McConnell laughs at Obama's fiscal cliff plan

[Sbane]

My views on this are unpopular with Democrats on the forum, so I'll just put this out there and let it be.  I'm somewhat sympathetic to David Brooks' take on this so far.  I still think it would have been better for the White House to at least come out sort of half-sies on the revenue side and get part of their revenue targets from modest rate hikes on the very top tier (not the whole 2.5%) and then get the rest from capping deductions for the predominantly wealthy.  I don't know what gives with this fundamentalism about rate hikes when more revenue can be raised in other ways that might make more economic sense.  It would not be a disaster to couple this kind of offer with phased-in spending reductions in the style of Simpson-Bowles, since the latter recommendations were commissioned by the White House anyway.  The election itself moved the goal-posts for the GOP, and a number of them in the House were signaling a willingness to throw Grover overboard.  The my-way-or-the-highway "proposal" the White House released the other day makes it harder for the GOP to say "yes."  Dems are now expecting the Pubs to basically screw their constituencies, so you have to craft a deal that's both good for the country and helps the medicine go down easier.  The White House made this mistake a couple times in 2011, by first having Obama spit in Ryan's face in a speech right after Ryan released his "budget," and then having Obama jump at the Gang of Six outline without any consultation after weeks and weeks of negotiating a different deal with Boehner.  I don't understand why the White House is so apparently bad at the art of the deal.  But, like I said, I know few agree with any of the above, so I'll just leave it at that. 

Do you have the breakdown of the proposal?

Hopefully you don't think Obama and the Democrats should be responsible for outlining the spending cuts as well, especially entitlement cuts. Democrats stick their necks out by proposing tax hikes, and Republicans stick their necks out by proposing entitlement cuts. That's how it should work. I live in Tennessee, so I understand what the Republican plan is. They want to blame the Democrats for cutting Medicare, so they want the Democrats to propose those cuts as well. There are people out there who think Obama wants to cut Medicare because he is a muslim and he wants to give away money to n******. No way should Democrats be the ones proposing cuts to Medicare. Better to go over the cliff. I am a moderate, and I hope a deal gets cut, but I've had it with the childish Republican party that wants to appeal to the rubes.

Childish? Obama goes out and campaigns even after he won the election. Does that make any sense?

Anyways when the Dems say the word "Stimulus" the GOP just runs for the hills. Thats a non-starter and the Dems know it. Why is Geithner even the deal-maker anyway? Where is President Obama at? Isn't the President supposed to be at the table but he is out campaigning for some odd reason.

Who cares who proposes the cuts or the tax increases? Its up to Obama and Boehner to make a deal and work the numbers out on the tax increases and spending cuts. Instead Obama is running out the clock so the deal goes to the last minute so he can get the best deal he can. I know it makes good politics but its not good leadership in my opinion.

Obama wants to make sure all the people who voted for him stay engaged and keep pressuring their congressmen and Senators. The Republicans did this during Obamacare. Instead of working with Obama, they went out on the road and fired up the masses into a frenzy. I'm not saying he shouldn't work with the Republicans, but he realizes getting a better deal requires keeping his base engaged.

The Republicans never say they want to cut Medicare or social security. They only say they want to cut "entitlements". Hmm...let them spell out what they want. Some Republicans have of course, but the Republicans should not be able to pin cutting Medicare on Obama (and yes the inverse is true too).

The Healthcare Legislation only the Dem Base likes it. The Dems wanted to work with the Republicans on "Obamacare"? No they didn't. The Dems just ram rodded it through with 51 votes in the US Senate and special deals for states.

Just have a speech on late night TV if you want people to get behind you instead of campaiging.

Cutting Medicare? Who cares its always a game of "gotcha" of who cut Medicare or who is gonna cut Medicare. Its all a big game. Everybody knows the program has to be reformed one way or another. I agree though one party shouldn't pin cutting medicare on one party or the other though. Thats why I say its just a big game.

