JONATHAN COHN JULY 12, 2011
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The budget debate is changing by the hour and, as I type this, it appears Senate Minority Leader Mitch McConnell may have finally blinked in the standoff over how to raise the debt ceiling. But let me return for a moment to the most revealing, if not the most important, development from yesterday. It wasn't President Obama’s press conference. It was the report, by the The Huffington Post’s Sam Stein, that Obama had at some point offered a key concession: gradually raising the eligibility age for Medicare from 65 to 67.
Strictly in terms of policy, this is a questionable move. At best. A few months ago, the Kaiser Family Foundation published a report on how such a change would play out. According to that report, some 65- and 66-year-olds could still get insurance from employers, assuming they could still work. But the rest would have to get coverage from Medicaid or the new insurance exchanges. For some of those seniors, particularly those with low incomes, the result would be better cost protection than they enjoy now. But, depending on their source of insurance, many would lose the stability, security, and physician access that Medicare, virtually unique in our insurance market, provides.
Meanwhile, premiums for employer sponsored insurance and Part B coverage would rise, because the population in each pool would become older and, as a result, sicker. Although the Kaiser report didn’t say it, taking younger seniors out of Medicare in this way would also nudge the health care system further away from universal pooling of risk. And that's not to mention the fact that it's risky to even think about this at a time when the threat to repeal the Affordable Care Act, by law or court ruling, remains credible. Without that law in place, many seniors would end up without insurance coverage of any kind.
Over the long run, creating one, seamless insurance system for all ages makes a lot of sense, although in many respects I'd prefer to make everybody else’s coverage look more like Medicare than the other way around. But make no mistake: This proposal would represent a concession, as much for the politics as for the policy. Most of the Medicare cuts under discussion fall neatly into the category of “payment reforms,” similar to what's already in the Affordable Care Act. These reforms would reduce the flow of money going into the pockets of the health care business, in ways that should ideally improve the quality and efficiency of our medical care. Obama and the Democrats can say, honestly, that such cuts wouldn’t touch the program's basic benefits.
That wouldn’t be the case with a higher eligibility age. And you can bet seniors will notice. One reason reaching the age of 65 is such a relief to so many people is that it represents their chance, finally, to get out of the world of private health insurance and into Medicare. For the most part, it means the end of jumping between sources of coverage of wondering constantly which doctors will see them. (Despite what you may have heard, doctors are still more likely to take Medicare than private insurance.) Medicare has its problems but for most seniors it offers peace of mind that other sources of coverage simply don’t, at precisely the age when many of them are first experiencing serious health problems. Postponing the age at which seniors can get that security is not going to make them happy.
So what would Obama get in return? It’s hard to know for sure, given the scattered reports from the leaks. But the pattern certainly isn’t encouraging. As Ezra Klein notes in this morning’s “Wonkbook,” Obama has also offered to adjust the benefit formula for Social Security, so that it pays less in the future. In exchange for these and other concessions, Republicans have shown themselves willing to give up ... nothing. Obama keeps saying he wants a “balanced” approach and “shared sacrifice,” in which some changes like these may belong. But, except for a brief moment when House Speaker John Boehner made the mistake of trying to act like a statesman, the Republicans have made clear they want no part of such a deal. (And, yes, by risking the U.S. economy, as well as the world’s, they are acting like terrorists do. But negotiating with terrorists is never a good idea.)
A lot of my friends think the administration’s approach to these talks reflects a crass political calculation: That positioning the president as a mediator between the parties will boost his reelection prospects. I assume there's some truth to that: Today's New York Times story on Obama's centrist bona fides doesn't look like the kind that materialized out of thin air. But I also see other motives at work. In particular, I think Obama wants to be the president who makes big, transformative accomplishments—he wants to be the president who does what everybody says can’t be done. And right now a major deficit reduction deal is what everybody says can’t be done.
It’s an admirable quality, in most respects. But news like yesterday's makes me worry that Obama’s desire to produce a deal may be blinding him to what’s in it.
29 comments
As annoyed as so many of us are with Obama right now, maybe he's on to something - the long game again? http://www.csmonitor.com/USA/Politics/2011/0712/Obama-on-debt-ceiling-Is-he-winning-over-Americans
- WandreyCer
July 12, 2011 at 3:30pm
As with the 34 billion in cuts in April, which led to the slowing of the recovery in May and June, and as with the extension of the Bush tax-cuts in December, which led to a slight ballooning in the deficit, Obama seems poised to give up something he shouldn't HAVE to give up, to get something he SHOULD have gotten by doing nothing. Surely, by looking back on his Presidency so far, he can realize that everytime he "compromises" with these Republicans, America becomes worse? Far from "Change we can believe in", he's enabling these dogma-driven ideologs to maintain the crippled economy Bush-II left us with.
