Going Big: Obama Reportedly Seeking $4T Deal, Major Entitlement Cuts, Tax Changes - FDL

[WillyT]

Going Big: Obama Reportedly Seeking $4T Deal, Major Entitlement Cuts, Tax Changes
By: David Dayen - FDL
Thursday July 7, 2011 6:10 am

<snip>

The discussions over pairing an increase in the debt limit with austerity budgeting took a turn into the stratosphere this morning, with a series of articles detailing President Obama’s offer, to be presented to Congressional leaders today, of a broader deficit reduction plan than previously discussed, with major cuts to all areas of government and a repeal of the Bush tax cuts for the wealthiest 2%. This is the grand bargain, the “something big” deal that the President has clearly favored since perhaps before he entered office, when he set up a fiscal responsibility summit and invited Pete Peterson to keynote it.

Let’s begin with what we know about this latest proposal. Here’s Lori Montgomery, who headlines her story “In debt talks, Obama offers Social Security cuts”:

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, stabilize borrowing, and defuse the biggest budgetary time bombs that are set to explode as the cost of health care rises and the nation’s population ages.

So, $4 trillion in deficit reduction, Medicare cuts, Social Security changes.

How is this different from what we have known to be in the discussions for the past three weeks? I’m not seeing it. Yes, $2 trillion was the target number for agreements on cuts, but there was also this “trigger” formulation that would have forced automatic reductions if the deficit were above a certain level. In other words, that would have enforced a deficit reduction at a level at or near $4 trillion over 10 years. So the only change there is that the elements of the deal will be labeled immediately.

We already knew that Medicare was in the deal, and the same with Medicaid and Social Security. In fact, the only reason Social Security factors in at all is because the method used to affect the cost of living adjustment – known as “chained CPI” – would also impact other mandatory programs with COLA changes and tax brackets, saving government funding that way. If it was just a Social Security change, it would score as $0.00 toward the deficit. It’s a stealth tax increase more than anything.

What about the New York Times writeup of this development? Anything new there? Well, there is this:

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Much More: http://news.firedoglake.com/2011/07/07/going-big-obama-reportedly-seeking-4t-deal-major-entitlement-cuts-tax-changes/

:kick:

[CleanGreenFuture]

1. Everything on this topic is speculation at this point.

[OHdem10]

2. Speculation based on past history becomes pretty close to

reality.

[rhett o rick]

5. Yeah and I speculate, based on past performance of this president, we are fucked. nm

[Better Believe It]

7. So we can't comment on the proposals until it's a done deal and signed into law by President Obama

That's staying on top of things!

[CleanGreenFuture]

8. That's not what I said. Don't misrepresent me.

Edited to add: David Dayen doesn't know anything more about the situation that anyone else does. And neither does FDL.

The meetings between the President and the thugs have only just begun mere moments ago.

[damntexdem]

10. Push back based on speculation might help oppose the idiocy speculated about.

Just waiting to see might, on the other hand, may lead to lamentations and wishes that we had pushed back -- as well as revenge taken against Dems who helped perpetrate such outrages.

[Renew Deal]

3. There was a hint of something like this in the last couple days.

There was a WH comment about this being a "rare opportunity that comes up once a decade." I thought it was an interesting comment that signaled the WH sees this differently than most people on the street, the press, and even the republicans see it.

[somone]

4. Best reply on that thread:

This is one of the most dangerous aspects of the Obama presidency. He legitimizes right wing ideas and spit-shines them into what constitutes being “practical.”

[WillyT]

9. + 1,000,000,000... What You Said !!!

And the commenter...

:kick:

[divvy]

6. Casey Anthony, Casey Anthony, Casey Anthony. Aren't we supposed to talk about her?