My point was that Republicans gained leverage on Obamacare by going out there and campaigning so as to pressure moderate Democrats in Republican leaning districts. Obama is now doing the same with the fiscal cliff. He has a more popular position and he is using it to get the maximum on taxes. At least he has also signaled he is willing to go along with entitlement cuts, whereas the Republicans were willing to go along with basically nothing with regard to healthcare. And something needed to be done, as the status quo was not working.

I think with Medicare perhaps both parties need to come out at once and propose cuts, if the Republicans are too scared to go out on their own and do it. In which case the Republicans won't get much cuts at all. Tax hikes aren't popular either, but the Democrats have proposed something.

There are two problems here, one is that a lot of the Republican base is convinced that the deficit is the result of Obama increasing spending on black people, and the other is that a lot of people think Medicare will somehow survive without middle class tax hikes. It's a goddamn mess.

If I was dictator, I would institute means testing for those making more than 30k a year in retirement. Make them pay higher premiums and copays. And I would also cut back on the COLA in Social security. I am not a fan of raising the eligibility age, beyond what it is already scheduled. To get to $4 Trillion, get rid of the Bush tax cuts down to whatever income level is necessary to get to $4 Trillion in savings. Perhaps institute a Milionaire's tax and a minimum tax on all income above a Million dollars to get the wealthy investors like Warren Buffet to pay more.  And reduce military spending by at least 10-20%.

[memphis]

House Republicans have rebutted with a plan that cuts tax rates for richers even further that W did. Lolwut?

[Torie]

Obama offered 1.6 trillion in new taxes, 400 billion in cuts (none involving entitlements), and a permanent automatic  increase mechanism in the debt ceiling, castrating the Pubs bargaining power forevermore. That's ludicrous.

My patience is exhausted. Unless Obama makes an offer that is serious (the Pubs at least made a serious offer - 800 billion in more revenue in exchange for cuts in entitlements in some unspecified amount), the Pubs should just pass the middle class tax cut, and let the taxes rise for "the rich," and let sequestration kick in as well, and announce that they won't be raising the debt ceiling until there is a master deal, or substantial progress towards one, and the government should start planning now on slashing spending by 30% or whatever is required to cap the amount of the debt given the debt ceiling limit if Obama does not plan on getting serious.

It is really, really simple. Other than the baked in the cake rise in taxes on the rich, the government does not get a dime more revenue expect in exchange for entitlement cuts. Budgets can be repealed by the next Congress and are not worth the paper they are printed on. Taxes are statutory, just like entitlements, and need to be tied to the hip. The Pubs need to really, really clear about this. Let the media howl, let the Dems howl - too bad. It's time to come to Jesus. It's time to concoct a real fiscal cliff, rather than the phoney one we have now. Do the Pubs have the guts to stare Obama down, that is the question.

[Sbane]

Obama won't get everything he wants! Come on now, don't be silly. He just proposed that as a starting point. Why don't the Republicans come out with their maximalist position on entitlement cuts? Oh, that's right, because their own base doesn't understand what entitlement cuts mean.

In any case, the stunt you proposed won't work. Republicans should try it though. It will turn even the business community against them.

Also even from your post the numbers are becoming clear, aren't they? $1.2 Trillion in tax hikes and some unknown amount in entitlement cuts (probably using the framework Bob Corker outlined which I used above as well). I think something like this framework will occur. The powers that be want it to happen so it will.

[Torie]

Obama won't get everything he wants! Come on now, don't be silly. He just proposed that as a starting point. Why don't the Republicans come out with their maximalist position on entitlement cuts? Oh, that's right. Because their own base doesn't understand what entitlement cuts mean.

