“Hostage Takers, Act II”: GOP To Hold Debt Ceiling Hostage Again As Leverage For Medicare Cuts
On Sunday, Sen. Bob Corker (R-TN) conceded that Democrats have won the debate on raising taxes on the richest Americans and said that he would likely vote to increase rates on the top 2 percent of Americans in order to shift the debate to cutting entitlement programs and improve the GOP’s leverage in the debate over how to avert the so-called fiscal cliff.
During an appearance on Fox News Sunday, Corker explained that if Republicans “give Obama a 2 percent increase,” the party can then hold the debt ceiling hostage in order to secure real cuts in spending:
CORKER: The Republicans know they have the debt ceiling, that is coming up around the corner, and, the leverage is going to shift, as soon as we get beyond this issue. The leverage is going to shift, to our side where hopefully we’ll do the same thing we did last time and that is if the president wants to raise the debt limit by $2 trillion we get $2 trillion in spending reduction and, hopefully, this time, it is mostly oriented towards entitlement and with no process. […]
[Obama] has the upper hand on taxes and you have to pass something to keep it from happening. We only have one body. If we were to pass, for instance, raising the top 2 rates, and that’s it, all of a sudden we do have the leverage of the debt ceiling and we haven’t given that up so the only way the debt ceiling.
House Speaker John Boehner (R-OH) has indicated that the GOP plans to use that leverage by demanding more spending cuts, but the move will result in great economic costs. In 2011, Republican demands nearly led to a credit default and ultimately cost taxpayers “$18.9 billion over 10 years, due to elevated interest rates between January and August 2011.”
Obama slammed the GOP’s strategy during a meeting with business leaders last week. “The thinking is the Republicans will have more leverage because there will be another vote on the debt ceiling, and we will try to extract more concessions with a stronger hand on the debt ceiling,” Obama told members of the Business Roundtable. “That is a bad strategy for America, it’s a bad strategy for your businesses, and it is not a game that I will play.”
By: Igor Volsky, Think Progress, December 9, 2012
“The Big Budget Mumble”: Republicans Can’t Play Their Usual Con Game Of Just Saying No
In the ongoing battle of the budget, President Obama has done something very cruel. Declaring that this time he won’t negotiate with himself, he has refused to lay out a proposal reflecting what he thinks Republicans want. Instead, he has demanded that Republicans themselves say, explicitly, what they want. And guess what: They can’t or won’t do it.
No, really. While there has been a lot of bluster from the G.O.P. about how we should reduce the deficit with spending cuts, not tax increases, no leading figures on the Republican side have been able or willing to specify what, exactly, they want to cut.
And there’s a reason for this reticence. The fact is that Republican posturing on the deficit has always been a con game, a play on the innumeracy of voters and reporters. Now Mr. Obama has demanded that the G.O.P. put up or shut up — and the response is an aggrieved mumble.
Here’s where we are right now: As his opening bid in negotiations, Mr. Obama has proposed raising about $1.6 trillion in additional revenue over the next decade, with the majority coming from letting the high-end Bush tax cuts expire and the rest from measures to limit tax deductions. He would also cut spending by about $400 billion, through such measures as giving Medicare the ability to bargain for lower drug prices.
Republicans have howled in outrage. Senator Orrin Hatch, delivering the G.O.P. reply to the president’s weekly address, denounced the offer as a case of “bait and switch,” bearing no relationship to what Mr. Obama ran on in the election. In fact, however, the offer is more or less the same as Mr. Obama’s original 2013 budget proposal and also closely tracks his campaign literature.
So what are Republicans offering as an alternative? They say they want to rely mainly on spending cuts instead. Which spending cuts? Ah, that’s a mystery. In fact, until late last week, as far as I can tell, no leading Republican had been willing to say anything specific at all about how spending should be cut.
The veil lifted a bit when Senator Mitch McConnell, in an interview with The Wall Street Journal, finally mentioned a few things — raising the Medicare eligibility age, increasing Medicare premiums for high-income beneficiaries and changing the inflation adjustment for Social Security. But it’s not clear whether these represent an official negotiating position — and in any case, the arithmetic just doesn’t work.
Start with raising the Medicare age. This is, as I’ve argued in the past, a terrible policy idea. But even aside from that, it’s just not a big money saver, largely because 65- and 66-year-olds have much lower health costs than the average Medicare recipient. When the Congressional Budget Office analyzed the likely fiscal effects of a rise in the eligibility age, it found that it would save only $113 billion over the next decade and have little effect on the longer-run trajectory of Medicare costs.
