It sounds as if Ezra Klein is hearing more or less the same things I’m hearing: Republicans willing to give up a lot more on tax rates, although not fully undoing the Bush tax cuts in the 250-400 range; additional tax hikes via deduction limits in a form that hits the wealthy, not the upper middle class (28 percent and all that); unemployment extension and infrastructure spending; but “chained CPI” for Social Security, which is a benefit cut.
Unlike what we’d heard from Republicans before, this contains stuff that Obama can’t get just by letting us go over the cliff: more revenue than he could get just from tax-cut expiration, unemployment and infrastructure too. But it has a cost, those benefit cuts.
Those cuts are a very bad thing, although there will supposedly be some protection for low-income seniors. But the cuts are not nearly as bad as raising the Medicare age, for two reasons: the structure of the program remains intact, and unlike the Medicare age thing, they wouldn’t be totally devastating for hundreds of thousands of people, just somewhat painful for a much larger group. Oh, and raising the Medicare age would kill people; this benefit cut, not so much.
By recalculating benefits through chained CPI, it's lower income seniors who are going to get hurt here, they're looking at a 5% cut or more in SS benefits. It would also constitute a tax increase of a couple hundred bucks a year on most American households. I'm sure the President thinks it's a partial giveback on the payroll tax cuts, and it is, and it does sound reasonable...but reasonable gets punished later.
In other words this doesn't look like an awesome way to start a second term. We'll see what the final deal is. If this is the final deal, I'm thinking it's not a good one.
At all. I'm trusting the President to get a better one, and that better part I'm suspecting is in the details that we don't know about yet.
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