Medicare: Raising the eligibility age, imposing higher premiums for upper income beneficiaries, changing the cost-sharing structure, and shifting Medigap insurance in ways that would likely reduce first-dollar coverage. This was to generate about $250 billion in ten-year savings. This was virtually identical to what Boehner offered.
Medicaid: Significant reductions in the federal contribution along with changes in taxes on providers, resulting in lower spending that would likely curb eligibility or benefits. This was to yield about $110 billion in savings. Boehner had sought more: About $140 billion. But that’s the kind of gap ongoing negotiation could close.
Social Security: Changing the formula for calculating cost-of-living increases in order to reduce future payouts. The idea was to close the long-term solvency gap by one-third, although it likely would have taken more than just this one reform to produce enough savings for that.
Discretionary spending: A cut in discretionary spending equal to $1.2 trillion over ten years, some of them coming in fiscal year 2012. The remaining differences here, over the timing of such cuts, were tiny.
If someone puts cuts like that on the table, and then confirms them after negotiations have broken down, to me at least that hardly seems to be someone who was simply playing rope-a-dope, Michael Cohen’s straw man attacks (“hates liberals”; “got elected President so he could fulfill his dream of shredding the welfare state and the social net”) notwithstanding. If you play rope-a-dope, you don’t put concrete things like that on the table, and then loudly announce to the world that that’s what you did.
It’s not “acting like a petulant child” to say publicly, “the Republicans want to cut the deficit, and so do I; but I will not cut Social Security, Medicare and Medicaid benefits to do it”. It’s restating something that the public has repeated over and over again.
These observations hardly suggest, pace Cohen, that Obama is a bad politician; instead, they suggest that this year at least, he is an Eisenhower Republican, something that I predicted a few months ago (although I actually put the President a few steps to the left). His trouble is that today’s GOP is the heir of the John Birch Society, which accused Ike of being a KGB agent.
The question is whether these concessions will muddle Obama’s and the Democrats’ message in next year’s elections, which will be difficult in any event. The Ryan budget was an enormous gift to the Democrats, which Obama seems to have sent back unopened. Obama’s refusal to talk about jobs, or even use anything in the executive arsenal to alleviate economic distress (HAMP, anyone? Regulatory threats unless banks write down mortgages? Nah….), confirms his at-least-temporary conversion to Eisenhower Republicanism. Ike was re-elected, of course. But the economy was better in that year. And Ike won the war.
[Cross-posted at The Reality-Based Community]