Associated Press
As fiscal talks in Washington continue, it's generally wise not to react too strongly, one way or the other, to various offers and counteroffers. There's a high degree of fluidity to every relevant detail, and provisions are constantly changing. Two weeks ago, for example, a lot of folks seemed convinced that President Obama was poised to accept an increase in the Medicare eligibility age, and now that idea is apparently "a line White House is unwilling to cross."
That said, while the caveats are important, there is ample evidence that Obama and House Speaker John Boehner (R-Ohio) are inching closer to a deal.
President Obama delivered to Speaker John A. Boehner a new offer on Monday to resolve the pending fiscal crisis, a deal that would raise revenues by $1.2 trillion over the next decade but keep in place the Bush-era tax rates for any household with earnings below $400,000.
The offer is close to a plan proposed by the speaker on Friday, and both sides expressed confidence that they were closing in on a major deficit-reduction plan that could be passed well before January, when more than a half-trillion dollars in automatic tax increases and spending cuts would kick in.
This is no small concession of the president's part. He proposed higher marginal top rates on income above $250,000, while Boehner counter-offered with a $1 million threshold. Obama, despite a strong public mandate on the issue, has moved his figure to $400,000 in this latest offer, with the expectation that the Speaker will be similarly flexible.
The president has also lowered his overall tax revenue target to $1.2 trillion, from his initial offer of $1.6 trillion.
On the other side of the ledger, Obama is offering $1.2 trillion in spending cuts, including $400 billion in health care savings, $200 billion from other mandatory programs such as farm price supports, $100 billion in military spending cuts; $100 billion from domestic programs, $290 billion in savings from lower interest on the debt, and $130 billion is savings from "chaining" the Consumer Price Index. More on that in a moment.
As part of the same package, the president would expect an extension on unemployment benefits, new infrastructure investments, another Alternative Minimum Tax extension, and a two-year debt-ceiling increase (it'd be up to the administration to do the paperwork, though Congress could try to vote for default if it wanted to).
Is this a good deal? At a certain level, it doesn't matter, since Boehner says it's not good enough and it wouldn't pass the House. But since it may very well serve as the framework for an eventual agreement, it's worth paying close attention to its most glaring flaws.
From a progressive perspective, "chaining" the CPI is obviously the most problematic element. For many Democrats in Washington, there seems to be a sense that some kind of entitlement cut will inevitably be part of any bipartisan deal, and that the CPI measure is arguably the least offensive of bad options, but that's not much of a defense.
Brian Beutler had a good summary on this.
As part of a deal that would include higher taxes on top earners and an increase in the debt limit, Republicans are pushing a plan to index Social Security benefits and perhaps tax brackets to a slower-growing measure of inflation called chained CPI.
The plan would reduce Social Security spending by over $100 billion over 10 years by reducing cost of living adjustments, and potentially increase tax revenues by hastening taxpayers into higher tax brackets.
Though progressive advocates staunchly oppose the move to chained CPI, aides note that there is a broader consensus in the center-left and conservative policy communities for re-indexing Social Security benefits, particularly by comparison to raising the Medicare eligibility age -- the GOP's other, more controversial benefit cut proposal. For instance, the liberal leaning Center on Budget and Policy Priorities has conditionally endorsed the chained CPI proposal.
As such, Democrats will be less likely to support chained CPI unless it's tied to certain conditions -- including an extension of emergency unemployment benefits, and a guarantee that the benefit reduction be used to shore up the Social Security trust fund -- not to reduce U.S. budget deficits.
For a primer on what a chained CPI is all about, this WonkBlog item is helpful, as is this piece from Tim Noah.
For what it's worth, the New York Times noted that Obama is "insisting on some protections for what he has called the 'most vulnerable populations,'" as part of this CPI provision, but it's unclear at this point what those protections might be.
There's a surprising amount of behind-the-scenes activity on this -- after quite a bit of silence -- and we should know more fairly soon, including whether the entire process will completely fall apart.