- AllanL5
July 12, 2011 at 3:36pm
And frankly, this idea that he's demanding things from the Republicans that they can't possibly give up -- like a tax increase for anything at all -- and therefore poisoning the debate, is yet another McConnell attempt to discredit Obama's compromises. "Oh, he's only doing that because he KNOWS we won't go for it". Yeah, right. Meanwhile, it's the Republicans who keep walking out of negotiations, and reneging on their agreements. But that's okay, because it's Obama "poisoning the negotiations". Yeah, right.
- AllanL5
July 12, 2011 at 3:40pm
"As with the 34 billion in cuts in April, which led to the slowing of the recovery in May and June..." Once again, you're presenting speculation as fact. Dangerous!
- wkwami
July 12, 2011 at 4:08pm
"One reason reaching the age of 65 is such a relief to so many people is that it represents their chance, finally, to get out of the world of private health insurance and into Medicare." Bingo. That describes my father to a T. He was self-employed his entire life, had to buy insurance on his own. He'll tell you he prefers 'government' medical care any day to Blue Cross and the wringer they'd put him through. He came to despise insurance companies, especially medical insurance ones, often calling them thieves and liars.
- tmmats
July 12, 2011 at 4:28pm
Without the active support from the leadership in the House of Representatives or the Senate, The President can't encourage individual legislators to consider any increase in the debt ceiling . The leadership and their colleagues must consult before negotiations to increase in the debt ceiling can begin. Carts and horses. The Senate Minority leader has now proposed a plan to raise the debt ceiling over time. If this deal is approved, loud noises will be heard as many cans are kicked down the road. Comments suggest that the President should stop looking for the "grand bargain". In my view, the "grand bargain" is a strategy designed to encourage its opponents to come to rest on some other proposal and form a deal.
- Doug12
July 12, 2011 at 4:41pm
"As with the 34 billion in cuts in April, which led to the slowing of the recovery in May and June, and as with the extension of the Bush tax-cuts in December, which led to a slight ballooning in the deficit, Obama seems poised to give up something he shouldn't HAVE to give up, to get something he SHOULD have gotten by doing nothing." What does "should have gotten by doing nothing" mean? The world doesn't turn on moral imperatives, it turns on power. Obama didn't have the power to boost the spending power of lower and middle income Americans through extended tax cuts and unemployment benefits without giving up anything. (As to your comment that the deal "slightly ballooned" the deficit, I guess some of us only believe in deficit-financed stimulus when it's in the ideologically favorable form of spending and act as deficit scolds when that stimulus involves any tax cuts. Don't confuse your distributional policy preferences with sound macroeconomics.)
- RerunStubs
July 12, 2011 at 4:44pm
Ah, so now "Obama didn't have the power". Yes, correct. So blaming him for the slowdown, as the Republicans are doing, isn't really fair, is it? The current economic conditions are not a result of Obama's policies, but instead a result of Republican unwillingness to LET Obama implement his policies. And holding America hostage on three occasions now to make sure that result happens. Frankly, I don't know why the Republicans get a free ride for behaving this way. And blaming Obama for not being more successful when his opponent is behaving in an irresponsible way will simply reward more irresponsibility.
- AllanL5
July 12, 2011 at 5:27pm
Obama's strategy is a re-election strategy. And the sun rises in the east and sets in the west. As for the negotiations, we (or I) don't know the quid pro quo for the increase in the age of eligibility. Indeed, we (or I) don't know if it was offered as a bargaining point or as an offer of proof as to the lengths Obama would be willing to go in order to make an historic agreement on deficit reduction. I think it's the latter. As for McConnell, his proposal (if it is one) is intended to dump on Obama the burden, and the political consequences, of spending cuts. Is there a more cowardly politician than McConnell? I might point out that McConnell has stated many times that he would not use income tax receipts to repay the roughly $2.7 trillion borrowed from the social security trust fund, which means he supports either (1) major cuts in social security benefits or (2) major increases in the highly regressive payroll tax. But McConnell being McConnell, he doesn't say which.
