Obama’s fiscal cliff deal: “Dear John, let’s each kill one of our own”

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This analysis as to what’s being discussed in the supposed “fiscal cliff” talks is somewhat speculative, but there are enough pieces in place that I’m willing to go with it and let Obama prove me wrong. (Please please, do prove me wrong.)

But reading the signs, I don’t think I’m far afield. In fact, I think I’ve found the key. The trick in understanding the fiscal cliff deal is to not assume Obama is compromising. He’s playing for a double win instead. That’s the only explanation that makes sense of his refusal to simply let the 2001-2010 tax cuts expire. Read on.

The deal is carefully crafted, with a “raise taxes” piece and a “cut benefits” piece

Let’s assume the deal as sussed or leaked by Ezra Klein represents the Obama goal. (Prove me wrong, sir; sign a different deal.) If that’s true, we know the following for sure.

On the Obama side, the deal he wants does not contain a compromise — a piece he likes and a piece he doesn’t like. We do ourselves a huge disservice to think of him as compromising.

Instead, Klein’s Obama offer contains two pieces — both of which he likes — and is designed to avoid the one outcome he wants to avoid, letting the 2001-2010 tax cuts expire.

The first piece Obama wants is to force Republicans to vote to raise taxes, force them to be unfaithful to Grover Norquist, and break the Republicans’ back on this issue. I would think Beltway Dems love this outcome. I think they think it will insure electoral victory for a generation (or until the climate kicks everyone’s butt, whichever comes first). They’re wrong, of course — Dems will lose big-time — but that miscalculation should come as no surprise. This still has them drooling.

If that’s the case — if I’m right about Obama’s goal — the size of the tax increase doesn’t matter at all. It’s the fact of it that counts.

So here’s the first part of Obama’s offer to Boehner:

a. John, I can let the 2001 tax cuts expire, the top rate goes to 39.6% (from 35% assessed at $388,351 of income), and then I come back in January and force you to vote the rates back down for all income under $250,000.

You can’t stop me and my base gets the total win they want [note, not the win Obama wants, the win his base wants].

b. Or John, you can kiss Grover goodbye, publicly, and endorse a small tax increase. I’m happy to find a rate that’s too small to care about but large enough to sell as a win to my base.

Pick one.

Notice that this is predicated on Obama threatening let the 2001-2010 tax cuts expire, but then not doing it in order to get something else. If he actually does let the tax cuts expire, he loses his leverage and this deal is off. In other words, if he wanted to raise taxes, he’d just sit on his hands. That’s his ace. He’s using his ace to break Grover Norquist instead.

The second piece Obama wants is to shrink the social insurance safety net. He’s wanted this since forever anyway, since at least 2006 by my count, when he was one of Wall Street’s favorite freshman senators (that’s Robert Rubin he’s saying “Hi Bob” to). He’d really like to get at Social Security — his 2011 offer to Boehner included that piece — but recent reaction to that part has made it toxic (thank you, progressives!).

So he’s making a run at Medicare. The Klein-specified deal takes a whack at Medicare, his surrogate Dick Durbin has taken another whack, and on and on. This is the bitter pill that Obama is hoping to force down the throats of his base — cleverly disguised as a “concession” to Boehner.

So the second part of Obama’s offer to Boehner is this:

John, I know raising taxes is a heavy lift for you. But I can make it happen anyway, and you can make it less damaging for the wealthy.

As a sweetener, I, a Democratic president, offer to start cutting the safety net. I’m doing this for you. You can hang that around our necks forever. You do your piece, and I’ll do mine. Tempted?

In fact, cutting Medicare does work as a concession to Boehner — a very tempting one indeed, as Jonathan Chait pointed out. Just as professional Democrats drool at the thought of Norquist’s demise, Republicans drool at the start of the end of all social insurance in America:

[Cutting benefits by raising the Medicare eligibility age] has weirdly disproportionate symbolic power, both among Republicans in Congress and establishmentarian fiscal scolds. Mitch McConnell and Erskine Bowles alike would regard raising the retirement age as a sign of serious belt-tightening and the “structural reforms” conservatives say they need. Meager and inefficient though the savings may be, they pack a lot of punch in delivering Republican votes.

