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Saturday, December 08, 2012

I Also Hope This Isn't True (Though I Fear It Is)

This was in links, but I want to emphasize what a bad deal this would be:

I Hope This Isn’t True, by Paul Krugman: Ezra Klein says that the shape of a fiscal cliff deal is clear: only a 37 percent rate on top incomes, and a rise in the Medicare eligibility age.
I’m going to cross my fingers and hope that this is just a case of creeping Broderism, that it’s a VSP fantasy about how we’re going to resolve this in a bipartisan way. Because if Obama really does make this deal, there will be hell to pay.
First, raising the Medicare age is terrible policy. It would be terrible policy even if the Affordable Care Act were going to be there in full force for 65 and 66 year olds, because it would cost the public $2 for every dollar in federal funds saved. And in case you haven’t noticed, Republican governors are still fighting the ACA tooth and nail; if they block the Medicaid expansion, as some will, lower-income seniors will just be pitched into the abyss.
Second, why on earth would Obama be selling Medicare away to raise top tax rates when he gets a big rate rise on January 1 just by doing nothing? ...
So this looks crazy to me; it looks like a deal that makes no sense either substantively or in terms of the actual bargaining strength of the parties. And if it does happen, the disillusionment on the Democratic side would be huge. All that effort to reelect Obama, and the first thing he does is give away two years of Medicare? How’s that going to play in future attempts to get out the vote?
If anyone in the White House is seriously thinking along these lines, please stop it right now.

Beyond being stupid policy -- for example it imposes more than a dollar of costs on the private sector for every dollar it saves in federal spending -- this would be a huge betrayal of the supporters that put Obama in office. Republicans campaign on protecting Medicare, then demand Obama cut Medicare as the price of tax increases (which will happen in any case) and he is inclined to go along? "Hell to pay" indeed.

    Posted by on Saturday, December 8, 2012 at 09:34 AM Permalink  Comments (118)


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