If you liked how the health care negotiations went down...

If you liked how the health care negotiations went down

by digby

...you're going to love the budget talks:

...[W]hile opinions vary within the administration his advisers are united in the belief that achieving a workable deal with congressional Republicans will be difficult, and that it would be foolish for Obama to speak up now.

At a roundtable meeting earlier this month, a senior Treasury official described the landscape to about a dozen reporters and bloggers. The optimal moment for President Obama to substantively weigh in on Social Security reform proposals, the official said, will come when House Republicans unveil their budget resolution for fiscal year 2012 and a bipartisan working group in the Senate unveils its deficit reduction package, assuming they reach an agreement.

Those two proposals will force Republicans to grapple with the tensions between their broad opposition to increasing federal revenues and their professed goal in these discussions of reducing the deficit. It's put them in a bit of a box, the official said, and it's possible they may abandon their efforts, and lay the blame at Obama's feet, before unveiling anything. But if their efforts are serious, Obama's economic team sees an opening -- to take pressure off the non-defense discretionary portion of the budget, and to send a signal to markets that the U.S. government isn't so paralyzed that it can't address larger, looming fiscal challenges.

Right. I'm not hearing anything much about defense but then that gets even more unlikely in light of our new war, so old and sick people are the only human sacrifices available to "send signals" to the Market Gods. They haven't exactly made a secret of what "signal" they want to send, have they?

So what constitutes a serious effort? Basically a recognition that Social Security revenues and general revenues have to rise, if the administration is going to accept anything that cuts benefits, even modestly.

So, benefits cuts are on the table. Granted, they are allegedly on the table in exchange for tax hikes, but if there's one thing we know from recent years, tax hikes are easily given back. (It's yer money!) And tax cuts are forever. And there are many ways to define rising revenue that don't entail "raising" revenue.

The administration has been purposefully evasive about what constitutes "slashing," but the senior treasury official made it clear that the White House will only consider plans that harm their progressive interests if revenues are on the table in a significant way. Indeed, as something of an opening bid, Obama's OMB director Jack Lew has recently, and prominently argued that Social Security is not driving current or medium-term deficits.

If the Deficit Commission Chairman's unofficial report is any guide, and I'm fairly sure it is, this would be the basic "mix":

On Social Security, gradually increase the retirement age to 69 by 2075. They would also institute progressive price indexing to cut scheduled benefits for middle and high-income earners. They would index cost of living increases to inflation and not wages. They would also increase the payroll tax to capture 90% of wages, rather than the current 86%. Social Security savings would stay inside the program to keep it solvent, not be used for deficit reduction.

I'll probably be dead by the time that blows up, but I feel sad for any of you younger people who find yourselves in your older years in a "welfare" program that's constantly on the chopping block from the likes of Paul Ryan ---especially one you've paid even more into than you would have before they 'reformed" it for you. I sincerely hope you all get very rich before that happens so you don't have to worry about it, but at best the odds are that most of you will retire in the middle class. It looks like you're going to be "sacrificing" a minimal guarantee of a decent retirement so that everyone can pretend that they are "sending signals" to bond traders --- when they are really sending signals to wealthy donors.

Frankly, our best hope is that the Republicans are so intransigent and short sighted that they will refuse to take yes for an answer:

Republicans on the Hill are wary. House GOP leaders have promised that their forthcoming budget will include entitlement cuts. Others, like Senate Minority Leader Mitch McConnell insist Obama's leadership is a predicate for any action. Thus, there's still some chance that the GOP will back off, and retrain their focus on narrower aspects of the budget. Or -- and this would make those Obama political advisers happy -- the House GOP will introduce a heavily conservative approach, including partial privatization, and Democrats can unite in opposition to it.

Or they could "negotiate" their way back to the commission report, let the Democrats and a few "fiscally responsible" Republicans pass the bill --- and then let Koch and Rove wrap it around their necks in the election.

Neither outcome would surprise a key member of Obama's economic team. In his book, The Pro-Growth Progressive, Gene Sperling, who recently replaced Larry Summers as chief economic policy adviser, wrote, "There is no historical precedent for addressing a major entitlement challenge -- whether to Social Security or Medicare -- well in advance of a crisis."

That's true. But Sperling also said:

"I really hate the whole argument about, is this a crisis or is this not a crisis? Why do we not want to preempt a crisis. Why do we not want to do something early? It is a shame on our political system that there has never been entitlement reform without a gun to our head. . .Wouldn't it be a tremendous confidence-building thing to act early and smart?"

I guess the question is, whose confidence are they trying to build?

This budget battle is looking more and more like a re-run of health care. I guess the administration considers that a great success story and an excellent template for the future. Only this time they are working with a GOP House, a smaller majority in the Senate and a looming presidential election. What could go wrong?