Saturday, September 10, 2011

Two Days Later

President Obama's jobs and deficit speech Thursday included a few good, though general, proposals and set the right tone. "It was," The New Republic's John B. Judisobserved,"angry, direct, and entirely appropriate to the occasion—an 'economic crisis,' which, as he said, has been made worse by a 'political crisis.'

The "political crisis" is more accurately described as Republican obstructionism, but never mind. Obama's program, if fully enacted, probably would drop the unemployment rate approximately 1% and although not sufficient, would be very significant.

But that doesn't really matter- and you knew that, didn't you? Because enactment of the best of the President's policy prescriptions, at least as laid out, isn't going to happen. His other suggestions, however, are far more likely to meet favor with the GOP, one of Obama's objectives. The President stated

The agreement we passed in July will cut government spending by about $1 trillion over the next ten years. It also charges this Congress to come up with an additional $1.5 trillion in savings by Christmas. Tonight, I'm asking you to increase that amount so that it covers the full cost of the American Jobs Act. And a week from Monday, I'll be releasing a more ambitious deficit plan - a plan that will not only cover the cost of this jobs bill, but stabilize our debt in the long run.

Congressional "centrists" are only to eager to comply. House Ways and Means Committee Democrats- Democrats! are recommending the Medicare eligibility age rise to 67 while, The Washington Post reports

More than two dozen senators from both parties met privately this week to revive hopes of a grand debt-cutting bargain — exploring how to push the newly formed debt "super-committee"to find far more than its assigned goal of $1.5 trillion in deficit reductions.

The senators want at least $3 trillion slashed from the deficit over the next decade. In addition, they plan to press the committee to pass a major tax overhaul to lower rates and close special-interest loopholes, as well as changes to entitlement programs such as Medicare, according to several participants.

The effort comes as the 12-member super-committee begins what is expected to be a grueling process to map out its plans before a November deadline — and it threatens to undercut the chances for President Obama to win passage for portions of a jobs plan expected to cost hundreds of billions of dollars in the short term.

If this goes according to script, Republicans talk about closing loopholes and dropping rates, and eventually back off closing loopholes and still insist on dropping rates. Or both get done, leaving reinstatement of the special-interest deductions to the next Congress. Meanwhile, K Street, including the health care industry, is at work:

The American Hospital Association has a strategy for heading off any more Medicare payment cuts: Tell Congress to get the money from Medicare beneficiaries instead.

The association is urging its nearly 5,000 members to lobby Congress to raise the Medicare eligibility age from 65 to 67, in addition to other money-saving alternatives, according to spokeswoman Marie Watteau.

Haven't we seen this before? Good ideas coming out of the White House, with congressional Democrats and even most of the "professional left" praising the President's initiative, oblivious to the likelihood that the "compromise" demanded by the media will result in the more progressive aspects being dropped. It is not surprising, however, because, as Judis remarked

Obama spoke of an “economic crisis,” and of the plight of the unemployed, but he didn’t make the one point that lies the center of his own program: that the nature of this crisis is such that if the government doesn’t spend money, the economy will not recover. It won’t recover on its own, but it will continue to shed jobs, as it has. And if the government cuts spending, as Obama and the super committee are preparing to do, during this downturn, it will deepen and prolong it. Obama steered clear of making this point, saying instead that his spending and tax cuts will be fully paid for. (And he mentioned “changes” to Medicare and Medicaid, which he should leave to Paul Ryan.) That’s fundamentally misleading, and opens the door to the Republican budget cutters.

Touted as a "jobs" speech, the address emphasized the importance of deficits almost as much as reducing unemployment. Congress and lobbyists take their cue and are gearing up to emasculate whatever in the proposals actually would reduce joblessness, while they set their sights on earned benefits. And when that "compromise" is reached, the Administration will believe it has moved one more step toward getting the votes of those treasured independents.

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