Tuesday, December 04, 2012

We Just Ain't Gonna Play That....

So, the young lean and hungry House Speaker John Boehner has made his counter-offer on deficit reduction and,he is predictably floating the idea of raising the Medicare eligibility age from 65 to 67.
This isn’t a new idea: It’s come up in a lot of deficit reduction proposals of years past, as economists and legislators stare down a Medicare program eating up a growing chunk of the federal budget.
The idea has, however, gained a bit more traction since the Affordable Care Act passed. If the Medicare age were raised, the thinking has gone, the 3.3 million 65- and 66-year-olds would still be guaranteed access to health coverage through the tax subsidies. The lowest-income seniors — those earning less than 133 percent of the federal poverty line – would qualify for Medicaid.
The Republicans seem to be completely void of any negotiating points that wouldn't involve greater hardships on most Americans while preserving the golden bubble and parachutes of their upper crust entitled donors. They obviously are playing a game which they believe has rules they wrote and and understand... The Republicans’ plan might be coming into focus on the tax question: they’ll all just vote present on extending tax cuts the way Obama wants. Which is deliciously ironic, since once upon a time Obama was attacked for voting present too many times. John McCain evidently thought this was completely disqualifying, but the 99.99999% of Americans who have never served in the Senate just sort of yawned at the charge. This seems to be the game, they think they write the rules, but it's time to show them that we just ain't gonna play that....
All of this is apparently in service of waiting until the debt ceiling is reached to extract major concessions for Obama. What Obama needs to do in this upcoming fight is:
Get a “clean” debt ceiling hike, i.e. one with no cuts attached to it
Make sure Republicans take on enough political damage such that they never try to use this strategy again
As tempting as the 14th Amendment option is to deal with this situation (indeed, it should be mentioned prominently), it won’t work for point #2. So we need something else to kill this particular beast. The notion that taking the debt ceiling hostage is a winning strategy for Republicans is hardly sound. After all, Republicans used it as leverage last year and it worked, but largely because the Obama Administration unwisely thought the debt ceiling would provide an incentive to make a deficit deal. This is sort of like setting a goal to run a marathon in four hours, and telling the guy with the starter pistol that, if it takes you more than four hours to run the marathon, he should just go ahead and shoot you. Sure, that would be an incentive, but it’s an incredibly stupid one, pointlessly dangerous. Obama seems entirely uninclined to do the same this time around, and under these circumstances he could actually try some tough actions to fight back against this hostage strategy. Just off the top of my head, the Administration could impose the following measures in between when we reach the ceiling, and when we have no choice but to default on our obligations:
Withhold all funding for federal projects in Ohio and Virginia until the ceiling is raised
Withhold oil & gas subsidies, and suspend all federal permits for resource extraction until the ceiling is raised
Withhold all payments to defense contractors until the ceiling is raised
This would, I think, be a nightmare scenario for Boehner. Not only do he and Cantor immediately become the most reviled politicians in their states, hated by everyone working under a federal contract who won’t be taking home a paycheck that week (and the greater press attention given to the president would likely ensure they’d take the blame), but it also gets the energy and military-industrial sectors of the party (and the politicians representing them) on board with a very strong incentive to seek a clean hike (financial industry backers lobbied hard for an increase last time, so they’re presumably already on board). Sure, there is the possibility that the latter two groups might be galvanized into fiercer anti-Obama opposition is possible, but unlikely. Businesspeople are typically pragmatists, so when faced with a major problem in which one solution is to wait for an indeterminate amount of time in which they are taking in no money to make an ideological point, versus another solution in which they give up literally nothing and start earning again, they will most likely go for the latter. Not to mention that I highly doubt John Boehner has the kind of personal popularity and earned credibility to sell it to these interests, he’s clearly an errand boy and always has been. They’d have little choice but to pass a clean increase over the objections of Fox/Rush/Drudge, or else risk the party flying apart at the seams. The political fallout would likely be bad for Boehner, faced with irate constituents on one hand, furious party interests on another, and on the other side furious media organs blasting him for considering going the other way. With any luck, this might turn into a litmus test in the future with conservative activists, like TARP (which Boehner helped shepherd through the House, FWIW) or the Affordable Care Act.
And this is why the debt ceiling should play out differently than last time. Back then, Obama was panicked about what the state of the economy would be like in a year. Now, a slightly worse fiscal quarter or two is much less a concern, and as he starts to think about his legacy, undoing this particular mistake ought to be job one.

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