GOP agrees to raise taxes, challenges Obama to cut social programs

UPDATE: And then there’s this — looks like Obama is out in the open (my emphasis and paragraphing):

President Obama didn’t rule out raising the Medicare eligibility age from 65 to 67 as part of a comprehensive package to avert the so-called “fiscal cliff,” during an interview with ABC News on Tuesday. Obama told Barbara Walters that keeping younger seniors out of the health care program is “something that’s been floated” and didn’t immediately reject the idea[.]

Confirms my suspicions. Thanks, Mr. President, for not lying to us.

This is a multi-part post (I know … sorry), a continuing update of the Barack Obama “fiscal something” saga. First the news, here and here, per the headline. Second, some “how to think about this” take-aways going forward. Third, a list of “how to keep winning” actions.

The bottom line — you’re doing great so far. You’re winning. Keep it up.

The news: McConnell caves on taxes, calls on Obama to cave on entitlements

According to Brian Beutler at Talking Points Memo, Mitch McConnell has caved on taxes (my emphasis everywhere):

The top Republican in the Senate acknowledged Tuesday that President Obama has the upper hand in the debate about income tax rates on high income Americans. And he became the highest ranking GOP official to assert that Republicans will have to wait until next year, when the debt limit needs to be raised, to effectively push for cuts to social programs like Medicare, Medicaid and Social Security.

The remarks by Sen. Mitch McConnell (R-KY) suggest that Republicans have resigned themselves to the fact that income tax rates will increase over their objections next year — and that Obama and House Speaker John Boehner (R-OH) are unlikely to cut a broader deal that would include raising the debt limit before January. … [H]e added that if Obama’s unwilling to join the GOP and support major cuts and reforms to entitlement programs now, they’ll bring the matter up again next year.

Note the dual framing on social insurance cuts. The first part of TPM’s write-up suggests that the discussion about cuts to social programs is over until next year. But the second part suggests that McConnell hasn’t totally given up. He’s dangling the debt ceiling vote in front of Obama and saying, in effect:

If you don’t agree to cut social programs now, we’ll bring it up during debt ceiling talks next year.

Obama’s response? According to Beutler it’s this:

Obama has said he’ll refuse to entertain that negotiating tactic, and Democrats have his back. Senate Majority Leader Harry Reid (D-NV) has made clear that his caucus stands ready to increase the debt limit — or to provide Obama the authority to do so — as soon as the GOP drops its filibuster.

Re the debt ceiling — when does that deadline happen? It depends on how fast the government spends the money Congress has already allocated. That is, Congress has already allocated more spending than the debt ceiling allows. At some point, the government will actually spend enough money to bring it close to the debt ceiling. But exactly when, no one can predict. My guess, sometime in the first half of next year, but who knows.

If you only read on story, you’ll be comforted by this one. But not so fast, my friend.

The other news — Coburn says Obama will cut the safety net

Do you think this is over? It’s not, according to Ezra Klein:

Where things really stand in the fiscal cliff negotiations

For the White House, the key to any deal is tax revenues — delivered at least partly through higher rates — and a long-term solution to the debt ceiling. Additionally, any big deal will have to include some stimulus, including an extension of unemployment insurance and either an extension of — or more likely, a replacement for — the payroll tax cut.

So Obama may not take his tax-hike win and go home after all. Note the mention of the debt ceiling as a bargaining chip — in both stories. Obama might easily come back and say, “The debt ceiling made me do it.”

What’s the trade for all these other Obama wants? Your old friend, cuts to social insurance programs. Klein again:

For Republicans, the key is some give on tax rates, as well as a few high-profile entitlement cuts, namely an increase in the Medicare eligibility age and [Social Security] chained-CPI [reductions]. …  [T]he Medicare eligibility age [has] emerged, alongside chained-CPI, as the GOP’s top ask in the negotiations[.]

There it is again — if we kill one of ours, you have to kill one of yours. Notice also that Social Security cuts are back On The Table — in the form of a reduction to the cost-of-living adjustment via the CPI.