Increasing premiums for the affluent would yield even less; a 2010 study by the budget office put the 10-year savings at only about $20 billion.
Changing the inflation adjustment for Social Security would save a bit more — by my estimate, about $185 billion over the next decade. But put it all together, and the things Mr. McConnell was talking about would amount to only a bit over $300 billion in budget savings — a fifth of what Mr. Obama proposes in revenue gains.
The point is that when you put Republicans on the spot and demand specifics about how they’re going to make good on their posturing about spending and deficits, they come up empty. There’s no there there.
And there never was. Republicans claim to be for much smaller government, but as a political matter they have always attacked government spending in the abstract, never coming clean with voters about the reality that big cuts in government spending can happen only if we sharply curtail very popular programs. In fact, less than a month ago the Romney/Ryan campaign was attacking Mr. Obama for, yes, cutting Medicare.
Now Republicans find themselves boxed in. With taxes scheduled to rise on Jan. 1 in the absence of an agreement, they can’t play their usual game of just saying no to tax increases and pretending that they have a deficit reduction plan. And the president, by refusing to help them out by proposing G.O.P.-friendly spending cuts, has deprived them of political cover. If Republicans really want to slash popular programs, they will have to propose those cuts themselves.
So while the fiscal cliff — still a bad name for the looming austerity bomb, but I guess we’re stuck with it — is a bad thing from an economic point of view, it has had at least one salutary political effect. For it has finally laid bare the con that has always been at the core of the G.O.P.’s political strategy.
By: Paul Krugman, Op-Ed Columnist, The New York Times, December 2, 2012
“Just Another Shell Game”: John Boehner’s Medicare Proposal Is Sleight Of Hand, Not Cost Control
Denying Medicare to seniors until they reach age 67 will shift costs to seniors, states, and employers without reducing the actual cost of healthcare by one penny. It’s a shell game, and it should not be an option in the fiscal showdown talks.
While it would reduce Medicare expenditures, those costs won’t vanish. Yes, the federal government would save $5.7 billion in 2014, but that would be offset by an additional $11.4 billion spent by states, employers, and seniors, according to the Kaiser Family Foundation. That’s a cost shift and a cost increase.
The Congressional Budget Office assumes that half of 65- and 66-year-old seniors would continue employer-sponsored coverage at a cost of about $4.5 billion in 2014. That would likely accelerate the long-term decline in corporate benefits for retirees.
States would also pay because low-income uninsured seniors would be eligible for Medicaid. Even if the federal government would pay 100 percent of the cost of the new beneficiaries, states would still be on the hook for an additional $700 million in 2014 alone.
And, of course, seniors lose in the deal. Two thirds of those ages 65 and 66 would each average $2,200 more in out-of-pocket costs ($3.7 billion total) in 2014, even when accounting for subsidies to buy a plan on a health insurance exchange.
There’s another significant but less obvious cost shift through increased premiums in Medicare and in the exchange. Seniors ages 65 and 66 are the healthiest and least expensive Medicare beneficiaries, and they help lower premiums for all enrollees. Moving them to private coverage, where they would be the least healthy and most expensive health plan members, would drive up premiums for everyone else in the exchanges.
Boehner’s proposal seems more sleight of hand than legitimate cost control. It’s about weakening Medicare, not strengthening the program for future generations.
If we really want to think big about Medicare reform, let’s consider lowering the age of eligibility. Letting people as young as 55 buy into Medicare would improve the risk pool for seniors and strengthen Medicare’s bargaining power without raising program costs.
By: Ethan Rome, Executive Director of Health Care for America Now, U. S. News and World Report, December 6, 2012
“Pretending To Negotiate”: Basic Arithmetic For Republicans Just Doesn’t Add Up
If President Obama honestly wants to negotiate an agreement with Republicans before the year-end fiscal deadline, he must be deeply frustrated. And if he doesn’t really want to negotiate with them, then he should be delighted, for the same reason: Their latest “offer” laid before him by House Speaker John Boehner demonstrates again their refusal to reveal their true intentions — and their inability to do simple arithmetic.
Consider their treatment of Medicare, the popular social insurance program for seniors that Republicans have always despised. They have just emerged from a long national campaign in which they repeatedly and falsely claimed to “protect” Medicare from the president — whom they accused of wanting to slash $716 billion from the program — but now they complain that he won’t cut it enough. The Obama cuts were mythical, but the Boehner budget proposal includes at least $600 billion in Medicare and Medicaid reductions.