Leave a Comment:
I say no deal. Obama has already given too much. The House will want to hem and haw no matter what Obama concedes, so stop right now. Let 'em think about it over Christmas.
It will be a good deal if you look at what Steve reports. In any case, when the Kochs see that they can't get anything better, they will allow the T.E.A. controlled House to vote to approve it. It's all about POWER, largenose. And the Kochs still have a lot of power. But Obama is nailing their hides to the wall and will do more in the months ahead.
C'mon. Obama nailing their hides to the wall? That's just deluded. Get serious. Obama is fighting -- FIGHTING I TELL YA -- to make the Bush tax cuts for 99% of the population PERMANENT. And he's cutting Social Security benefits in this great "fight" for the middle and lower income class.
Can you say TOTAL VICTORY FOR GEORGE W BUSH AND REPUBLICANS who caused the fiscal problems we have with "starve the beast?" Yes, you can. Now they're Obama's tax cuts. And Obama is the one being fiscally irresponsible. So now, not only will Republicans be able to truthfully blame serious deficits and debt on irresponsible fiscal Democratic policies like those tax cuts, they'll still continue to blame it on Medicare, Social Security, and the rest of the safety net and will continue to trash it. Unbelievable. Just unbelievable. Obama just brought his 1st debate performance and now using it for governing in his 2nd term. Was this why anybody voted for him?
Obama blew it again. What a surprise, huh? His deal should have been only another extension of the tax cuts for below $250,000 and raise the taxes on the upper income brackets. But we're dealing with Obama here. He's a damned Republican, now no better than W on fiscal responsibility and guaranteeing Republicans will proceed unimpeded on the path they've been on for the last four years. Obama enables them.
Near disaster. But that's what you get with spineless Democrats. Learned nothing from 2010 and seem to very much want a repeat.
Everybody should be making noise to scuttle this deal.
ANY deal that includes Social Security or Medicare cuts in a bad deal. If Obama wants 2014 to be a rerun of 2010, with a dispirited and disappointed base, then he should agree to cut those benefits. He'll get his wish.
Obama has no good reason to negotiate away anything of value at this time. Wait until January 1. The economy isn't going into a nosedive. Any decline will be gradual, and can be reversed by reinstating lower tax rates for the 98% and undoing some of the less sensible spending cuts.
The media and the financial community are both doing the Republicans' bidding. It is in the Republicans' interest to get a quick settlement, especially one where Obama does what he so often does in these types of talks--gives away the store and gets little in return.
If there's anybody who's spineless, it's left-wing whiners like you.
You're the one who hasn't learned anything. And you mentioned 2010 and how the Democrats want a repeat. So, what are you going to? Sit home in 2014 like you did in 2010? What did sitting at home get you? Scott Walker, Rick Snyder, the War on Women, the Debt Ceiling fiasco, GOP voter supression and gerrymander. So, are you going to disengage again because you're "DisgustedWithItAll" and let the GOP take over even more ground. Go right ahead and do exactly what they want you to know.
But, hey, you know what, "DisgustedWithItAll? 10 years from now when you're holding up Obama as either a hero or a martyr, liberals like me will be there to reminder you all the BS you spewed against him when he was actually in the White House. The same happened to Clinton, Carter, Johnson, and FDR. All of these presidents were hated by far left whiners like you when they were in office only to be glorified long after they left. So, please save your "concern."
And to mpguy who made this ridiculous comment:
"...especially one where Obama does what he so often does in these types of talks--gives away the store and gets little in return..."
This is not the way Obama negotiates. If this were so, unemployment benefits would not have been extended in exchange for continuation of the Bush Tax Cuts. But, hey! It's so easy to think this is "giving away the store" when you're not the one in the unemployment line.
Even under the "liberal" COLA rules for Social Security, my "cost of living" adjustment went up a whole $18.00/month.
Have any of these scum noticed that the cost of food has gone up 30 percent in the past year??? What the hell are we supposed to eat????????