- rayward
July 12, 2011 at 5:32pm
Re: "Should have got by doing nothing..." -- He could have done nothing in December, let the Bush tax-cuts expire. We'd now have 100 billion more in revenue this year. Yes, the Republicans would have cut off unemployment benefits -- which should have been laid at their door. He could have held the line on the necessity for MORE stimulus spending in April, NOT defended against 100 billion in cuts. And yes, if the Republicans had "closed the Government" that should have been laid at their door. And right now, the Republicans have refused to pass a clean debt-limit bill. My understanding is the 14th ammendment actually makes THAT behavior unconstitutional. There's nothing Obama or the country should have to "Give up" at this point. And if the Republicans force a financial crisis, it should be laid at their door. If he'd done nothing, then the Republicans would have much to answer for. As it is, his compromises have damaged the economy and enabled additional Hostage taking. That's what I mean when I say he keeps giving up things he doesn't HAVE to give up.
- AllanL5
July 12, 2011 at 5:34pm
AllanL5 is right; we saw this coming when the Bush tax cuts were extended. Now, not only the American but the global economy is being held hostage by a minority, most Americans don't agree with this baloney and I don't understand Obama's point of view on this, although some of it, I think, showed up in Bowles-Simpson (?) However, raising the age either of retirement or of eligibility for Medicare/SS benefits doesn't reflect present day realities at all. The cost of private insurance is exorbitant and people start getting really sick much younger than 67, and then there's ageism in the workplace - a very real phenomenon - not to mention the fact that young folks can't find jobs either. So - WTF?
- Sophia
July 12, 2011 at 6:31pm
AllanL5: "He could have done nothing in December, let the Bush tax-cuts expire. We'd now have 100 billion more in revenue this year. Yes, the Republicans would have cut off unemployment benefits -- which should have been laid at their door... If he'd done nothing, then the Republicans would have much to answer for. As it is, his compromises have damaged the economy and enabled additional Hostage taking. That's what I mean when I say he keeps giving up things he doesn't HAVE to give up." More speculation being presented as fact. I've posted about this before, but Nate Silver explains it better thus... "The other is the argument that an alternate strategy would necessarily have produced a better outcome. These arguments take the form of: if Mr. Obama had done X rather than Y, he could have accomplished P rather than Q, or maybe even both P and Q! (The possibility that the strategy might have failed and that neither P nor Q would have been achieved is usually not considered.) Both types of arguments are hard to prove — or to disprove. That doesn’t mean I begrudge people for making them. But they ought to be stated as speculative, rather than as self-evident truths."
- wkwami
July 12, 2011 at 6:33pm
I assume you will now be introducing all of your opinions as speculation, unless, that is, you think yours are somehow less speculative than everyone else's.
- roidubouloi
July 12, 2011 at 7:31pm
Roid, if I were to present my opnions as facts or self-evident truths, and it can be established that it isn't so, then, yes, you ought to call me out on it.
- wkwami
July 12, 2011 at 8:03pm
wakwami, is it speculative that had the Bush cuts been allowed to expire Treasury would now have $100 billion more in revenue this year? Is it speculative to say that had Republicans cut off benefits to the long-term unemployed they'd have had to wear that label? Just saying...
- AaronW
July 12, 2011 at 8:10pm
I think opinions are opinions, wkwami. If we are discussing factual claims, then it ought to be clear what the basis and evidence is for the claims. For other matters, people can make whatever arguments they want. They are either persuasive or not. And disagreement with them can be bolstered with argument to make the contra more persuasive or not. If one is talking about alternative history, what would have happened if . . . then it is self-evident that the opinion can never be proven or disproven. It adds nothing to say that some or all are speculative. Properly, that is merely an expression of the level of confidence of the speaker. Put it another way, take issue with the opinion if you will. The rest is carping.
- roidubouloi
July 12, 2011 at 8:32pm
wkwami, here's a situation from my world of hospital medicine: A person presents to the ER with septic shock. Through a series of errors she does not receive a prescribed antibiotic until four hours after the order was written. She dies later that night. Now, I ask you, did the delay in antibiotic administration cause her death? It's hard to say. Mortality from septic shock is in the range of 50% under the best of circumstances and often higher depending on the degree of organ failure at presentation. At the same time, there is good evidence that early antibiotic administration tends to improve outcomes in sepsis. Still, if you were so inclined, it would be easy to dismiss all discussion as to the timing of our patient's dose and whether it contributed to her demise as speculative. "Don't feel bad that the bag came down from pharmacy right away but a nursing assistent left it sitting on a counter in the med room and then nobody noticed that no one had initialed the dose on the medication chart. She was a very, very sick lady and any talk to the effect that she'd have done better if we'd gotten those meds into her on time is pure speculation." You could say that, but then you'd be settling for mediocrity.
