Boehner on the debt ceiling: Let’s face it, Obama’s in reelection mode
posted at 5:10 pm on July 11, 2011 by Allahpundit
Via the Daily Caller, a criticism that could have been leveled at The One at any time since January 2009. In fairness, Boehner’s in reelection mode too: If you believe Politico, he was more willing to play ball on tax hikes than the rest of the caucus and, fearing a mutiny, was dragged back to the hardline no-tax position after Cantor walked away from Biden’s deficit group. (Boehner insists that tax hikes were never on the table.) Nevertheless, he’s right about O playing campaign games here. Or is he?
According to five separate sources with knowledge of negotiations — including both Republicans and Democrats — the president offered an increase in the eligibility age for Medicare, from 65 to 67, in exchange for Republican movement on increasing tax revenues…
A proposal to raise the eligibility age for Medicare — which was part of a budget plan put forth by Sens. Joseph Lieberman (I-Conn) and Tom Coburn (R-Okla.) — would face steep opposition from within the Democratic Party. The amount of money it would save is also relatively small, as the vast majority of Medicare funding is spent on more elderly populations. The Congressional Budget Office has estimated that if the Medicare eligibility age was increased from 65 to 67, the federal government would save $124.8 billion between 2014 and 2021…
The frameworks of the deal were as follows: In exchange for raising the Medicare retirement age (in addition to other entitlement reforms and cuts that together would add up to $3 trillion), GOP leadership would sign off on $800 billion to $1 trillion in revenue raisers. Those increases, however, would only come in 2013. Republicans would have their choice of poison too. Either they could craft and pass a sweeping package of tax reforms that would result in $800 billion to $1 trillion in revenue increases, or they would be forced to de-couple the Bush era tax cuts, allowing those for people making above $250,000 to expire…
The deal fell apart, in part, because Democrats demanded an upfront commitment from Republicans that they would allow the Bush-era tax cuts to be decoupled, rather than a commitment to revisit the issue at the end of 2013.
My assumption all along has been that Obama’s floating these “grand bargain” packages involving minor entitlement reforms as pure political theater, knowing that the GOP will reject them on tax grounds and fall back to a smaller package of spending cuts only, which O will sign. Then he can turn around and sell himself next year not only as the guy who approved $2.5 trillion in cuts or whatever, but as the adult in the room who was willing to tackle entitlements before Republicans backed out of the deal to protect the rich, etc. In other words, the strategy is simply to make his opponents choke on their tax pledge, even though Obama’s own Deficit Commission offered him a way to reduce debt as a percentage of GDP by lowering tax rates across the board and eliminating special exemptions and credits. (Aside: If Geithner’s telling the truth about the sky falling three weeks from now, why is Obama wasting time with electoral gambits?) According to lefty Greg Sargent, though, both Chuck Schumer and Patty Murray are grumbling privately that the White House’s flirtation with Medicare reform is poisoning their big “Paul Ryan wants to kill your grandma” messaging campaign for next year. Presumably this is all kabuki, where Obama panders to centrists before 2012 by pretending to triangulate on entitlements while liberal Dems pander to their base by pretending that they’re worried about him selling them out, but I’d be interested in knowing whether the Republican leadership thinks it could close enough tax loopholes to get to $800 billion in revenue raisers (without raising rates) to make this happen. Is that even possible or is the number itself proof that the Democrats are playing games?
If you missed them in Headlines, read Mark Halperin’s take from a few days ago on how the debt ceiling media drama will play out — it’s spot on, except that his number is now outdated — and Major Garrett’s piece this morning wondering when Wall Street will finally start to panic about debt-ceiling gridlock and jolt the two sides into getting serious. In a sense, it doesn’t really matter: There’s only One True Debt Ceiling, and when we hit that one, no amount of compromise will get us off the hook.
Breaking on Hot Air