The Obama Diary

Edited for Clarity: Congress finally has a deal on the table that may pass …. So, who won? Who lost? Is it a massive cave by the President and Democrats? Or is there something more to it?

In looking at the deal, folks on the left are acting outraged. Medicare takes some cuts, there’s no revenue component, it looks like the Republicans got everything they wanted. Indeed, Speaker of the House John Boehner says he “got 98 percent of what I wanted”. But did he? Here’s some of the details that say he might have some ‘splaining to do later:

Revenues: Democrats are upset that the deal does not include increasing revenues. But that’s not accurate. In fact, it virtually guarantees a revenue increase by the end of 2012. And Boehner knows it…..

See here for details

…. An interesting battle will start next year. It will begin to pit the military industrial complex against the bankers and million/billionaires. If the rich guys want to keep their tax cuts, 50% of it will come from military spending – contractors. That’s a big lobby to fight against. It will be fascinating to see how the spin starts to work there, as Republicans find their corporate benefactors are suddenly pitted against each other, and the American people get to see where the loyalties really lie.

Medicare and Social Programs: …. The area touched here has nothing to do with individuals. It’s all on the provider side. To be sure, this could have an effect on individuals, as providers may decide they don’t want to deal with Medicare if reimbursements are reduced, and this could reduce choice. But on the subscriber side, nothing changes. More importantly, the subscriber side is sequestered from further cuts, as are Medicaid and Social Security in their entirety.

Again, this is really a trap for the Republicans. With all of those areas off the table, where will they find cuts? And remember, they still need to cut an equal amount from defense as they do for anything else. Social programs are a large part of the budget. When you take them off the table, you remove major sources of budget reduction. Which means that cuts to other areas will have to be massive to have a chance at making a difference. So Republicans will have to sell Draconian slashes to areas such as education to be able to find enough budget to cut.

…. So, What Did It Accomplish?

A whole bunch. Pell Grants have actually been increased. The default scenario has been averted until at least 2013 with a debt ceiling raise. It did not require the passage of a Balanced Budget Amendment. And the cuts that are included are backloaded, meaning that they come further down the line, when the economy is (hopefully) on a better footing.

Sure the President is taking heat on this now. But the focus can now be on jobs (on which there has not been a single piece of legislation), and Republicans who are gloating now may not be so cheerful when it comes time to make the cuts they demanded.

Full post here

Thank you Starmm