Friday, July 15, 2011


It isn't over till it's over, but clearly the Fat Lady is tuning up.

The Debt Limit/Deficit issue is near some kind of Grand Bargain resolution, no matter the posturing of the players to suggest otherwise.

And the Simpson-Bowles report will be the framework for the resolution.

A New Commission will be formed to detail the alterations to the Entitlements that Simpson-Bowles left to be filled in later, but we can be sure that most of the rest of their report will be adopted pretty much as is.

This will mean, for example, that the tax base will be "broadened," by limiting deductions and tax "expenditures" (can anybody say "EITC?") and making "everyone" eligible to pay income taxes instead of just the 47% who do so now. Simultaneously, tax rates on the rich will go down, significantly. The poor, who never had to pay income taxes -- and were never meant to -- will now be "eligible" to put their skin in the game, lucky duckies, so as to make up for the tax losses at the top. Genius.

Entitlements (odd that that word has come to have a pejorative connotation among so many these days; it was never a curse word before) will be "adjusted" so as to reflect the "New Normal Times" we're living in. Back when the Soviet Union collapsed, pensioners took it in the shorts, and many of the survivors are still in dire straits. What we're being prepared for here doesn't look like it will be quite that bad, but it won't be good.

Social Security increases will be slowed, and the retirement age will be raised, but probably not substantially or quickly. It took thirty years to get it from 65 to 67, and it quite possibly will take 30 years to get it up to 70. Semi-Privatizing the program for younger workers is still a possibility, but probably not as much of one as was once the case; the Government needs SS funds for current operations, wars, and benefits for the rich, and at this point, it is hard to see a way for the Government to sacrifice any revenue source, but you never know.

It will become more and more difficult for oldsters to get by on their meager pensions, though. This will cause some distress -- but not nearly enough to do anything about it.

Medicare/Medicaid is going to be where the really nasty entitlement cuts are made, we can be almost certain of it.

Of course Medicaid has already been cut to the bone in state after bankrupt state. From a recipient's point of view, further cuts are almost inconceivable. But they're coming just the same. If you think Granny is being warehoused now, you ain't seen nothing yet. As for access to health care for the poor: Ha. In your dreams.

What will be happening with Medicaid recipients will be a preview of what is going to happen with just about everyone under the ACA, including Medicare recipients.

The signs are that the Ryan Plan will -- with some adjustments -- be implemented for seniors. It will be essentially the same as the ACA for everyone else. Apart from the confusion of the transition, there won't necessarily be any startling changes immediately, but ultimately, it will mean that everyone is paying more for less and less access to health care. That's the key to saving money in Medicaid -- make it difficult or impossible to access the health care system -- and that's what's going to happen with the rest of the health care industry. It will still be there; it may not necessarily even cost you any more than you already pay. You just won't have such "easy" access to care. Genius!

All this and much more is part of the neo-liberal Grand Bargain Obama is intent on. Whether or not he has a second term in the White House could not matter less to him, so all the fancy threats never to vote for him -- or any Democrat -- again!!!!® are pretty meaningless. So? Something about nose and spite comes to mind.

This is what it looks like from here.

Still developing, of course.

And from a political -- not a policy -- standpoint, Obama has played it masterfully.


  1. I thought there was no Simpson-Bowles' report, because there was not a majority on that "Commission" agreeing to it.

  2. Of course you're right. There was no Commission Report, though a majority of the commissioners agreed. To issue an official report, there had to be a consensus of 14 of 18 commissioners, and there were only 11 in agreement.

    So. What was issued was a Co-Chair's Report which has been universally called the "Commission Report" -- which it is not; there was no "Commission Report."

    What I link to is the Co-Chair's Report which has now become the working consensus inside the Palace.

    Which I'm sure everyone recognizes was the completely predictable point of the exercise.

    I hate politics. I really do!