Thread: Economics The Fiscal Cliff Approacheth
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Old 11-29-2012, 10:38 PM   #295
Direckshun Direckshun is offline
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The Wall Street Journal says it all:

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Republicans haven't put any comparable offer on the table.
The Washington Post sums the whole problem up beautifully:

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The problem isn’t, as most analysts expected, taxes, where Republicans seem increasingly resigned to new revenue. It’s Medicare. And the particular Medicare problem isn’t that Democrats are refusing the GOP’s proposed Medicare cuts. It’s that Republicans are refusing to name their Medicare cuts.
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That’s partly politics. If nothing else, Republicans are respectful of Medicare’s political potency. Recall that a core Republican message in both the 2010 and 2012 elections was that Democrats, through Obamacare, were cutting Medicare too much. Republicans, already concerned about their brand, don’t want to rebrand themselves as the party of Medicare cuts.

But it’s partly policy, too. The fact is that short of converting the program to a premium support system — a non-starter after they lost the 2012 election — Republicans simply don’t know what they want to do on Medicare.
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That’s left Republicans in a peculiar negotiating position: They know they want “Medicare reform” — indeed, they frequently identify Medicare reform as the key to their support for a deal — but aside from premium support, they don’t quite know what they mean by it, and they’re afraid to find out.

The solution they’ve come up with, such as it is, is to insist that the Obama administration needs to be the one to propose Medicare cuts. “We accepted this meeting with the expectation that the White House team will bring a specific plan for real spending cuts — because spending cuts that Washington Democrats will accept is what is missing from the balanced approach that the president says he wants,” Boehner spokesman Michael Steel said in regard to the most recent round of talks.

Democrats find this flatly ridiculous: Given that the Obama administration would happily raise taxes without cutting Medicare but that Republicans will only raise taxes if we cut Medicare, it falls on the Republicans to name their price. But behind their negotiating posture is a troubling policy reality: They don’t know what that price is.

The likely deal here — which some smart Republicans are talking about — will be a Medicare “down payment” that gets us past the fiscal cliff and then a target for the Medicare savings that negotiators need to reach over the next six months. But there’s no guarantee that the state of the politics or the policy thinking on Medicare will be very different six months from now than it is today. Republican policy types need to start thinking about what they want to do to Medicare, and quick.
Let's hope that changes soon.
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