As someone who was a successful writer (in terms of income) I was looking forward to a better retirement than I am after Bernie Made Off with it. Social Security is the one thing people can depend on, and now these scum and that spineless POS I voted for want to give me the option of living on air and eating grass.
Those tax cuts are like a hangover the kind you get when you have spent the whole weekend doing shots of Tequila and eating jalapeno sausages with cheap strippers.
You wake up in the Denny's parking lot with with no money, you feel like your ass is on fire and you realize that nothing was nearly as sexy as it looked at the time...you just hope that no one has pictures.
LMAO
Coffee all over the computer screen!
The problem is that Boehner's not the guy Obama needs to strike a deal with. If Cantor and Ryan aren't signing on, then all we're doing is shifting the starting point for the real deal.
That's part of the Republicans' game. Obama makes concessions with Boehner, who can't get the House to agree. So Obama has to start from that point and make more concessions in order to get a "deal."
Agreed. They are putting him through the "good cop, bad cop" number. Social security is not a part of this equation as it doesn't contribute to the debt and can be simply cured through a minor increase in the cap. That's a non-starter.
Obama: "Okay, Mr. Speaker...I'll offer 5 cents in spending cuts and my college records. That's my final offer before Christmas"
Great, so now we DO negotiate with terrorists.. I wish the President would send in seal team 6 on these A-holes. Touch Medicare or Social Security and you might as well all be dead..
I am with you on these "negotiations with terrorists"! President Obama won re-election due to his stance on tax policy - hold fast Mr. President, let the GOTP take US off the curb, WE will remember and WE have your back! Stop pacifying the 3 year olds having temper tantrums! Spank their legs and move on, period!
I think the government should tax all small business owners (job producers) in this country until they are out of business. Then none of us will have to worry about a job to go to each morning!!
This is what Congress and President are proposing.
Idiot.
Agricultural price supports.
Folks included in this part of the bill is the same old paying farmers NOT to grow crops, but even more galling, paying the likes of Cargill and ADM to produce ethanol. The later is the equivalent of giving money to the oil companies.
I work in the food industry. Food grade ethanol is produced the same way that ethanol for gasoline is produced. They add things to make the later unfit for human consumption. Ever since the gasoline use came about, the food ethanol has been in short supply at huge costs. These companies are making a ton of money, yet we're still giving the more.
So we give them a smaller tax hike and they give us what exactly? This is not negotiating, it's the same crap we've been doing. Appeasing them to to make them happy, f*ck that. Damn a deal and just drive the entire bus off the damn cliff, curb or whatever you want to call it. Because seriously this whole thing about Bush Tax cuts is absurd, how in the hell are we still arguing over something that was never suppose to be permanent in the first place?
I wonder if the President remembers when the COLA was raised because retired people were eating dogfood (literally) to save money?
It is called a negotiation, and I haven't seen where Obama has caved on medicare. The Social Security thing is significant but for those who don't realize it over the last 20 years we have been upping Social Security payments to the point that we have pulled most seniors out of poverty. They are now out of poverty and I can see no reason why we need to keep pushing the benefits up faster than real inflation.
Yeah - the Seniors have been living high on the hog.
This is TERRIBLE.
favedave, I doubt seriously know you anything more about how Seniors are living than Ron Byer does.
nabsentia
That doesn't even mean anything. Geeze - get a clue. How would you know what either Ron or I am aware of?
Because I know that liberals like you are just as out of touch with average people as the GOP is.
Well, well, Ron Byers, who I used to consider an intelligent commenter, finally shows his "Peter Principle" moment if ignorant stupidity.
The average Social Security payment is $1,000/month. How that is "out of poverty" given that for the majority of people getting Social Security, their monthly check is the majority of their income, is beyond me.
"Boehner Intends to Pursue a 'Plan B' on Taxes
House Speaker John A. Boehner, playing hard ball only days before the nation heads into a fiscal crisis, will tell fellow House Republicans that he will move forward with his own tax plan in the coming days to increase tax rates only on income over $1 million, then shift the fight on spending cuts to early next year when the nation runs into its borrowing limit.
