Well, the news today seems to be summed up in this Huffpo article:
According to five separate sources with knowledge of negotiations -- including both Republicans and Democrats -- the president offered an increase in the eligibility age for Medicare, from 65 to 67, in exchange for Republican movement on increasing tax revenues.
The proposal, as discussed, would not go into effect immediately, but rather would be implemented down the road (likely in 2013). The age at which people would be eligible for Medicare benefits would be raised incrementally, not in one fell swoop.
Considering how most people reacted here to the COLA proposal, I don't consider this to be a serious proposal but more of a test to see how committed the GOP is to preventing ANY sort of additional revenue in a debt deal.
And by the looks of it, it seems like Obama got his answer.
Nate Silver had a tweet a bit ago that I think sums up Obama's strategy in 140 characters or less:
Metaphor #2: Obama floating the "grand bargain" is like when they put the $69 steak on the menu to get you to buy the $49 steak.
Offering to raise the Medicare eligibility age to 67 is quite a juicy steak to dangle in front of the GOP but I think he's smart enough to know that he can do that because Grover Norquist has them chained and muzzled up so no matter what he dangles in front of them, they can't take a bite.
However, Obama can get some credit with indie voters when the deal falls through and it will contrast well when he ends up facing Michele "I won't vote to raise the debt EVAH" Bachmann.
Say what you will about the Wall Street elite and the billionaires that comprise the GOP establishment, but they're going to be the ones that take the biggest hit when the global economy crashes over Republican intransigence to doing one of the few things minimally required to keep the country functioning. They may be evil but they care about their money more.
So, I think that Obama's dangling this in front of them because:
1. He knows the GOP can't take it
2. He knows that Dems would kill it for him before it made it into the bill, but he can look "more moderate" to the press-corps and to dumbshit low-information indies
3. It will set up the GOP to take the blame if (and when) the debt ceiling deal dies
4. He's trying to push them (and Democrats) to accept the original deal that Biden was working around ($2 Trillion in Cuts, $400 Billion in Revenues)
5. Perhaps he's also trying to get Dems to accept the COLA chained-CPI cut by throwing out something far more egregious and unacceptable.
My personal view regarding the chained-CPI is that it would be a much more acceptable alternative to raising the Medicare eligibility age.
Or perhaps I'm wrong about all of this and Obama really does think that the health care legislation last year addressed the issue of pre-existing conditions and subsidies enough to make this a more viable option, but I can't see a way in which the Democratic Senate and House Dems (which will of course be needed to pass anything in the House) would EVER go along with it.
So let's not jump off a bridge or spout off a bunch of diaries about Russ Feingold, Bernie Sanders, or Alan Grayson primarying the sitting President. Let's wait to see what develops first but I've learned from the previous deals Obama's made that he's boxing in the GOP and setting himself up for an aggressive 2012 campaign on making the Rich fully contribute their share to society.