Democrats express the fact that they just aren't as down with it this time around, that they're left unimpressed with his negotiating ability in all of the past manufactured crises. He might not be able to rely on allies in Congress to support his efforts. But the biggest obstacle is of course the Republicans that he just keeps reaching out to, the guys on the other side of the table who aren't particularly honest brokers and whose demands keep escalating.
Mr. Obama has signaled a willingness to reduce cost-of-living increases for Social Security by using a less-generous measure of inflation. He has indicated openness to imposing means-testing on Medicare beneficiaries so that high-income retirees would pay more for their medical care, and he has put on the table $400 billion of cuts in Medicare over the next decade.At least the very bad idea of raising the Medicare eligibility age seems to have died and Medicaid seems safe, but the chained CPI for Social Security—no matter how unpopular and how harmful to seniors—is sticking around. As is the idea of making Medicare even more means-tested (wealthy seniors already pay more in premiums), a proposal that would only be symbolic in terms of revenue, but could seriously undermine the program politically. To find out why, go below the fold.
Republicans say they are looking for more, including two elements they discussed with the White House during failed talks in 2011: raising the eligibility age for Medicare and cutting federal costs for Medicaid.
White House officials said that those proposals were deeply flawed as a matter of policy and that they did not intend to submit any more offers until Republicans expressed some willingness to make tax revenue part of the equation.
The problem, as Dean Baker points out, with making affluent seniors pay more is how you define affluent. If it's the same as for tax purposes, it's couples earning more than $450,000 a year. That's just 0.1 or 0.2 percent of the Medicare-aged population. You're not raising enough money with that proposal to make a damned bit of difference in the deficit. As Baker says, would only really save money if affluent is redefined to $50,000-$60,000 per year, a level to which even Republicans probably aren't willing to go.
The political downside of making Medicare even more expensive for wealthier people is that it makes Medicare more like a welfare program instead of the social insurance program it really is. That reduces public and political support for it. Which makes it easier to turn it into a privatized voucher program.
Social Security, which is not a deficit driver, and Medicare benefits should have never reached the bargaining table in deficit talks. They're only on the table because of outrageous and capricious Republican demands. If Medicare eligibility age could come off the table, so should the chained CPI and Medicare means-testing.