I told you both parties need to come up with them behind closed doors. But yes, if there is to be no deal, and it's fiscal cliff meltdown time, to bring the whole stinking mes to a roiling boil, then yes, the Pubs will need to come out of the closet, and explain where the entitlement cuts should be, or what the options are at least from which to pick, and why the painful entitlement cuts are necessary, because otherwise, we are headed the way of Greece absent raising taxes on the middle class, and by more than just reverting them to the Clinton era rates - much more.

And I wish they would push converting Medicare into an HMO based system, where everyone gets private insurance paid for by the government, but only paid for up to the HMO rate based on competitive bidding for a given level of coverage, with maybe a means tested copay. And I wish they would do that so it affects me. But yes, I know, I'm daydreaming now. My ideas are just too sensible to have a prayer. We prefer doing things the way the dumbs do it. We're pathetic really.  

In the meantime, the Pubs are howling to keep those government crop insurance subsidies going (about 70% of the crop insurance premium is paid for by the government - yes seventy percent!), so farmers only have upside "risk," and can't lose money, no matter what the weather. Our tenant farmer on our farm and others, got about 100K this year.  We got about 10K for not planting crops on land where it would not be profitable to plant them anyway. I just got the check in the mail.

Jackasses - almost all of them - that's what they are.

Thank you.

[Torie]

Obama won't get everything he wants! Come on now, don't be silly. He just proposed that as a starting point. Why don't the Republicans come out with their maximalist position on entitlement cuts? Oh, that's right, because their own base doesn't understand what entitlement cuts mean.

In any case, the stunt you proposed won't work. Republicans should try it though. It will turn even the business community against them.

Also even from your post the numbers are becoming clear, aren't they? $1.2 Trillion in tax hikes and some unknown amount in entitlement cuts (probably using the framework Bob Corker outlined which I used above as well). I think something like this framework will occur. The powers that be want it to happen so it will.

Oh, Obama will fold rather than have 30% of the government shut down. And I don't see why that would be bad for business actually, at least in the short term.

[Sbane]

Obama won't get everything he wants! Come on now, don't be silly. He just proposed that as a starting point. Why don't the Republicans come out with their maximalist position on entitlement cuts? Oh, that's right, because their own base doesn't understand what entitlement cuts mean.

In any case, the stunt you proposed won't work. Republicans should try it though. It will turn even the business community against them.

Also even from your post the numbers are becoming clear, aren't they? $1.2 Trillion in tax hikes and some unknown amount in entitlement cuts (probably using the framework Bob Corker outlined which I used above as well). I think something like this framework will occur. The powers that be want it to happen so it will.

Oh, Obama will fold rather than have 30% of the government shut down. And I don't see why that would be bad for business actually, at least in the short term.

It obviously is bad for business, or you wouldn't see this frenzy about the fiscal cliff, with the stock market going up and down based on what some two bit congressman said. 30% reduction in government spending is even more drastic than the fiscal "cliff".

[Torie]

Well, that is all speculation. I think what business really wants is a sound fiscal plan to get us out of the woods - not smoke and mirrors.

I tried, but I can't find a number as to how much Corker plans to cut entitlement spending, nor how much revenue he is putting on the table with his capping of deductions. It sound a bit like the innumerate Romney plan.

[Sbane]

Obama won't get everything he wants! Come on now, don't be silly. He just proposed that as a starting point. Why don't the Republicans come out with their maximalist position on entitlement cuts? Oh, that's right. Because their own base doesn't understand what entitlement cuts mean.

And I wish they would push converting Medicare into an HMO based system, where everyone gets private insurance paid for by the government, but only paid for up to the HMO rate based on competitive bidding for a given level of coverage, with maybe a means tested copay. And I wish they would do that so it affects me. But yes, I know, I'm daydreaming now. My ideas are just too sensible to have a prayer. We prefer doing things the way the dumbs do it. We're pathetic really. 

I would not support fragmenting the system further. Insurance is such a mess to deal with already, and leads to lower productivity for health care workers.

Medicare gets the lowest rates from providers due to their purchasing power. That MUST not be diminished.

