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Entitlements for Revenue, It’s Been the Deal All Along

President Obama talking to National Economic Adviser Gene Sperling, with Treasury Secretary Timothy Geithner on the phone. [Photo by Pete Souza]

President Obama talking to outgoing National Economic Adviser Gene Sperling, with former Treasury Secretary Timothy Geithner on the phone. [Photo by Pete Souza]

“Gene was reiterating what our position has been all along: that any big budget deal is going to have to include significant revenues if Republicans insist on entitlement reforms. And any budget deal needs to have first and foremost the goal of creating good jobs for middle class families and growing the economy—that’s our north star in any budget deal, big or small.” [Businessweek]

THE REPORT that Gene Sperling basically told Democrats that entitlements have to be on the table if they want to get a budget deal was met with rebuttals, but missed the crux of what Sperling meant. It’s not that entitlement cuts couched in reform, savings or economic rescue language are needed, it’s that President Obama long ago said he wanted them, so if Republicans can swallow revenue, it makes cuts to entitlements seem inevitable.

That’s a big difference.

From Joshua Green in Businessweek, quoting Sperling on a budget deal and entitlements, emphasis original:

“Sometimes here [in Washington] we start to think that the end goal of our public policy is to hit a particular budget or spending or revenue metric—as if those are the goals in and of itself. But it’s important to remember that each of these metrics … are means to larger goals. … Right now, I think there is among a lot of people a consensus as to what the ingredients of a pro-growth fiscal policy are. It would be a fiscal policy that—yes—did give more confidence in the long run that we have a path on entitlement spending and revenues that gives confidence in our long-term fiscal position and that we’re not pushing off unbearable burdens to the next generation. That is very important.”

That’s a vague, guarded, jargon-y Washington way of saying, “We’re going to have to accept entitlement cuts—get used to it.” Then came the justification, which was the weakness of the economic recovery…

Republican Rep. Tom Cole put revenue on the agenda on Friday when talking to Al Hunt. The devil of that offer is in specific details, especially if Democrats are going to start giving on entitlements, which will demoralize a Democratic base stoked after the shutdown win.

“The reality is, you’re going to have to have a deal here,” Cole said in an interview on Bloomberg Television’s “Political Capital with Al Hunt” airing this weekend. “And a deal means everybody gives something up.”

[...] “Both sides would like to deal with the sequester,” Cole said. “And we’re willing to put more revenue on the table to do that, and we would like to do it with entitlement savings.”

… Cole also indicated that the place to start with long-term cuts to entitlement programs is Obama’s own budget proposal. …

These include the chained Consumer Price Index, an alternative inflation yardstick, as a benchmark for Social Security cost-of-living increases, requiring higher-income Medicare beneficiaries to pay more and slowing Medicare growth by cutting payments to drug companies and health-care providers.

Senator Bernie Sanders is all over what’s been developing since 2011, when President Obama offered a grand bargain that Speaker John Bohener refused. Social Security Works has sent out emails with Sanders sounding the warning, and is gathering signatures.

Progressives will mount a strong argument against what’s being discussed in Washington, but they face a really tough fight this time around, much tougher than any time before. That’s because Republicans need a win very badly after what Ted Cruz and the Tea Party suicide caucus did to their brand during the shutdown and debt ceiling fiasco, so they may be ready to deal, with Cole’s hint at revenue an opener that meets President Obama’s demand. It’s likely that the White House also believes that a deal on entitlements for revenue is a legacy moment, because Democrats would never agree to do it for a Republican president, with the conservatives feeling this is their chance, because Obama’s been willing to deal on entitlements for revenue all along.

The NBC – Esquire poll that I’ve referred to continually since it came out doesn’t include a question on entitlements, but it does talk about spending. Here’s the graph that the White House, Democrats and Republicans are likely seeing reflected in their own internal polling.

Screen Shot 2013-10-26 at 9.54.16 AM

As you see above, this other tension is that while people in polls say they don’t want cuts to social programs, a majority of Americans, led by independents, do believe the U.S. is in real fiscal trouble. So, since we’re not at the stage where people are ready to cut further into the military budget, it seems, which is the real way we curb what’s going on, it’s revenue for entitlements in the budget board game.

What I’m laying out is the politics of it, like it or not.

If entitlement changes from Democrats are met with revenue from Republicans, the Washington to New York media establishment will sanctify it as a success and the steamrolling will start somewhere between “saving Social Security for future generations” and “not putting debt on the back of our children and grandchildren.”

Today, with President Obama serving up the grand bargain back in 2011, more than entitlements, the waste and bloat in the military industrial complex remains the real third rail of American politics.

The set up is beginning to gel, the talking point that everyone has to give on something their party values, which means no one will be happy. It’s the ultimate symbol for politicians that it’s a fair deal.

