According to Matt Bai (who seems a little bit all over the place), it's a done deal. He reminds us that in 2011, when Speaker Boehner made an initial demand of $400 billion in cuts to Medicare as part of the "grand bargain" negotiations that fell through, Obama responded with a lower number that still would have constituted a massive cut:
Mr. Obama wasn’t willing to go quite that far. But in his counteroffer a few days later, he agreed to squeeze $250 billion from Medicare in the next 10 years, with $800 billion more in the decade after that. He was willing to cut $110 billion more from Medicaid in the short term. And while Mr. Obama rejected raising the retirement age, he did acquiesce to changing the Social Security formula so that benefits would grow at a slower rate.If we are to believe Senator Harry Reid, then Social Security cuts are off the table. Although, while I am glad Reid seems firm on Social Security, nothing is certain in Washington. The White House, for its part, indicates it will insist on increasing the marginal rates, but has been ominously silent on the types of cuts (if any) to earned benefits it will agree to if Republicans go along with raising taxes.
Re-jiggering Medicare might make sense given that Obamacare is now fairly certain to go into effect in 2014. But the wholesale slashing of benefits in the short term will only dishearten Democrats and cause another blowout in the midterms. In the long term, deep cuts will of course devastate the middle and working class folks who are paying into a system that may not pay them back in a meaningful way. These are not entitlements, they are earned benefits.
P.S. The Wall Street Journal is certainly hopeful that the President will agree to slash earned benefits:
Mr. Obama, in a meeting Tuesday with union leaders and other liberal activists, also pledged to hang tough in seeking tax increases on wealthy Americans. In one sign of conciliation, he made no specific commitment to leave unscathed domestic programs such as Medicare, leaving the door open to spending cuts many fellow Democrats oppose.We shall see.