[Lief 🗽]

Hahaha, Torie endlessly complains about the deficit and then his proposed solution is to make Medicare much more expensive by privatizing it. What a joke.

[memphis]

Hahaha, Torie endlessly complains about the deficit and then his proposed solution is to make Medicare much more expensive by privatizing it. What a joke.

Not only this, but the GOP wants ADDITIONAL tax cut for richers, beyond those in the Bush tax cuts. One may not like the Obama deficit reductin plan, but it is a deficit reduction plan. After whining incessently about deficits (a religion that was strangely quiet during the fiscally disasterous W years), they've offered additional tax cuts. They may as well suggest Bushie lose weight by eating additional fast food. All after definitavely losing the presidential election, losing Senate seats and losing the House popular vote. At this point, I am a strong proponent of going off the "cliff" and dealing with individual issues peacemeal next year. Having lost the all in round, the GOP has zero cards and zero chips but are acting like they just won the championship.

[Mr. Morden]

Unless Obama makes an offer that is serious (the Pubs at least made a serious offer - 800 billion in more revenue in exchange for cuts in entitlements in some unspecified amount), the Pubs should just pass the middle class tax cut, and let the taxes rise for "the rich," and let sequestration kick in as well, and announce that they won't be raising the debt ceiling until there is a master deal, or substantial progress towards one, and the government should start planning now on slashing spending by 30% or whatever is required to cap the amount of the debt given the debt ceiling limit if Obama does not plan on getting serious.

According to Jonathan Karl's reporting, the House GOP looks set to do exactly that: Surrender to Obama on taxes by giving him the extension on tax cuts for the middle class only (but expressing their displeasure at doing so by voting "present"....ha ha!), while letting the spending cuts from the sequester go through, and coming back in January to reopen negotiations on that:

http://abcnews.go.com/blogs/politics/2012/12/republican-doomsday-plan-cave-on-taxes-vote-present/

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[memphis]

Another debt ceiling fight should do wonders for the Republican brand. Nice country you got here. Sure would be a shame if something happened to it. Troube with the Republicans is that they've lived in privilege so long, they don't know when they're defeated. As for their only voting "present" for the extention of 98% of the public's tax cuts, that should make for some serious popcorrn theater. I may have to upload that one to youtube. As for their referring to that situation as "Doomsday," that really does tell one all he needs to know about the priorities of the GOP. As if it were not already painfully obvious.

[Torie]

Guys, on the medicare thing I made clear that the government would fully pay for the premiums for those who cannot afford a co-pay. If the insurance scheme is inefficient (that is an empirical matter), the  the government can subcontract out the services to HMO's, and again let anyone go elsewhere if they want, but at no additional cost, assuming it does not create risk pool issues. The idea is to maximize choice, but not at the cost of inefficiency or moral hazard for which the government has to pay. We need the HMO thing, to leash the over treatment thing, which is what medicare providers are incentivized to do now, even assuming there were no fraud, which of course their is, or near fraud, for procedures the Docs know are not appropriate really, but do because they can.

This should not be viewed as an ideological issue IMO. It is a pragmatic issue. How does the government get the most bang for its buck, without being ripped off?  I assume The Left does not oppose that does it?

[memphis]

Torie, we've had a long experiment with privatizing Medicare. By any serious accounting Medicare Advantage has been a colassal failure with costs far higher thpan traditional Medicare. And then there's the Part D debacle, where there is an outright prohibition on negotiating for lower drug costs. Who do you think you're kidding? Privitizing Medicare will only increase public costs and provide taxpayer funded welfare for big insurance and advertising companies.

[Sbane]

This should not be viewed as an ideological issue IMO. It is a pragmatic issue. How does the government get the most bang for its buck, without being ripped off?  I assume The Left does not oppose that does it?

Fragmenting Medicare will lead to less purchasing power for Medicare, meaning higher costs. This is not an ideological issue, but just fact. And makes perfect sense if you think about the economics.

