Deficit/Budget/Spending/Taxes/Medicare/SC Mega-deal

Oh to be a fly on the wall in the White House.

Any predictions?

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http://www.cnn.com/2011/OPINION/07/08/gergen.debt.negotiations/index.html?hpt=po_t2

The stakes are growing ever higher on deficit negotiations in Washington. And as
they do, the politics are becoming ever more treacherous, especially for Democrats.

When President Barack Obama gathered with congressional leaders Thursday at
the White House, almost everyone there agreed that it would be good to strike a
grand bargain reducing deficits by $4 trillion over some 10 years. If you worry --
as I do -- that the country is sliding toward a debt crisis, their enthusiasm for a
mega-deal is welcome news.

House Speaker John Boehner told his Republican caucus Thursday morning that he
thought the chances of reaching a big agreement had risen to 50-50. While little
bargaining went on at the White House meeting, Boehner reportedly left still
believing those odds.

But a closer look suggests the chances of getting there seem much lower. Success
rests heavily upon either the Republicans or Democrats caving in on their public
positions -- and in the case of Democrats, not one but two caves. It is hard to
imagine either party giving in enough.

Leading Democrats in Congress have long argued they will agree to massive
spending cuts only if Republicans agree to tax increases. Lately, Democrats have
been floating the idea that the GOP should agree to as much as $1 trillion in
revenue increases as part of the $4 trillion package. But Republicans are virtually
united in opposing any tax increases, much less $1 trillion. It is almost impossible
to foresee them backing down now, no matter how many sweeteners they are offered.

In fact, what Republicans actually hope is that the Democrats will once again give
in, led there by the president. That is what happened last year when Obama
persuaded his party to give up on tax increases on the affluent and instead
continue the Bush tax cuts for everyone. Boehner's 50-50 estimate appears to rest
on the chance that a similar scenario will unfold now -- that Obama will cajole his
party into big-time compromises.

But that possibility is exactly why so many liberal Democrats are angry. They
worry Obama is once again surrendering before he has even begun to fight. And in
the process, they think, he may be undermining their chances of holding the
Senate and regaining the House in 2012.

It's easy to understand why they are so unhappy. They believe that the GOP
handed them a great cudgel for next year's elections when House Republicans
voted in favor of the Paul Ryan deficit plan, including its bold but controversial plan
to transform Medicare. House Minority Leader Nancy Pelosi recently proclaimed
that there would be three big issues in 2012: Medicare, Medicare and Medicare.

Democrats are itching to run as protectors of Medicare and Social Security; they
just love to argue that the mean, ol' Republicans want to balance the budget on
the backs of the elderly and the poor while preserving tax breaks for fat cats. That
theme has played well for them, so far.

Now, from their point of view, along comes Obama proposing Medicare cuts and
even putting Social Security cuts in play as part of a mega-deal. Democrats in
Congress complain bitterly that not only did he not consult them in advance but he
could now compromise the heart and soul of their 2012 campaigns.

And what does he get from Republicans in return? Not a damn thing, they say --
just some billowy talk. One Democratic partisan said privately that he still likes
Obama but he never, ever wants him to negotiate on his behalf for anything.

In effect, as they recognize, Democrats on Capitol Hill may be facing a double
vise. Their own president is asking that they be willing to cut back entitlement
programs. And there is a very real possibility that if Republicans hold tough on
significant tax increases, the White House may be so hungry for a deal that Hill
Democrats will be asked to accept that, too. That's two caves too many for a lot of
Democrats.

From afar, it appears that Obama is now operating on a different political calculus
for 2012 than his congressional party. He needs to win over independents -- and a
mega-deal reducing the deficits could be a huge plus for him. But congressional
Democrats need to have a fired-up base, and that means not caving in on
entitlements, especially when there is so little in return. Even if Obama is just
posturing, talking big now so he gets credit for trying, his strategy is not a happy
one for the left.

