27 October 2013

A "grand bargain"? NO!

While teabaggerdom still dreams of killing the ACA, establishment Republicans have retreated from that lost battle back to one of their longer-standing goals: gutting Social Security and Medicare.  Speculation is rife that they might get their way as part of a "grand bargain" with Democrats, if they are willing to concede tax increases in return -- all in the name of deficit reduction.  Harry Reid says it's not happening, and he's probably right, not only because the Republicans are too frightened of Grover Norquist, but also because, as they repeatedly showed during the debt-limit hostage crisis, they can never agree among themselves about what their demands should be.

This is a good thing, not a bad thing.  While getting the Republicans to defy Norquist would be satisfying on some level, any cuts to Social Security or Medicare would be too high a price to pay.  Social Security keeps tens of millions out of poverty.  It's an "entitlement" to which recipients are truly entitled -- they paid into it throughout their working lives.  And it's one of the more effective economic stimulus programs we have.  As for Medicare, it's the nearest thing we have to (shudder) socialized medicine, keeping at least the elderly out of the tar pits from which the ACA is just beginning to extricate the rest of us.  If Democrats in office start going soft on defending these programs, we need to be ready to remind them to do the right thing (Bernie Sanders already has a petition going).

There are some bad signs.  A top Obama adviser has strongly hinted that the administration is ready to cave on entitlement cuts.  And a top House Republican has put revenues on the table, though the specifics aren't very impressive.  He may not be alone.  Republicans have much to gain from such a "grand bargain".

They've long dreamed of cutting Social Security and Medicare, but all of them except the dimmest teabaggers know that such a move would be grossly unpopular.  The only way they could get away with it is by maneuvering us into sharing the responsibility.  When America's elderly discover the knife in their collective back, Republicans want our fingerprints, not just theirs, to be on the handle.  Beyond that, such a gross betrayal by our party leadership would leave our base demoralized and infuriated going into the 2014 elections.  The enthusiasm generated by Obama's recent firmness would degenerate back into the old talk of "Democrats always cave" and "both parties are alike".  Only Republicans would benefit from this.

So what should we do about the deficit?  Well, most of the deficit was caused by decades of cutting taxes on upper income brackets (and by the huge cost of Bush's Middle Eastern military blundering, but there's nothing we can do about that now), so much so that today Warren Buffett, one of the richest people on Earth, says he pays a lower tax rate than his secretary does, and a tiny oligarchy has amassed obscene levels of wealth while incomes have stagnated for the bottom 90%.  The appropriate solution is to get those upper-income tax rates back to normal levels.  If we could get them back up as high as they were under Reagan, we'd be well on the way to solving the problem: If we could get them back where they were under Eisenhower, we'd probably be running a surplus in no time.

This, of course, would require Democrats to simultaneously hold the Presidency, the House, and a 60+ Senate majority.  We'll get there someday.  Until we do, the current deficit is tolerable -- and far better than cutting Social Security or Medicare.

4 Comments:

Blogger Grung_e_Gene said...

Any exchange of cuts to Social Security, Medicare, for tax raises will fail utterly. First, the tax increases will never materialize because of republican obstructionism while the cuts will benefit the Right immensely,

First cuts will be just the first of many the Republicans plan on imposing, Second, the Republicans will immediately tell their duped baggers and Wall Street financiers that they got the cuts they always wanted while telling Sunday talk shows they never, ever wanted to cut those benefits it was Obama who did it!

Next, they run for 25 years on the Obama and the Democrat* Party cut your benefits vote for us!

27 October, 2013 17:56  
Blogger Jerry Critter said...

Cuts to SS benefits will not reduce the debt.

27 October, 2013 20:22  
Blogger Infidel753 said...

Grung: They certainly have the chutzpah for it. Most of them even blame the Democrats for the government shutdown, and a lot of people in their base believe it.

Jerry: The idea is that it would reduce the deficit, which would reduce the rate of growth of the debt. We can't start reducing the debt until the budget is in surplus, and that's going to take tax increases.

Of course in reality it probably wouldn't even reduce the deficit, for the same reasons that austerity policies have driven deficits up in Europe.

28 October, 2013 09:06  
Blogger Jerry Critter said...

That is a common misconception. SS is not really even part of the budget. SS has its own unique income and expenditure streams and as such has no impact on the budget or the debt. It is just included in a unified budget to make the deficit look smaller. It important part of the deficit is the part that affect the debt. Changing SS taxes or benefits has no impact on the debt whatsoever.

28 October, 2013 13:15  

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