[© tweed]

the side point being, everything should be an ideological issue -- the second somebody cautions you, this is not to be politicized, you should know it is the most political issue of all.  see national security.

[anvi]

This sure is playing out badly--scant details on both revenue and cuts and all played out now in public, which is the exact inverse of how the negotiations should be taking place.  There are also disingenuous reactions to opposing plans being played up in the press.  Plus all this hyperbolic language; "fiscal cliff," "doomsday plan;" just what the doctor ordered to restore confidence, eh?

[opebo]

This should not be viewed as an ideological issue IMO. It is a pragmatic issue.

As Tweed ably points out above, Torie, this should precisely be an ideological issue, and is really not a practical issue at all - after all, the whole deficit plus much more generous benefits for working people could be fixed by simply reducing the privileges of your parasitic class, without in fact changing your leisured and plush lifestyle much at all.

Issues of power and control - the source of all your privilege - are ideological, not practical.  There is nothing 'practical' for the slave in being a slave.

[anvi]

Well, in Torie's defense, what he is suggesting for Medicare closely resembles what HSA (Clintocare) proposed for everyone else in the early '90's, namely subsidization of premium costs on a means-tested basis, and premiums for standard minimum packages determined largely though the result of competitive HMO bidding.  If you have a (an effective) mandate in place ("Obamacare's" mandate is, in all honesty, crap since it's not nearly strong enough), that would take care of the selection issue, and then the benefits of competitive bidding would lower the costs for the greatly expanded pool.  Medicare Advantage was not the same thing--that was direct subsidization of insurance companies to offer Medicare-like coverage with some add-ons and no large-scale risk adjustment--it's no surprise that didn't do anything for cost containment.  I'm not yet convinced that converting Medicare to an HMO premium support system is the best thing to do, but it would reduce the fragmentation in the system, which is one factor that does lead to cost inflation in our system.

Torie also proposes to make major cuts of farm subsidies, which would add a nice piece of change to the government's till and a lot of which go to big corporate operations anyway.  One can hardly say he is against the need for government to make more revenue in order to meet our deficit challenge and spending priorities.  It's all details--a question of "how best to" and not "whether to."

I think we do get to a point where associating details of competing plans with ideological preferences really gets in the way of crafting viable options--indeed we seem precisely to have arrived at that point presently.  And it's not helping.  Not one bit.     

[Sbane]

Ok, maybe I am not getting how the HMO premium support system would work, but how exactly would it reduce costs in the system? Would it be quite different from the current Medicare Part D free for all? Would only one company be getting Medicare dollars? Because otherwise Hospitals will push them around like they do other insurance companies. Only Medicare can call the shots, because they control such a huge part of their patient population.

[Brittain33]

(the Pubs at least made a serious offer - 800 billion in more revenue in exchange for cuts in entitlements in some unspecified amount),

Their offer was sheer nonsense. They said they were willing to take $800 billion in more revenue with lower tax rates and magical deduction closings and dynamic scoring that would somehow generate more money in a way no one can document. It's Laffer Curve magical thinking, not a concession.

Obama's offer was his bargaining position, not a compromise. They will have to work out a compromise behind closed doors, as we said. But Obama has tried bargaining with himself first in the past, putting forth 50% compromises, only to have Republicans hold out for 80% or 90% compromises. He's doing the right thing now by sticking to his guns, which will force the House Republicans to take him seriously. I wouldn't expect Republicans to see it as acceptable, but that's why your side has to be willing to make some real concessions in order to trade for our side to make real concessions. It's not a hostage situation any more, it's a negotiation, and one where the outcome favors Obama. It may be tough for the Tea Party caucus to accept, they value their purity and will primary any Republican who compromises, but we're not playing games any more, this is real. Dems have principles too.

The fact that Republicans campaigned on their plans for the budget, and lost, and lost HARD (including in the national House vote total), matters for what the outcome should be.