Note also this, the back-door privatization of Medicare proposal, added as a throw-away line in a paragraph about who will be hurt by the Medicare retirement age proposal:

Raising the Medicare eligibility age really will hurt some seniors. The poorest seniors will be okay, thanks to Medicaid and the Affordable Care Act[.]

Klein messages that the poorest will be OK because they are thrown out of Medicare and subsidized into Obamacare’s private insurance scheme. Just so you know.

And now the blockbuster:

The White House is firmer on its red lines in this deal than I can remember in any other negotiation. Administration officials don’t want a deal so badly that they’ll accept one that doesn’t raise tax rates, or that leaves another debt-ceiling crisis around the corner.

But if Republicans will give on those issues, the White House has always been clear that it is willing to put a lot on the table. “We’ve had conversations where [President Obama] told me he’ll go much further than anyone believes he’ll go to solve the entitlement problem if he can get the compromise,” Sen. Tom Coburn (R-OK) told me back in May. “And I believe him. I believe he would.”

Both Coburn and Klein say Obama could still make cuts. Hm.

So there you have it. Two news items, each implying the opposite of what other one says. Is it over? Depends on what you want to see, doesn’t it? Or you could just look at the facts.

How to think about this

There are several take-aways, all of which matter. This really is eleven-dimensional chess.

cat food

Cat food for granny, via Shutterstock

1. Progressives have been great on this, both in office and out. This means you, and it means people like the senators who signed the Sanders letter. If Obama wants to cut social programs (as he has in the past), he’s having trouble doing it.

2. Your best deal is still no deal until January. You will get the full Clinton-era tax hike to 39.6% instead of something less, the GOP won’t dare restore the cuts for middle incomes in January, and there will be no changes to grandma’s diet — no cuts to social programs. Obama will have played his aces, and I will thank him personally.

3. But this is not over. We’re getting two high-profile stories with different messages. In the “it’s mainly over” piece from TPM, there’s wiggle room. In the “it’s not over yet” story from Ezra Klein, all the quotes come from the Republicans, so there are no Dem fingerprints on a social programs surrender — yet.

Anything split that carefully down the middle isn’t over.

4. Obama can end this any December day he wants. All he has to do is say he’s sitting on his hands until January 1. The fact that he’s not saying that means he’s still angling for something other than a pure tax win.

5. What is Obama angling for in these negotiations? You’ll know on January 1. His fingerprints will be all over the state of things on that day. If social programs get cut, he cut them. If social program cuts are still “in the discussion,” he put them there. This endless discussion of social program cuts will end the day he ends it.

6. What does Obama want re Medicare and other social programs? Sen. Coburn is telling you (above). Obama has told you via his leaked offer to Boehner in 2011. The told you in his election interview in Iowa. The phrase “balanced approach” is code for “watch your wallet,” or your grandparent’s catfood cabinet. It means you’re being worked.

What to do

You’re doing great. We’re doing great. We need to keep it up.

1. Keep making any cut to social programs toxic as hell for any Democrat who agrees to it. Instructions here.

2. Watch carefully between Christmas and January 1. If something sneaky happens, it will go down while you’re in the afterglow of your week-long sugar binge and your college football anticipations. It will happen while you’re dreaming of Santa.

3. Don’t be confused about Barack Obama. We’re having this discussion today because he didn’t played his aces yesterday. He can end this any day he wants. He’s an adult — take his actions as his intentions. When he says “Look over there”— don’t. We can win this, but only by watching — and influencing — the main actor in the play. That would be Obama.

You can get at Obama directly, via messaging to your friends (vital, in my opinion) and via the White House — click or call:

White House phone numbers
Comments: 202-456-1111
Switchboard: 202-456-1414

You can get at Obama indirectly via office-holding Democrats, who will bear all of the brunt of any failure on his part. If you have the time, do both.

This is winnable, and we are winning — so far. Stay strong. And thanks!

(A teaser for next time: Veal Pen 2.0 is forming. How do you spot them? See who doesn’t reject benefit cuts. More soon.)


To follow or send links: @Gaius_Publius

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

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