Is Obama selling us out -- again?
Ezra Klein reported yesterday afternoon and then again in the evening on The Rachel Maddow Show, that a debt ceiling deal is all but done: the president will take a top marginal tax rate of 37% and raise the retirement age to 67. It sounds outrageous, but Klein makes a compelling case, even though it is very much akin to tea-leaf reading. Basically, he's saying that Obama used to always say the top marginal tax rate must go back up to the Clinton levels and now he is signaling that he would take less. But this isn't new. I noticed right after the election that Obama had started saying that income over a quarter million must be taxed more -- specifically neglecting to mention how much more. So this isn't some sudden change.
Also note that Ezra Klein was completely wrong a couple of weeks ago when he said that fiscal cliff negotiations were all but done -- right before the Republicans made a week long show of how there was no progress on the negotiations. So I'm not at all certain that he is right. But as I said, he makes a compelling case. And if he is right, this is really bad.
Paul Krugman wrote exactly what I think:
First, raising the Medicare age is terrible policy. It would be terrible policy even if the Affordable Care Act were going to be there in full force for 65 and 66 year olds, because it would cost the public $2 for every dollar in federal funds saved. And in case you haven't noticed, Republican governors are still fighting the ACA tooth and nail; if they block the Medicaid expansion, as some will, lower-income seniors will just be pitched into the abyss.
Second, why on earth would Obama be selling Medicare away to raise top tax rates when he gets a big rate rise on January 1 just by doing nothing? And no, vague promises about closing loopholes won't do it: a rate rise is the real deal, no questions, and should not be traded away for who knows what.
So this looks crazy to me; it looks like a deal that makes no sense either substantively or in terms of the actual bargaining strength of the parties. And if it does happen, the disillusionment on the Democratic side would be huge. All that effort to reelect Obama, and the first thing he does is give away two years of Medicare? How's that going to play in future attempts to get out the vote?
He's completely right. If Obama does this, it will indicate that he's been playing us all along. He talks pretty, but he is nothing close to liberal. I wish I weren't so cynical that I didn't believe it entirely possible.
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