Balloons flying everywhere
The president’s fiscal plan is also expected to draw on options the White House had put on the table in talks with John Boehner, House speaker, over a “grand bargain” on fiscal reform. Those discussions eventually fell apart.
During those discussions in July, the White House had agreed to $425bn in cuts to Medicaid and Medicare – with $150bn extracted from Medicare providers such as doctors and hospitals, $150bn coming from Medicare beneficiaries, and $125bn coming out of reforms to Medicaid, administration officials said at the time. Among the menu of policy ideas to reach those targets were an increase in the eligibility age for Medicare.
Allowing Medicare more flexibility to negotiate drug prices with pharmaceutical groups and preventing special deals delaying the entry of generic drugs into certain markets could also be part of the plan.
Mr Obama’s plan could also feature a change in the way the US government measures inflation, switching to a less generous chained-consumer price index. The biggest impact of this measure – which could save between $250bn and $300bn over ten years – would be felt by recipients of Social Security, the retirement scheme.
During the failed July talks, the White House agreed to put that change in place starting in 2015, but with protections for low-income workers.
I hadn’t heard that they were thinking about adding SS to this particular mix, so maybe this reporter is just adding that in on the basis of the July debacle. Let’s hope so.
Aside from the utter foolishness of the policy, on a political level I think they’d do much, much better as the staunch protectors of the programs. The image is of someone who is willing to trade away long term benefits for short term gain and I don’t think that helps. But it may be working, at least a little bit, to soften up Democrats. I’m hearing chatter from various supporters about how this is a “good trade” if the president can get his jobs program through and that raising the eligibility age isn’t all that bad etc.
It would appear that after a few months of exposing people to the idea, what would have been considered inconceivable just a few months ago is now considered reasonable among quite a few people.
And here I thought the President didn’t have any power to change minds.
Update: See that bully pulpit do its magic:
Which of the following approaches is more likely to be successful in growing the U.S. economy and creating jobs?
Spending cuts and tax cuts will give businesses more confidence to hire — 57%
Government needs to keep spending at current level now because the job market is so weak — 13%
Government needs to spend more to stimulate the economy — 23%
Not sure — 7%
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