[Brittain33]

Oh, Obama will fold rather than have 30% of the government shut down. And I don't see why that would be bad for business actually, at least in the short term.

You and Fred Barnes are literally the only people I have seen who think that Dems would be hurt worse by the fiscal cliff than Republicans.

Even the Heritage Foundation called Boehner's offer a "dud."

http://livewire.talkingpointsmemo.com/entry/heritage-experts-call-gop-counter-offer-dud

"[T]he Republican counteroffer, to the extent it can be interpreted from the hazy details now available, is a dud. It is utterly unacceptable. It is bad policy, bad economics, and, if we may say so, highly questionable as a negotiating tactic."

[anvi]

This is in response to sbane's post above.

Well, part of the problem with Medicare is that doctors have in the past decade or so fought back against its comparatively lower reimbursement rates by ripping it off through both unnecessary testing, prescriptions and procedures as well as finding more expensive coding categories in their reports of treatment.

http://www.publicintegrity.org/2012/09/15/10810/how-doctors-and-hospitals-have-collected-billions-questionable-medicare-fees

As noted, I'm not yet sold by any means on the idea of turning Medicare entirely into an HMO thing.  But the idea behind doing it, as I understand it, is this.  One of the things that causes health care cost inflation in our system is greatly fragmented insurance coverage.  You have, on the one hand, Medicare and Medicaid giving relatively low reimbursement rates to providers, plus lots of uncompensated care, and then the providers turn around and charge patients who are privately insured more in order to recover all these costs.  Other health insurance systems in the world don't suffer from nearly the degree of fragmentation that our system does, which leads to such drastic cost-shifting.  Dems have in recent years tended to favor defragmenting the coverage system by, for instance, making Medicare available for all and allowing people to opt out as they please.  Pubs tend to favor instead defragmenting the system by having private companies, with low-bidding HMOs in the lead, provide the coverage and the government subsidies premiums as needed.  If a strong mandate is in place that gets almost everyone in the coverage pools, this thinking goes, you can at least significantly marginalize risk-adjusted premiums and let competitive bidding drive down the prices.  And in fact, though it leaves traditional Medicare and Medicaid in place and expands the coverage pool of the latter, Obamacare favors the mandate-competitive bidding model for the coverage of non-retirees, as, in a different fashion, the Clinton plan did before it.  

But, at the end of the day, it seems to me, these competing measures only tinker at the margins of the much bigger problem of health care cost inflation.  Defragmenting coverage and getting everyone into requisite pools is only part of the solution, and it will only curb cost inflation so much.  Cost inflation, in my mind, needs to be controlled much more actively than our system allows, so the whole panoply of the reforms we contemplate in the U.S. has a lot of the aura of just rearranging deck chairs.  But we've committed ourselves to spending tons of money on health care in this country, so if it has to be expensive anyway, then I think we should at least find a viable way to get everyone covered.
  

[Torie]

Oh, Obama will fold rather than have 30% of the government shut down. And I don't see why that would be bad for business actually, at least in the short term.

You and Fred Barnes are literally the only people I have seen who think that Dems would be hurt worse by the fiscal cliff than Republicans.

Even the Heritage Foundation called Boehner's offer a "dud."

http://livewire.talkingpointsmemo.com/entry/heritage-experts-call-gop-counter-offer-dud

"[T]he Republican counteroffer, to the extent it can be interpreted from the hazy details now available, is a dud. It is utterly unacceptable. It is bad policy, bad economics, and, if we may say so, highly questionable as a negotiating tactic."

Your link is to a merely conclusory statement. And I don't understand why capping deductions is "bad economics."  But sure, any reasonable structure where deductions are merely capped rather than exorcised will require rate increases. But if you just raise rates on "the rich," you are going to need to slash spending, and slash it hard. Anyway, my anger is more animated by team Obama ignoring the entitlements issue. That is just disgraceful.