“Hopefully in the next year or so (we can) do something on a grand bargain. But the Republicans are going to have to retake their party or it will never happen. Because they have their mindset on doing nothing more on revenue. But until they get off that kick, there’s not going to be a small bargain.” [Washington Post]

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9 Responses to Entitlements for Revenue, It’s Been the Deal All Along

  1. ladywalker68 October 26, 2013 at 11:01 am #

    If I get screwed by this administration this close to being eligible for social security, neither party will get my vote ever again. There is no point.

  2. thoreau October 26, 2013 at 11:38 am #

    It appears like these are the boundries where a deal will be sought. but I’d prefer a progressive initiative. . .”adding higher marginal tax rates for millionaires and billionaires, equalizing the tax treatment of capital income and labor income, restoring a more progressive estate tax, eliminating inefficient corporate tax loopholes, and enacting a financial transactions tax, among other tax policies”.* though these will barely get mentioned, let alone debated, due to the corporate ownership of the media (media establishment!). how sad.

    *http://www.epi.org/publication/back-to-work-budget-analysis-congressional-progressive/

  3. Joyce Arnold October 26, 2013 at 12:01 pm #

    Obama being Obama, at least since the 2008 campaign.

  4. ladywalker68 October 26, 2013 at 12:11 pm #

    I will amend by previous statement: IF Hillary is the Democratic candidate in 2016, I will vote for her….because…well, I have lots of reasons…

    BUTT….any other Senate or House candidates? I already wrote my Senator about 6 months ago expressing my disdain for putting entitlements on the table and received a response back that sounded eerily similar to the mumbo jumbo above that merely translates to: “That’s a vague, guarded, jargon-y Washington way of saying, “We’re going to have to accept entitlement cuts—get used to it.”

    Or to put it bluntly, what they are really saying is:

    “Screw those who are aging. They are declining, they are not doing much for us lately that is worthwhile, they are going to die anyway and they are too weak to fight back. We must put the children and future generations first.”

    Yep. They sure have their talking points ready. Except for that fact that there are many people such as myself who are caught in the WEDGE of having already sacrificed a TON ALREADY to raise our kids and help get them on their feet as adults, and who are now still sacrificing to care for elderly parents who would be dying alone in an alley somewhere otherwise.

    The last thing I need are some snot-nosed politicians whose pockets are lined with corporate gold lecturing me that I need to think of future generations and sacrifice my well-being as I enter the most vulnerable stage of my life.

    If I wrote what I would like to tell these people to do, Taylor would have to dis-allow the post. What is worse, is this is NOT a surprise to me. But just because I saw it coming, doesn’t make it any easier to digest.

    It is pathetic because there are other ways to solve our economic problems that do not include throwing the aging under the bus, but the ball is rolling and this seems to be the only thing the pathetic set of clowns ON BOTH SIDES who are in charge of the government can consider.

  5. fangio October 26, 2013 at 12:36 pm #

    The answer is very simple. Put the entire tax code back to where it was pre Reagan. That is the cause of the entire problem and you only have to look at corporate salaries and endless greed to see the truth. For all intents and purposes we have traveled back to the 1920′s where the rich had everything and the rest had nothing. This is what the rich do when you give them a little ; they take everything because they feel they are entitled to everything. This is the message both progressives and democrats should put forward everyday and in every media outlet they can find : ” Return the tax code to pre Reagan , the original source of all our misery. ” Glass – Steagall was a big part of the problem too but it was an outgrowth of the Reagan mentality.

  6. fairmindedindependent October 26, 2013 at 10:40 pm #

    This is going to be a deal no one will proberly be happy with. Both sides are going to want something out of this. This deal is likely to raise taxes something the Republicans are against and this deal will likely touch entitlements which Democrats are against. I keep hearing that this could be another Simpson/Bowles plan maybe worse who knows. Cut Defense and some programs and that is a chunk of money that can help balance the budget. We don’t need all these military bases in countries that are our allies and have very capable armies of their own. But Republicans will never agree and John McCain will throw a fit over it I am sure.

  7. jinbaltimore October 27, 2013 at 5:46 pm #

    http://youtu.be/ihUoRD4pYzI

  8. jinbaltimore October 28, 2013 at 4:21 am #

    Go Blue!
    Go System!
    Slash that Social Safety Net!

  9. mjsmith October 28, 2013 at 9:13 am #

    The Government needs to cut spending. The dog and pony show of “we’ll raise taxes and for every dollar of tax increase, we’ll cut spending by one dollar.” It never goes that way. People vote for someone because they feel if they don’t they will lose their retirement, or go bankrupt. The two things I like about the libertarian platform is their policy demanding that we audit the Federal Reserve and Audit the Pentagon. I think it is fair. The only reason that there is an objection to it is because the People would be so outraged by how much money is being wasted. Our Government would be much more effective in doing what it is supposed to be doing if we had our economic policy in order. Right now we are bringing in more revenue from taxes than ever and it is still not enough. Cut spending, cut spending, and cut spending. With all of the money I put into Social Security is going to get me what? If that money was in a private account and professionally managed, I would be much better off. Why is Social Security being called an entitlement? Social Security is something that people paid into.

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