Congressional aides say Mr. Boehner will call for a “Plan B” to raise the pressure on the White House to lower its demands on tax increases and raise its pledge on entitlement cuts. President Obama on Monday said he would come down to $1.2 trillion in tax increases over 10 years from his initial $1.6 trillion. He also said tax rates should rise on incomes over $400,000 a year, up from the $250,000 level he has campaigned on for more than four years."
SOS- same old @!$%#. Let them go home with no deal. Obama seems to be negotiating with himself again.
No deal.
Who won the election?
Weren't Medicare and Social Security off the table?
Why did I vote Democratic?
This feels like a knife in the back - because it is.
You voted Democratic because you knew better.
Yet, you still expect change to be quick and easy. And you're already saying that you've been stabbed in the back and a deal hasn't even been reached yet! Drama queen alert!!!
Hello, favedave! Welcome to the real world of politics.
Sorry, you're disappointed. But, when you have unrealistic expectations and a little knowledge about how our system of government works, disappointment will always be a constant companion.
In the real world of politics you don't give the house away when you've got the upper hand.
Here's a bit of the real world for you - Carney - Obama's press secretary said that Social Security was not going to be part of this deal.
http://www.dailykos.com/story/2012/12/18/1171584/-White-House-said-Social-Security-should-be-off-the-table-in-cliff-talks
Now it is being offered by Obama as part of the deal. That's what I call being stabbed in the back.
It's clear that you're just another apologist for Obama that flies into a typing frenzy whenever he is criticized.
This is not how Obama negotiates. He negotiates in a way where he does get something in return. You are confusing him with Bill Clinton.
Besides, you really don't know how negotiations work, do you? A deal hasn't been struck yet and you're already calling betrayal. Shut up and calm down!
You are going to have to be a better source than Daily Kos if you expect me to be impressed.
Read the transcript.
Obama lied to us. It's there in black and white.
What's the matter with you?
Really? I certainly haven't seen this.
Who are these center-left folks that think this is good policy?
Steve - this sounds like you're just in the President's pocket. Too bad - I had a lot of respect for you.
While Steve Benen has long been noted for his Obamanaut tendencies, he is just reprinting what was published elsewhere in what you criticize.
I wasn't clear. My "Steve" comment was about the article as a whole.
The first two sentences were about the quote.
You haven't seen it because you falsely assume that all left-wingers think like you. Not! You're actually out of step with the majority of liberals and progressives in the country. But, hey, as long as you have your principles and don't "sell out" like they did, who cares? Right?
As for Steve being in Obama's pocket, you should ask which pocket you are in? By disengaging and dogging Obama because he's not living up to your unrealistic expectations, you are helping the GOP. But, hey, you're probably still waiting for that mythical revolution to come when people supposedly get fed up with GOP tyranny? Some on the left have been saying this since 1968 and it has yet to happen.
You may have lost respect for Steve, but I've lost respect for left-wingers like you. Even if you weren't alive or just a kid during the last '60s/early '70s, you have adapted the failed leftwing stance that took hold at that time. You complain and complain, but provide no viable alternatives. And you are just as misinformed as any Fox News viewer. I'm fed up with your crowd and its insistence on purity.
Wrong.
Wrong again.
Wrong again.
Wrong again.
Yet another apologist.
Is this the best you've got, favedave?
LMAO! All you can say is "wrong" and provide no support for it?
What a loser!
And where is your support? Non-existent.
You make stupid statements like I assume that all left wingers think like me. That's just plain stupid.
And then you ramble on with nonsense like I'm looking for purity.
Just weird generalizations that don't deserve anymore of a response than - wrong.
"Nabsentia" is a non-sentient Obamabot.
NEWS FLASH: SS, effective Jan 1, 2013 increase is 1.6993464% here in real time.