- AaronW
July 12, 2011 at 9:02pm
Well put Roid.
- jet
July 12, 2011 at 9:04pm
It occurs to me that you're like Pangloss. "Obama is the best of all possible presidents!" We cannot ever contrast what Obama has done with what he might have done instead, because the true consequences of what he might have done are unknowable... Okay, but then why discuss anything at all?
- AaronW
July 12, 2011 at 9:05pm
Aaron, perfect.
- Curran1
July 12, 2011 at 11:09pm
"It occurs to me that you're like Pangloss. "Obama is the best of all possible presidents!" We cannot ever contrast what Obama has done with what he might have done instead, because the true consequences of what he might have done are unknowable..." See you are going off the deep end here. If you must boil it down to that, then go ahead and suit yourself. Hey, just the other day, someone was asking if I worked for OfA. Why, because I questioned their point of view. I mean c'mon.
- wkwami
July 13, 2011 at 12:39am
Actually wkwami, that was me who asked that, and it was not because you questioned my point of view. There are many here who question my point of view, but you are the only one of whom I asked that question. I asked it because there is to your posts a quality of on-message professionalism and equibility that stuck me as unusual for this site. Your posts seem like they could be the work of a smart, young recent graduate working for the Obama campaign who has been tasked with arguing the man's case without ever losing his cool. You told me that you don't work for OFA and I accept that. I won't say anything more about it. But why, may I ask, did it get up your nose?
- AaronW
July 13, 2011 at 12:53am
"Frankly, I don't know why the Republicans get a free ride for behaving this way." The root cause is ignorance and lack of a liberal arts education. I mean, how many of the people who vote Republican read TNR, NY Times, Nation, Truthout, and the New Yorker? I think most of them watch corporate owned media. What's more, they get effed over enough by the government, or so they think, and become delusional, paranoid, anti-government schizophrenics. Doesn't help the left's cause when most of DC is bought and paid for by corporations. So, I have a former student who claims to be the ultimate espouser of freedom and individual liberty, yet if Ron Paul doesn't get the nomination, he thinks "McCarthy in Bloom" will be a suitable alternative. Of course, she's a theocratic, aiming for an American Fourth Reich lunatic, but, you know, people love to lie themselves into oblivion in this country.
- khellaf
July 13, 2011 at 12:56am
"But why, may I ask, did it get up your nose?" I wouldn't say that it got up my nose, but it felt like you were implying I was an OfA shill, as a way of discrediting my viewpoint.
- wkwami
July 13, 2011 at 10:48am
At this point it seems as if Obama can offer pretty much anything in full knowledge that the lunatic fringe in the House will reflexively reject it. Seems fairly low-risk.
- cspencef
July 13, 2011 at 4:02pm
"Your posts seem like they could be the work of a smart, young recent graduate working for the Obama campaign who has been tasked with arguing the man's case without ever losing his cool." Aaron, there have been quite a few posts, mine among them, on various threads that could be read that way. Why is it so difficult to accept that there are a lot of people out there -- including a few on TNR -- who like to argue the Obama case without losing their cool? Particularly as Obama's whole deal is about arguing, but not also losing one's cool at the same time.
- ironyroad
July 13, 2011 at 7:44pm
And what if the ACA doesn't survive, which it easily might not with 5 Republicans on the Supreme Court and the possibility of the Republicans winning the presidency and both houses (the filibuster only stops Democrats in situations like these)? Then grandma and grandpa are in for a world of hurt.
- RHSerlin
July 13, 2011 at 8:26pm
irony, it isn't at all hard to accept. But I also believe it likely that political campaigns have in the past and will in the future assign operatives to post on blogs like this one. Why should it make anyone uncomfortable that I asked the question?
- AaronW
July 13, 2011 at 11:20pm
Fair question -- I guess it makes me a little uncomfortable because it's the kind of accusation that seems to trip over its own parody: "His comments are cogent, on-topic, and reasonable -- he must be a plant!"
- ironyroad
July 14, 2011 at 4:48am