Putting all of this together, the odds seem long -- certainly below 50-50 -- that the
White House and Congress will agree on a mega-deal, as good as it would be for
the country. Instead, it appears far more likely they will eventually settle upon a
short-term fix. Nobody will be very happy -- and some Democrats will still be
steaming.

The opinions expressed in this commentary are solely those of David Gergen.

Originally posted by wittywonka
Any predictions?

Well, one could view this as the last chance for our leaders to restore some credibility for themselves, to put the country before their careers, make the hard choices, hold hands and jump off the cliff together. Oh yeah but there's an election coming, so I predict they won't.

I really hope I'm wrong though.

I don't even want a deal anymore. Let the country default; if there will be increases in defense spending and no tax increases on the wealthy to offset massive cuts in social spending and nothing done to address the structural unemployment problem as part of any deal the Republicans will support, screw it.

Let the whole rotten house of cards fall.

Originally posted by no1marauder
Let the whole rotten house of cards fall.

I think there's a lot of folks on the left and right that agree with that last line, for different reasons of course. Our government is corrupt, and our leaders have no credibility. Those on the right are probably saying something more like "If the govt is going to keep insisting on taking even more of our money away and pissing it away on things it has no business doing in the first place, all while representing only those in unions and corporations, then screw it, let the whole rotten house of cards fall."

One nice thing about the current situation - I don't feel guilty when I can't find work any more 😉

Originally posted by AThousandYoung
One nice thing about the current situation - I don't feel guilty when I can't find work any more 😉

Can't you blend in at the Home Depot and have patriotic Americans give you sub-minimum wage work?

Originally posted by no1marauder
Can't you blend in at the Home Depot and have patriotic Americans give you sub-minimum wage work?

They don't make less than minimum wage. They're paid well when we need them for labor ($10-$20/hr). However, I have been told I was more "handy" than the last Home Depot guy my friend hired (I helped Spackle and drywall) so he told me I could have the work next time if I wanted.

What they don't have is regular work for the most part.

It's never been different for me. I don't remember the days of milk and honey. I remember poverty from day 1. More illegals = more hands to work the guillotines. More ignorant people that society desperately needs educated. Job security for an educator comfortable with poor minorities. There's no better alternative that I know of.

If the system is broken, and we let the house of cards collapse, that means the border laws can be ignored with impunity. Rich people won't allow the government to function properly so screw it.

With respect to "blending in" - they have been brought up to see white people are managers (as well as soldiers and conquerors). They work for us, we provide the jobs, we both make money. And, of course, they speak a white man's language. Just not English. And they're Catholics. A white peoples' religion.

😉

I'm in for "let it crash and burn".

If we have a debt limit, why? Is it Constitutional? Can the President Constitutionally spend money without House approval?

Why are taxation levels which ran the government in the past not high enough? If some people are asked to pay more taxes, why should it be those who already pay the most? Especially when some don't pay any taxes at all?

If there are discressionary spending amounts, why can't Congress at least stop those? How about getting out of three wars? And when all this isn't enough, then take a look at the entitlements, which at some point will become unsustainable.

I suspect that a deal will emerge, which will contain trillion dollar cuts over 10 years. Please, don't rely on the ignorance of Americans. Those cuts will be from baselines of up to 10% and sometimes higher budget line items, and the baseline includes Obama's stimulus in the last budget. We are spending about $1.6 trillion over our receipts, so to reach balance never mind retiring the debt, the ten year amount has to be $16 trillion if they are serious about stopping the slide.

What will be done? As usual, they'll kick the can down the road.

Social Security won't be touched because the advocacy groups are doing a pretty good job explaining that it adds nothing to the deficit, and will remain solvent so long as the general fund pays back what it borrowed from American workers.

The Republican mainstream will ditch the Tea Party, but provide for cover for its Presidential candidates to vote against a raise in the debt ceiling. Their own economists have screamed too loudly to allow the default. And they don't want to let Obama look decisive by exercising the "nuclear option," whether it's Constitutional.

I don't know if Obama will cave and cut into Medicare. I hope not.

