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Thursday, July 07, 2011

Obama Offers to Cut Social Security

This is beyond disappointing:

President Looks for Broader Deal on Deficit Cuts, by Carl Hulse, adn Mark Landler, NYTimes: Heading into a crucial negotiating session on a budget deal on Thursday, President Obama has raised his sights and wants to strike a far-reaching agreement on cutting the federal deficit as Speaker John A. Boehner has signaled new willingness to bargain on revenues. ...
The president’s renewed efforts follow what knowledgeable officials said was an overture from Mr. Boehner, who met secretly with Mr. Obama last weekend, to consider as much as $1 trillion in unspecified new revenues as part of an overhaul of tax laws in exchange for an agreement that made substantial spending cuts, including in such social programs as Medicare and Medicaid.
The intensifying negotiations between the president and the speaker have Congressional Democrats growing anxious, worried they will be asked to accept a deal that is too heavily tilted toward Republican efforts and produces too little new revenue relative to the magnitude of the cuts. Congressional Democrats said they were caught off guard by the weekend White House visit of Mr. Boehner...
Officials said Mr. Boehner suggested that he was open to the possibility of $1 trillion or more in new revenue that would be generated by addressing tax issues already raised in the talks...
One source familiar with the talks said the speaker had put forward options on how to proceed, including making a commitment to a tax code overhaul that would lower rates while closing loopholes, ending deductions and instituting other changes to generate substantial new revenue. ...

I can't imagine why they're worried (and this doesn't even mention the increased risk to the recovery posed by larger budget cuts):

In debt talks, Obama offers Social Security cuts, by Lori Montgomery, Washington Post: President Obama is pressing congressional leaders to consider a far-reaching debt-reduction plan that would force Democrats to accept major changes to Social Security and Medicare in exchange for Republican support for fresh tax revenue.
At a meeting with top House and Senate leaders set for Thursday morning, Obama plans to argue that a rare consensus has emerged about the size and scope of the nation’s budget problems and that policymakers should seize the moment to take dramatic action.
As part of his pitch, Obama is proposing significant reductions in Medicare spending and for the first time is offering to tackle the rising cost of Social Security, according to people in both parties with knowledge of the proposal. The move marks a major shift for the White House and could present a direct challenge to Democratic lawmakers who have vowed to protect health and retirement benefits from the assault on government spending. ...
Rather than roughly $2 trillion in savings, the White House is now seeking a plan that would slash more than $4 trillion from annual budget deficits over the next decade...
That would ... put Obama and GOP leaders at odds with major factions of their own parties. ... It is not clear whether that argument can prevail on Capitol Hill. ...
Asked to comment, Boehner spokesman Michael Steel would say only that “there are no tax increases on the table.”

And:

Meanwhile, another senior Republican on Wednesday signaled a new openness to raising taxes..., so long as the final deal does not raise tax rates or overall federal tax collections.

How absurd is that? What they mean is that they are open to redistributing taxes, but not raising them (and even for those who are willing to give a little on the revenue issue, redistribution still appears to be the larger goal -- and note that there is further redistribution through the reduction of government programs that serve those in need). Close loopholes in return for cutting taxes on the wealthy, that kind of thing. I wonder who the winners would be when all is said and done?

“If the president wants to talk loopholes, we’ll be glad to talk loopholes,” Cantor said... Even as Cantor cracked the door open, however, Senate Minority Leader Mitch McConnell (Ky.) slammed it shut, reiterating the long-standing Republican position that policymakers should consider eliminating tax breaks only as part of a comprehensive effort to rewrite the code and lower income tax rates. ...

Revenue enhancements are supposed to support key social programs. Instead, they are put on the chopping block in trade for more revenue (which means no new revenue according to many Republicans). Yes, we have issues to address with the growth of health care costs, but I hope people realize that the hole in the budget caused by the Bush tax cuts alone is larger than the projected Social Security shortfall.

Defense cuts are not mentioned in either story.

    Posted by on Thursday, July 7, 2011 at 12:24 AM in Budget Deficit, Economics, Health Care, Politics, Social Insurance, Social Security | Permalink  Comments (153)

          


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