thinking they were dumb enough to do it wrong.

I think the failure to de-couple the two chunks of Bush tax cuts was deliberate. After all, Occam’s Switchblade says he’s doing it because he wants to. Paul Krugman agrees.


Gaius Publius is a professional writer living on the West Coast of the United States.

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