Some tax loopholes will probably be closed up, but nothing really significant.

If you notice, Republicans only made an obligatory noise about the jobs report yesterday. They don't want to lose the narrative about the deficit being the primary economic concern, which Democrats have lamely ceded. Even though they were elected on the issue of jobs, their line is that if you lower the deficit it will create jobs, which is really Mickey Mouse economics which have long been debunked. Job growth eliminates deficits. But job growth would cinch the election for Obama given the motley crew of GOP choices.

For me the real question is whether Republicans will sign off on a payroll tax break to stimulate jobs. It's the first time Republicans have opposed lowering taxes since Clinton was in office.

Originally posted by Kunsoo
Social Security won't be touched because the advocacy groups are doing a pretty good job explaining that it adds nothing to the deficit, and will remain solvent so long as the general fund pays back what it borrowed from American workers.

The Republican mainstream will ditch the Tea Party, but provide for cover for its Presidential candidates to vote again ...[text shortened]... It's the first time Republicans have opposed lowering taxes since Clinton was in office.

"advocacy groups are doing a pretty good job explaining that it adds nothing to the deficit"

The two biggest budget items are defense spending and entitlements.

"will remain solvent so long as the general fund pays back what it borrowed from American workers."

I'm glad you understand that a good part of the debt is the obligation of the General Fund to Social Security, but also understand that the debt obligation is accounted for as an asset and not something outside of the system. Underwriters are fully counting the treasury's debt to SS, and it still is underfunded and going broke. Of course if the General Fund goes bankrupt, then those treasury notes in the SS trust fund become worthless paper.

"I don't know if Obama will cave and cut into Medicare. I hope not."

He already did, to paper over the deficit spending in his health care plan.

The proposed payroll tax holiday, would be unlikely to change behaviours it being temporary. And it would erode the viability of Social Security far more than GW Bush's proposal for individual accounts did.

Originally posted by wittywonka
Democrats are itching to run as protectors of Medicare and Social Security; they
just love to argue that the mean, ol' Republicans want to balance the budget on
the backs of the elderly and the poor while preserving tax breaks for fat cats. That
theme has played well for them, so far.

The correct term is "throw grandma off the cliff". The GOP would like nothing better than to be able to throw your grandma off the cliff as a recent Democrat add indicates.

Personally, even though this sounds a bit harsh, the reality is that less grandma's equal less debt related to medicare expenses, so in the long run the nation will be better off without all those grandma's financially. OF course, I know the next question, what about the Grandpas? First of all, I feel that grandmas are much easier targets. Second of all, once they lose their spouse statistically they usually die soon after anyway. That equals a win/win scenrio if you ask me.

In short, if we can do to the elderly what is being done with the unborn, we can nix these nonproductive leaches from society and save medicare/medicaid.

Originally posted by wittywonka
[b]Oh to be a fly on the wall in the White House.

Yea, it kinda has the appeal of an outhouse at a construction site in mid August. It's what they call, "Fly heaven" 😀

Originally posted by whodey
The correct term is "throw grandma off the cliff". The GOP would like nothing better than to be able to throw your grandma off the cliff as a recent Democrat add indicates.

Personally, even though this sounds a bit harsh, the reality is that less grandma's equal less debt related to medicare expenses, so in the long run the nation will be better off witho ...[text shortened]... the unborn, we can nix these nonproductive leaches from society and save medicare/medicaid.

What policy do you suggest with regard to the elderly?

Originally posted by normbenign
"

The two biggest budget items are defense spending and entitlements.

I don't know what you mean by "entitlements," but Social Security pays for itself.

Originally posted by FMF
What policy do you suggest with regard to the elderly?

I thought I covered that. The GOP wishes to throw your grandma off the cliff. They uncovered the scheme in a recent add.

YouTube

Just a word of caution for the faint of heart, it is a bit graphic. To be perfectly honest, I'm not sure it is such a good idea to film these things even though I agree it must be done. Just some food for thought for the GOP next time they throw grandma off a cliff.