By PAUL KRUGMAN
In the ongoing battle of the budget, President Obama has done something
very cruel. Declaring that this time he won’t negotiate with himself, he
has refused to lay out a proposal reflecting what he thinks Republicans
want. Instead, he has demanded that Republicans themselves say,
explicitly, what they want. And guess what: They can’t or won’t do it.
No, really. While there has been a lot of bluster from the G.O.P. about
how we should reduce the deficit with spending cuts, not tax increases,
no leading figures on the Republican side have been able or willing to
specify what, exactly, they want to cut.
And there’s a reason for this reticence. The fact is that Republican
posturing on the deficit has always been a con game, a play on the
innumeracy of voters and reporters. Now Mr. Obama has demanded that the
G.O.P. put up or shut up — and the response is an aggrieved mumble.
Here’s where we are right now: As his opening bid in negotiations, Mr. Obama has proposed raising about $1.6 trillion
in additional revenue over the next decade, with the majority coming
from letting the high-end Bush tax cuts expire and the rest from
measures to limit tax deductions. He would also cut spending by about
$400 billion, through such measures as giving Medicare the ability to
bargain for lower drug prices.
Republicans have howled in outrage. Senator Orrin Hatch, delivering the G.O.P. reply to the president’s weekly address, denounced the offer
as a case of “bait and switch,” bearing no relationship to what Mr.
Obama ran on in the election. In fact, however, the offer is more or
less the same as Mr. Obama’s original 2013 budget proposal and also closely tracks his campaign literature.
So what are Republicans offering as an alternative? They say they want
to rely mainly on spending cuts instead. Which spending cuts? Ah, that’s
a mystery. In fact, until late last week, as far as I can tell, no
leading Republican had been willing to say anything specific at all
about how spending should be cut.
The veil lifted a bit when Senator Mitch McConnell, in an interview with The Wall Street Journal, finally mentioned a few things — raising the Medicare eligibility age,
increasing Medicare premiums for high-income beneficiaries and changing
the inflation adjustment for Social Security. But it’s not clear
whether these represent an official negotiating position — and in any
case, the arithmetic just doesn’t work.
Start with raising the Medicare age. This is, as I’ve argued in the
past, a terrible policy idea. But even aside from that, it’s just not a
big money saver, largely because 65- and 66-year-olds have much lower
health costs than the average Medicare recipient. When the Congressional Budget Office
analyzed the likely fiscal effects of a rise in the eligibility age, it
found that it would save only $113 billion over the next decade and
have little effect on the longer-run trajectory of Medicare costs.
Increasing premiums for the affluent would yield even less; a 2010 study
by the budget office put the 10-year savings at only about $20 billion.
Changing the inflation adjustment for Social Security would save a bit
more — by my estimate, about $185 billion over the next decade. But put
it all together, and the things Mr. McConnell was talking
about would amount to only a bit over $300 billion in budget savings — a
fifth of what Mr. Obama proposes in revenue gains.
The point is that when you put Republicans on the spot and demand
specifics about how they’re going to make good on their posturing about
spending and deficits, they come up empty. There’s no there there.
And there never was. Republicans claim to be for much smaller
government, but as a political matter they have always attacked
government spending in the abstract, never coming clean with voters
about the reality that big cuts in government spending can happen only
if we sharply curtail very popular programs. In fact, less than a month
ago the Romney/Ryan campaign was attacking Mr. Obama for, yes, cutting
Medicare.
Now Republicans find themselves boxed in. With taxes scheduled to rise
on Jan. 1 in the absence of an agreement, they can’t play their usual
game of just saying no to tax increases and pretending that they have a
deficit reduction plan. And the president, by refusing to help them out
by proposing G.O.P.-friendly spending cuts, has deprived them of
political cover. If Republicans really want to slash popular programs,
they will have to propose those cuts themselves.
So while the fiscal cliff — still a bad name for the looming austerity
bomb, but I guess we’re stuck with it — is a bad thing from an economic
point of view, it has had at least one salutary political effect. For it
has finally laid bare the con that has always been at the core of the
G.O.P.’s political strategy.Read the original article here.
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