Thursday, November 29, 2012

The Grand Bargain to cut benefits on Social Security, Medicare and Medicaid is alive and prospering, according to Politico

Medicare opponent and Senate Democratic Chair of the Budget Committee Kent Conrad, who is not standing for re-election and therefore has substantial financial incentive to make himself attractive to One Percenter lobbies, appeared today on MSNBC talking up the "fiscal cliff" deal. Chairman Conrad Appearance on MSNBC Live 11/29/2012:

Digby notes on Twitter today, "I hate to say it but MSNBC is almost as bad as Fox and CNBC on 'fiscal cliff' stuff. CW [conventional wisdom] crapola all the way."

There's certainly no hint in the Conrad interview that the "fiscal cliff" drama is a staged drama.

Medicaid opponent Conrad griped about "some on our left" who "have their shoes in concrete" because "they don't want to touch any spending." No doubt warming David Brookes' heart, he appealed to "people in the sensible center," by which he means people who take the very unpopular, minority position among the American public that it's good policy to cut benefits on Social Security, Medicare and Medicaid as Social Security opponent Kent Conrad does.

Politico über-hacks Jim VandeHei and Mike Allen give their description of the current state of the negotiations, either leaked from who-knows-who or concocted from Beltway gossip of the day, Inside the talks: Fiscal framework emerges 11/29/12

Cut through the fog, and here’s what to expect: Taxes will go up just shy of $1.2 trillion — the middle ground of what President Barack Obama wants and what Republicans say they could stomach. Entitlement programs, mainly Medicare, will be cut by no less than $400 billion — and perhaps a lot more, to get Republicans to swallow those tax hikes. There will be at least $1.2 trillion in spending cuts and “war savings.” And any final deal will come not by a group effort but in a private deal between two men: Obama and House Speaker John Boehner (R-Ohio). The two men had a 30-minute phone conversation Wednesday night — but the private lines of communications remain very much open.
The core of this fiscal cliff farce is beginning the process of cutting benefits on Social Security, Medicare and Medicaid. Any Democrat who votes for the following should face a major primary challenge in their next election:

There is only one way to make the medicine of tax hikes go down easier for Republicans: specific cuts to entitlement spending. Democrats involved in the process said the chest-pounding by liberals is just that — they know they will ultimately cave and trim entitlements to get a deal done.

A top Democratic official said talks have stalled on this question since Obama and congressional leaders had their friendly-looking post-election session at the White House. "Republicans want the president to own the whole offer upfront, on both the entitlement and the revenue side, and that's not going to happen because the president is not going to negotiate with himself," the official said. "There’s a standoff, and the staff hasn't gotten anywhere. Rob Nabors [the White House negotiator], has been saying: 'This is what we want on revenues on the down payment. What's you guys' ask on the entitlement side?’ And they keep looking back at us and saying: 'We want you to come up with that and pitch us.' That’s not going to happen."

Sen. Dick Durbin (D-Ill.) told "Morning Joe" on Tuesday that he could see $400 billion in entitlement cuts. That's the floor, according to Democratic aides, and it could go higher in the final give and take. The vast majority of the savings, and perhaps all of it, will come from Medicare, through a combination of means-testing, raising the retirement age and other "efficiencies" to be named later. It is possible Social Security gets tossed into the mix, but Senate Majority Leader Harry Reid (D-Nev.) plans to fight that, if he has to yield on other spending fronts.

Democrats want most Medicare and other entitlement savings to kick in between 10 and 20 years from now, which will make some Republicans choke. Democrats will point to the precedent set by House Budget Chairman Paul Ryan (R-Wis.) of pushing most mandatory savings off until a decade from now. [my emphasis]
Several thoughts: "The President is not going to negotiate with himself"?!? Good grief, the man pre-negotiates with himself and starts conceding from there - when it's Republicans on the other side of the negotiation.

Is a Democratic Administration really negotiating with the loser Republicans by asking, "What's you guys' ask on the entitlement side?" That is truly pitiful. The only thing the Dems should be saying on that is, "Don't even think about proposing cuts in benefits on Social Security, Medicare and Medicaid."

"Democrats involved in the process said the chest-pounding by liberals is just that — they know they will ultimately cave and trim entitlements to get a deal done." This is a real challenge for Democrats in Congress. The fight over the public option in the health-care reform package was a key moment for Obama's opinion of "the left", in this case the Progressive Caucus. After establishing the public option as a "red line" item they had to have, the Dems mostly caved and voted for the plan without that in it. If they had been as willing as the less numerous Blue Dogs to kill the law without the public option, things could well have worked out much better. But once the White House punked them on that, Obama knew he didn't have to take them seriously and could use the Blue Dog Dems as a cover and excuse for conservative positions he preferred to take.

"It is possible Social Security gets tossed into the mix, but Senate Majority Leader Harry Reid (D-Nev.) plans to fight that, if he has to yield on other spending fronts." If that's true, it means: (1) Obama still wants a cut to Social Security benefits as part of the Fiscal Cliff deal; and, (2) Harry Reid has agreed to benefit cuts in Medicare and probably Medicaid.

And, once again, Dick Durbin proves that the Democratic base can't expect anything good from him.

Where are Reid and Pelosi on this? According to Politico:

Everyone has an opinion on the grand bargain. But only two matter: Obama’s and Boehner’s. Any deal will ultimately be hammered out between the two men, whose on-again, off-again relationship is stronger than most people realize.
Maybe some Beltway hackery completely took over on that paragraph. Or maybe not. After a strong win by the Democrats in the election three weeks ago, the only person in Congress who matters in a deal to cut benefits on Social Security, Medicare and Medicaid is ... the House leader of the loser party?

Bluster aside, both know they have a heavy incentive to cut a deal, and quick. Boehner knows the president isn't bluffing on letting the Bush tax cuts lapse to get his way on raising rates on the rich. Obama knows the last thing he wants at the start of a second term is an economic funk caused by Washington dysfunction, even if Republicans get more of the blame.

People involved in the talks over the past six months say House Minority Leader Nancy Pelosi is at best a bit player in the unfolding drama, and virtually certain to back any deal Obama blesses. Reid runs the Senate and has more juice than Pelosi, but he knows his role is to play bad cop until it's time to play loyal soldier to pass the final package. Senate Minority Leader Mitch McConnell, facing a reelection two years from now in conservative Kentucky, will defer to Boehner in brokering any compromise and might even break with his fellow GOP leader on a final vote. [my emphasis]
In Politico's scheme, the voters don't even exist. Reid and Pelosi are far more aware of our existence.

This sounds like Obama-like postpartisanship:

To those involved in the talks, it/s not really a mystery how big the overall hike will be. Boehner was for $800 billion before the election, and Obama slapped down an opening bid of $1.6 trillion after. So it doesn't take Ernst and Young to add those numbers, divide by two and know the president wants to end up close to $1.2 trillion.
Except that, you know, we just had a big Presidential and Congressional election. One side won big-time, the other lost.

And since Obama has repeatedly said he is only "asking the wealthiest Americans to pay a little more" in the tax part of the deal, everyone has reason to wonder about the following:

Officials familiar with the White House position say Obama plans zero flexibility on his insistence on a higher tax rate for top earners. He plans to take what one aide called a "trust but verify" position: He will insist on a higher rate in the year-end deal. Then next year, during tax-reform negotiations, "the onus will be on Republicans to propose something that raises the same amount of revenue,” the aide said. "He's going to pocket their rate hike on the top two brackets at first, and then he’s going to say to them in the 2013 process that we set up: If you think you can realize these same revenues in a different way, prove it to me."
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