NO way, this can be good, it is a give away to the people who ran the country into debt, a bail out!
IF anyone is sophomoric enough to think this wouldn't be hung on Obama's neck as soon as he signs it, doesn't remember 2010's summer of rage. Let's just say that was a AAA farm team game compared to what Koch and Rove will do to the Democrats in 2014 with this meme.
Seems the O team is brilliant running for office, and very poor at negotiating real policy.
Just for the sake of repetition...
Q: Why should our country always elect a democrat as president and never a republican?
A: Because when a republican is elected president, everyone knows that working people are going to get screwed and when a democrat is elected president, we can pretend to be surprised that working people are getting screwed over.
It looks like the return of The Capitulator In Chief.
"It looks like the return of The Capitulator In Chief."
And it looks like we have another left-wing whiner. This BS is getting old.
"It looks like the return of The Capitulator In Chief."
It looks like the return of the Leftwinger whiners.
What's getting old, Nonsensia, is your Obamabot b.s.
Elimination or any major adjustment to the Social Security Cost of Living Adjustment is not only bad for seniors, it also poses a risk to the economy. The markets may well see such a change as a first step, and a deliberate attempt, to create of significant inflation.We may no longer be able to borrow from the world, for up to 10 years, at essentially negative interest rates. No wonder Republicans like the idea.
Here's what the President wants to avoid: millions of people losing even more than they have already lost, which is what happens on Jan 1. It's easy for me to advocate no deal, I have a job, but what about the guy whose unemployment is the only thing between him and the streets? What about the disabled vet whose food stamps are the only thing between her and hunger? Republicans don't give a damn about them, in fact for some reason they seem to viscerally despise them, that's where their leverage comes from and nowhere else. Until we can elect enough Liberal Democrats to really change the world, we have to make the best deals we can with malevolent douchebags. I don't like it, but I recognize there are a lot of people through no fault of their own that are completely dependent on a deal being made before Jan 1.
Rusty,
The points you raised here are so important. Everybody here is yelling, "Go off the cliff," but its so easy to say that when you are relatively well off.
But, then again, who cares if unemployment benefits were extended as a result of the first deal? To me, the fact that so many on the left can nonchalantly dismiss having this vital lifeline extended because the dreaded Bush Tax Cuts were also extended, tells me two things: 1) Some on the left are have lost their grip on political reality and 2) None of these people are unemployed.
The GOP are douchbags, but they were elected because there are Americans who disagree with us and they have a constitutional right to do so. End of story. This is democracy, folks and just because GWB didn't know that doesn't mean his predecessor should be just as ignorant (even if it's in the direction you prefer).
As if I'm not already depressed enough with all this child killing and gun talk, now the President is caving to the republican bastards too. I had myself convinced he had finally grown a set. I don't even want to read the news anymore. It all sucks.
The President is president of all the people of America. Even the ones you know have issues. That is called true democracy. Not fun. But Obama believes it is the right way. All most have a voice. And with all that, I also must admit it still does suck a bit. Our pour founding fathers. What were they thinking ?
Lastly to Jane Shaner, do not give up hope. Yes you may give them a super gift for Christmas and they may have given you another darn rolling pin, but they still love you. That is what we must remember. My dad always got the crappiest gifts from me. But he still smiled. I think he loved me anyway. Why ? I do not know.
George Carlin Balances American Budget Deficit by utilizing Death Penalty
http://www.youtube.com/watch?feature=endscreen&NR=1&v=qDO6HV6xTmI
If by inching closer you mean the President caving into the demands the poors hostage keepers then indeed you're correct... President Obama promised Social Security, Medicare and Medicaid were not on the table, yet today throw the poor, elderly and needed under the bus. The rich get richer and the poor keep right on getting poorer .. this country truly sickens me !!!
I am a man. Have you ever seen child birth ? If I were a woman, I would hate all men ! Wait a minute. Was that why she was bitching at me in the delivery room ? Crap, she is my kind of girl. Now I have to love her even more. Not fair !!