The fact that Obama — a Democratic president — is offering to put the first knife in the back of a signature Democratic insurance program is like porn with a pony inside to many in both parties (note that both McConnell and Bowles are named above).

So this is the two-part offer from Obama to Boehner. And both parts are needed — they work as a set. Your pain, that bitter pill, is a necessary part of Obama’s offer.

That was a lot of words, however. Just in case it’s not obvious what this Obama deal actually contains, let me restate it in simpler terms.

Obama’s offer to Boehner — let’s each kill one of our own

If all of the above is right, this is Obama’s offer to Boehner in a nutshell:

I’ll kill one of my best sheep, if you kill one of yours.

The sneaky fact — Obama doesn’t really like sheep. In fact, if you got him after three or four beers, he’d tell you he’s been trying to sell them off for years. Can’t stand the little buggers.

What does that make this deal for Obama? A double win; he gets two things he wants. What’s the only thing in his way? Actually playing his ace — ending the Bush-Obama tax cuts for the wealthy — which prevents him from getting either of the pieces he’s playing for. Yes, fans, only you want to kill those upper-class cuts. Obama wants to trade not killing them for (a) Grover’s head on a plate and (b) the beginning of the end of social insurance.

Again, your pain is a necessary part of the offer.

That’s stark, I know, but no one’s making him do it, and he can stop at any time.

What should you do?

Your job is to tell the truth about Obama and his deal. Tell it to Democratic office-holders. Tell it to your friends.

First, watch the deal as it emerges. If it includes cuts to Medicare (or any other safety net program), make it toxic for Democrats; force them to walk it backSenate phone numbers here. House phone numbers here. Use them. There’s information here about how to stop the deal in the Senate.

Update: CREDO action here — click to help out.

Second, if the deal does contain these cuts, tell the truth about Barack Obama:

He did it because he wanted to. He went after Medicare because he wanted to. Barack Obama placed the first Democratic knife in the safety net — because he wanted to.

He got something only he and NeoLiberal Democrats wanted, and left his people high and dry; many he left to die.

Can you do that? If it’s the truth, I think you can. If it’s the truth, you don’t need anyone’s permission — just courage.

In my view, the job of the next four years is to tell the truth. There will be other jobs, but the first job is this one. Anyone who describes Obama-Boehner (if it goes down that way) as a compromise on Obama’s part is covering for him, deliberately or not. The only way Obama can sell this to you and escape scot-free to Legacy Land, reputation intact, is to convince you to see him as “forced to compromise”  — and then to tell your friends that convenient little lie.

I’ll say that again. If Obama gets something like the deal Klein detailed, and we call it a “compromise,” we’re complicit in Obama’s cover story, intentionally or not.

Sir, you can prove me wrong. Make a “fiscal cliff” deal that doesn’t contain a “bitter pill” or a knife between the shoulders of social insurance. Et tu, Brute? Make me wrong, and I will eagerly say so.

But if you don’t make me wrong, this is the story I will tell. I hope to have company telling it. (“Clear-eyed to the point of madness” right? That applies to Democrats too.)

Next  up — Who’s in Obama’s Veal Pen 2.0?

GP

To follow or send links: @Gaius_Publius


Gaius Publius is a professional writer living on the West Coast of the United States. Click here for more. Follow him on Twitter @Gaius_Publius and Facebook.

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  • http://twitter.com/Andys184 Andrew Symonette

    Obama needs to be erased immediately he has been killing off people left and right. Ron Paul was on his secret kill list why else he drop out? People feel threaten against this nignog, so he must be contained soon before the CIA/NSA puts a hit out on anyone/everyone else.

  • http://adgitadiaries.com/ karmanot

    “67 on Capitol Hill is NOT the same as 67 in the regular world,” Very true. This move will cost lives among low income citizens and wipe out any savings they may have. I just went through this two months before my 65th birthday and lost my entire life’s saving in only 4 ER visits. Obama acts like a sociopath. But, I’m not surprised, he kills indiscriminately by drone stealth and takes upon himself the absolute power of life and death over any citizen he targets.

  • ezpz

    I see a lot of the usual suspects on that list.
    Thanks for the link.

  • http://adgitadiaries.com/ karmanot

    Many of us are too old and ill to raise much hell, but I consider the Obam Demos as mortal enemies, who are willing to let us die and in poverty. It was clear to me when they accepted the statistics that some 40 thousand a year would die until the 2014 Obama Care kicks in.

