Originally Posted by Cito Pelon
Well, the GOP came out with their counter-offer. Still don't want to increase taxes on the top 2%. Want to close loopholes, which is fine. Maybe these knuckleheads will reach a compromise.
See thats the thing. The question in all these proposals are, are they designed to be a temporary fix to get past the fiscal cliff or is it a comprehensive package? The GOP package includes about 800B in revenues without raising rates, but the overall size of the program is only 2.2T. That's not very much. They get there, in part, due to increasing eligibility ages for Medicare over time and also using less generous inflationary formulas for various programs, including SS. That's nice and all, but its nowhere near enough to tackle the program. I think CBO said increasing eligibility ages only nets about 250B over 10 years...not too much, so if this is all they really are askign for, I can see why they wouldn't fork over real concessions on taxes (because they arent asking for a ton in return).
If Dems are willing to accept more aggressive changes than that to SS and Medicare, then they prolly are secretly willing to shelve the over 250k Bush cuts and maybe reorganize the entire tax system Bowles-Simpson style to really raise some serious revenue. If Obama isn't willing to accept something more aggressive (i.e. Ryan-style premium support/vouchers, where some of the costs are shifted onto seniors and they can buy Medicare, but they'll have to put about 6k a year in their own money into their HC), then they aren't going to give the Dems the bigger tax prize they want. It's a negotiation.
There's a way to solve this comprehensively. It involves tremendous political pain for both parties, but conceptually it will solve alot of fiscal problems. Go very aggressive on SS/Med and in return we'll do even better than sunsetting the 250k cuts....a full return to the Clinton tax rates for everyone...raises a ton of revenue (and some haircuts for defense, too). I'm willing to accept a short term recession for this, but it has to have both components. That will make a dramatic difference in our fiscal situation.
I want a grand bargain on the scale of 5T in long term savings.