Worse still, the Republicans propose to perform this crude surgery on Medicare without the slightest explanation of where they would cut. Washington rumors suggest that they would achieve some of those cuts over the next 10 years by raising the eligibility age by two years to 67 and by increasing premiums for more affluent beneficiaries.
As Robert Greenstein of the Center on Budget and Policy Priorities pointed out on Tuesday, however, those changes would not begin to achieve the savings required by the Boehner proposal.
The same problem undermines the other aspects of Boehner’s proposal, which includes $600 billion in additional unspecified cuts. Either their arithmetic doesn’t work — or, as Greenstein worries, they mean to inflict severe cuts in health and other services that would harm elderly and poor Americans, but want to conceal those consequences from the public.
Yet there is an even deeper problem with Boehner’s arithmetic. The Republicans are fighting to extend all the Bush tax cuts to the wealthiest two percent along with everyone else — but their alternative proposals are utterly inadequate to compensate for the $1.3 trillion in revenues lost by continuing those cuts for the rich. To “offer” $800 billion in new “revenues” obtained by eliminating deductions rather than raising rates simply doesn’t work, as a matter of basic math. It isn’t nearly enough money.
If Republican leaders cannot do the arithmetic, then it is impossible to negotiate with them. If they can do the arithmetic but insist on falsifying the answers, then it is both unwise and impossible to negotiate with them.
Unless and until the Republicans start talking about real numbers that can actually add up, there is nothing to be gained from pretending to negotiate. Nor should the president start negotiating with himself, as he has sometimes done in the past. Instead, he ought to make sure that the opposition understands what will happen when they fail to act responsibly. After January 1, he will bring them an offer they cannot refuse, to restore cuts for the 98 percent — and they will be held accountable for any consequences caused in the meantime by their stalling.
By: Joe Conason, The National Memo, December 5, 2012
“A Slow Death March”: The NFL And The Republican Party Are Sinking
Did you know in medical circles there’s talk the NFL will only last another 15 years or so?
The medical evidence linking professional football’s furious, jarring hits to the head and brain injury is that strong and overwhelming. Later in life, it all catches up to a guy, who succumbs to being a shell of himself. For wives, it’s incredibly painful to witness their strong and mighty men become lost and weak, day by day, weeks giving way to months and years, relentlessly. Like a slow death march.
The NFL is so rich and powerful it’s hard to imagine that happening, isn’t it? With all the stadiums they made cities build for them, their dominance over network television schedules, their carefully cultivated rivalries, their gleaming Super Bowl half-time shows, their spiffy uniforms and grumpy coaches—how do we go on without all that? The NFL has so much control over American lives, aspirations, and social mixing that it is practically a shadow government.
The NFL has faced litigation over brain injuries and is bracing for many more lawsuits as its first generation of former players reach old age.
But some say a tipping point will emerge, a consensus that an entire swath of football players—past and present—will almost certainly deal with brain damage. And all the NFL’s lavish compensations will not be enough lucre to prod players to keep playing the game as it is now played: brutally. The whole sport is a gaming of war, after all. Organized violence is what we collectively come to see.
These experts think the NFL will be suddenly forced to switch to a game like soccer. I’d love to see that, but I can’t fathom the NFL buckling to sweet reason so soon. Football is so much part of the Americana male archetype. Soccer is so lightweight, literally.
Well, guess what. Political observers are saying the same thing about the walking-wounded Republican Party. They say the game it’s playing is moribund. The party Lincoln joined when it was young is foundering, according to the Washington pundits, not all of them Democratic observers. The 2012 election showed that the party has white men squarely on its side, but the electorate is not all white men anymore.
Meanwhile, the party lost the Latino vote, the black vote, and of course, the women’s vote after its visceral attack on reproductive rights. Who did they think would vote for their ticket other than well-off white men? The quintessentially privileged candidate, Mitt Romney, could not connect across class and lines of life experience. And he really was the best the party had. Think of how Rick Perry, Michelle Bachmann, Rick Santorum—anyone else in the primary—would have been an international disgrace. They need new fresh faces.
The Republicans seem to be at a loss for new ideas as well. Cutting Medicare is as popular as a skunk about a garden party. They should have more garden parties and fewer skunks—do I need to name them? They are all there on camera every day, looking dour and angry that the wealthiest 2 percent of Americans are going to see their Bush-era tax cuts expire. Too bad!
The NFL and the GOP: what a plight. I feel so sorry for them. But let’s say it clear here. They deserve to have their game and party sink into the mud if they can’t freshen up.
By: Jamie Stiehm, U. S. News and World Report, December 4, 2012
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