  • Naja pallida

    The way he is “negotiating” you would think that nobody bothered to tell him he won.

  • schotzki

    I have one question. Does this President know that the election is over? Every time I’ve heard him speak post-election it sounds like the same campaign rhetoric we heard for months. Empty promises & false hopes. Somebody please tell him that the election is over!

  • themomcat

    The reason the public option was not included in the ACA was to enable the privatization of Medicare. By slowly raising the eligibility age to keep more seniors in the market place for private health care insurance and cuts to hospital and doctor reimbursements, the goal to end Medicare is moves to fulfillment.

    A comment in David Dayen’s piece on Medicare this AM explains just what the Obama plan is and exposes the architects.

    http://news.firedoglake.com/2012/12/10/medicare-eligibility-age-increase-rejected-by-obama-allies/#comment-224113

    Don’t let the title of David’s article fool you, Durbin supports raising the age to 67, he just couches his answers very carefully.

  • Sweetie

    It still cracks me up that the media tried to spin that guy as being some sort of hunk. Hahahahaha

    He’s about as hot as a praying mantis.

  • Sweetie

    This country has been done for a long time now. Stick a fork in it. The resources are up for grabs.

  • Sweetie

    “If we need to cut benefits…”

    We don’t.

    We do need to cut one entitlement, though. The entitlement the rich feel to loot the nation.

  • lynchie

    It is about satisfying his owners.

  • lynchie

    and pass it along in the way of bribes, off shore accounts and massive amounts disguised as campaign donations.

  • AnitaMann

    I’ll be worked up once something is agreed upon. Until then it’s all Kabuki theater. Or more appropriately, Grand Guignol. And please remember, this is Ezra Klein. You trust him because, why?

  • http://www.rebeccamorn.com/mind BeccaM

    Let’s call this what it is: A betrayal of the Medicare promise, a program into which most of us have paid our entire working lives. And secondly a massive cost-shifting.

    Essentially, it is a tax on being old. Rather than the guaranteed Medicare coverage at reasonable government-controlled premium rates, you’re abandoned to the tender mercies of the private for-profit market where your rates, deductibles, and (if you’re sick) yearly out-of-pocket maximums are going to be astronomical. Even if we were to assume current PPACA numbers, the yearly OOP maximum is about four times higher than on Medicare.

    For the poor, this is going to kill people. For the not-quite-poor, it is going to result in poverty for many. For the middle-class retired, it is a huge regressive tax. For the rich plutocratic bastards? It’s why they won’t be asked to pay a couple percent more in federal income taxes, which they wouldn’t really have noticed anyway.

    In talking with others and in my letters to Congress, here’s the term I’ve taken to using when referring to this proposed cut in Medicare: The Senior Citizen Surcharge — a medical tax on being old.

  • Naja pallida

    Well, I think Obama is hoping that those 65 and 66 year olds will be dumped back into the exchanges under the Affordable Care Act, thus making that program seem more effective than it really will be… but it should be noted, that because of the various ways Medicare is able to keep costs down, that the open insurance market is incapable of doing, effectively means that the 5 billion in savings for Medicare translates to about a 12 billion increase in cost spread over individuals, employers, and states. That’s effectively a multi-billion dollar gift to the health care industrial complex, because almost all of that extra cost goes directly to them. So… in the long run, that there is any net benefit to the country at all is an abject lie.

  • Naja pallida

    It is pretty definitive by now, that nobody currently in government has the ultimate goal of health coverage for all Americans. There is absolutely no eleventy-dimensional chess on the issue. They all want and are actively working toward less people to be covered, and for it to cost more so the insurance industry, health providers, and pharmaceutical companies can continue to rake in huge profits at the cost of lives.

  • cambridgemac

    FDR brought us the New Deal. Obama brings us the New Steal.

    Good times for Yacht-owners and million dollar jobs on Wall Street for the President and his cronies. His buddy Peter Orszag showed everyone the way already.

  • GaiusPublius

    And I you. Thanks for being a reader.

    GP

  • nicho

    If we need to cut benefits, let’s start with Congressional pensions. Let them put a part of their bloated salaries into the Wall Street Casino like everyone else has to do. There is no reason they should be able to live like medieval princes on the taxpayer dime for the rest of their lives.

