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Sad, Likely Outcome Of The Fiscal Negotiations

From the Politico:

Inside the talks: Fiscal framework emerges

By JIM VANDEHEI and MIKE ALLEN | November 29, 2012

[H]ere’s what to expect: Taxes will go up just shy of $1.2 trillion — the middle ground of what President Barack Obama wants and what Republicans say they could stomach.

That is not "the middle ground." Back in the negotiations in 2010, Boehner offered an $800 billion dollar tax increase. To which the Democrats tentatively agreed, but later walked away from. After the November elections, Obama doubled his demand to $1.6 trillion. So this is not the middle ground at all.

Entitlement programs, mainly Medicare, will be cut by no less than $400 billion — and perhaps a lot more, to get Republicans to swallow those tax hikes.

We will see below that these so-called Medicare ‘cuts’ will take the form of hiking the payment into Medicare from the so-called rich. And as we will also discover at the bottom of this long piece, they will not even happen until ten or twenty years from now. Which means never.

There will be at least $1.2 trillion in spending cuts and “war savings.” …

We already know that the "war savings" are a lie. There are no war savings because every budget has assumed the wars would be over by the time the budget under discussion kicks in. The only cuts will come from the military, which has already been cut to the bone…

Officials familiar with the White House position say Obama plans zero flexibility on his insistence on a higher tax rate for top earners…

A rate hike would be the most difficult element for Boehner to sell to his own members. But Republicans are already trying to build the case — both with their own members and with constituents — that whatever the final deal, they fought hard…

And, after all, that’s all that matters. The economy and the country be damned.

The coming entitlement cuts

There is only one way to make the medicine of tax hikes go down easier for Republicans: specific cuts to entitlement spending. Democrats involved in the process said the chest-pounding by liberals is just that — they know they will ultimately cave and trim entitlements to get a deal done…

Sen. Dick Durbin (D-Ill.) told “Morning Joe” on Tuesday that he could see $400 billion in entitlement cuts. That’s the floor, according to Democratic aides, and it could go higher in the final give and take. The vast majority of the savings, and perhaps all of it, will come from Medicare, through a combination of means-testing, raising the retirement age and other “efficiencies” to be named later…

In other words, these so-called "cuts" will really just be requiring the so-called rich to pay even more for fewer Medicare benefits. All in the name of fairness, of course.

Democrats want most Medicare and other entitlement savings to kick in between 10 and 20 years from now, which will make some Republicans choke..

“A lot of the big entitlement savings comes in the 10-20 year budget window, not the next 10 years,” a Democratic aide said. “Everybody will need to get on board understanding that…

Again, 10 to 20 years from now means never. Everybody needs to understand that, too.

But that will most likely be the deal Republicans will be staring at: tax hikes now in exchange for Medicare changes way later. That will require some fancy footwork by Boehner to sell.

The sad thing is, it probably won’t be that hard of a sell, after all. Elections do have consequences. That is, if Democrats win.

This article was posted by Steve Gilbert on Thursday, November 29th, 2012. Comments are currently closed.

2 Responses to “Sad, Likely Outcome Of The Fiscal Negotiations”

  1. GetBackJack

    The likely end will be

    1. No Budget, thus no edge to the pool
    2. Constant Emergency Spending Measures, loaded with pork
    3. Knives out for Defense Budget
    4. Greater expansion of the Do-Nothing/GetPaid class
    5. You and me ridden like cheap hookers
    6. FiscalCliff redefined .. and redefined … and then a name-change … then redefined …

  2. BillK

    We all know the Republicans will cave, thinking it will make them look “better” when in reality it will just continue to make them look like the weak, ineffective party they are.


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