  • SuznAZ

    Raising the Medicare eligibility age would mean the pool of covered individuals includes fewer younger, healthy people, the law of large numbers says the costs will skyrocket. It would be almost as effective at killing medicare as Ryan’s vouchers. Perhaps though the ultimate goal is really universal coverage for all Americans. And we have “earned benefits” we’ve paid into for a working lifetime not “entitlements”.

  • KingCranky

    Raising the medicare eligibility age, thereby shafting those who paid into the system by denying the deferred benefits suddenly precluded right before collection, is robbery of unwilling victims, as surely as if done with a gun.

    67 on Capitol Hill is NOT the same as 67 in the regular world, especially the world of hard labor.

    The Democrats up for reelection in 2014 need to ask themselves why they’re willing to take the hit for Obama if this policy comes to pass, just what does the party gain by such a stupid action when Obama himself won’t suffer the same result?

    Sure, here in Texas, I’ll never vote for the Republican candidate on the state or federal level, but that doesn’t mean the Democrat automatically gets that vote not cast for the GOP.

    And if this deal doesn’t go through with the bogus “fiscal cliff”, the possibility arises again with the Obama Administration’s decision not to use the 14th Amendment in stopping the GOP from insisting on shredding the social safety net before agreeing to increase the debt ceiling limit.

    It’s infuriating that President Obama, who has seen the positive effects of the social safety net for his own mother and himself, is so hellbent on denying it for others just as deserving.

  • guest

    Raising the Medicare eligibility age is fraudulent politics. It will not “save” any money. It just moves the cost problem around. Those remaining in Medicare will pay more, because the program will warehouse the sickest. And, the only way it can be politically saleable is to grandfather in people over a certain aga — say 55 – all of whom vote. The silver-lining may be that the news that’s coming across is that the eligibility age rise will kick in immediately — which may help make the whole idea politically toxic in the public mind. The real strategy — to attempt to buy off those nearing retirement while suckering into assent those supposedly too young to care — is cynical and would just leave younger generations out in the cold. Indeed, the entire rhetorical framework for this discussion is toxic, and we’ve let it become that. Social security (and so far, I believe the President when he says that’s off the table) and Medicare are “entitlements” only in the sense that they’re earned benefits — rooted in a transgenerational contract in which, during our working years, we pay into the system to take care of our elders so that they won’t bankrupt us either financially or morally — with the expectation that succeeding generations will assume the same obligation for us. In this context, calling these programs “entitlements” is simply poisoning the well. Medicaid, on the other hand, is not properly an entitlement at all. It’s welfare. That doesn’t make it bad. The debate ought to be over the minimum level of care we don’t let anyone fall below and how we provide it. And we’ve already answered that question for people who reach the age of 65. The problem that remains with that answer is not the program itself, but its costs, and the solution to the problem of costs begins with taking on Big Pharma and going on from there to rationalize the medical care delivery system, not in dismantling the program.

  • FLL

    @ Gaius Publius: Thank you for your continued links to Obama’s 2006 speech at the launch of the Brooking Institute’s “Hamilton Project,” where he said that “Too many of us have been interested in defending programs as written in 1938.” When this issue comes to a resolution within the next few weeks, don’t be surprised if both the mainstream media and the liberal blogosphere begin discussing the elephant in the room: the life expectancy in 1938 vs. 2012. 65 years of age meant one thing in 1938 and something completely different in 2012. I’m just giving you a heads up so that you can start writing your rebuttals now. Aren’t I helpful? What would you do without me? Cue the dozen or so negative votes for this comment.

  • A_nonymoose

    I don’t believe this. Yet. We’ve gone on and on about how clueless the pundit class is — why should we believe this one? Because it’s what we think is going to happen? Because it’s what we expect to happen? People are getting worked up over this, and rightly so, if it’s the truth. My question is: Is it the truth? Why should we believe this guy, Ezra Klein? What does he know that no one else does? What are his sources? That’s all I’m asking — why should I believe him?

  • UncleBucky

    If I call the White House, could you add a text we can read? I have already called there, but I realized I needed a more concise text. I have already called my Federal Reps, Durbin, Schakowsky and (why bother, a GOPer?) Kirk.

    There it is.

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