Worse Than The Fiscal Cliff

As I said last week, it’s possible that what the Republicans end up settling on as their version of a “deal” aimed at avoiding the Fiscal Cliff may actually be worse than going over the Fiscal Cliff, and if what John Boehner proposed yesterday is their final plan, that prediction will be proven correct.

Jonathan Cohn has the details

Let’s look at what Boehner is offering—and let’s start with his proposal to raise the eligibility age for Medicare. He presumably has in mind a gradual increase in the age, from 65 to 67. The Congressional Budget Office concluded this option would reduce government spending by more than $100 billion over ten years.

That’s real savings, for sure. But they’d come at a terrible cost. The majority of 65- and 66-year-olds would end up with skimpier coverage than they’d have with Medicare—and some would end up with no coverage at all—leaving them exposed to higher expenses. Businesses would also face higher costs, because some of those 65- and 66-year-olds would stay on employer policies. Medicare premiums would also inch higher, since the pool of people in Medicare would be older overall. Overall, according to independent assessments, the government would spend less on medical care, but the country as a whole would spend more, which is precisely the opposite of what public policy is supposed to be achieving right now. [...]

Boehner’s proposal also calls for another $300 billion in cuts to so-called discretionary spending. (That’s spending Congress must reauthorize from time to time.) The proposal doesn’t specify which cuts, but they’d be above and beyond those automatic cuts, which will reduce discretionary spending to historic lows. Adding another $300 billion in cuts would likely “pose significant risks to investments in areas from education to scientific research to food safety to border security to children’s programs such as child care, [the Women, Infant, and Children food assistance program], and Head Start,” according to a statement by Robert Greenstein, president of the Center on Budget and Policy Priorities.

There’s a great deal of distance between a deal that is worse than the fiscal cliff, and one that is barely better, and from the way things look right now it seems unlikely that distance will close without the Republicans making whole-sale changes to their positions.

It’s not impossible for them to do that, but it is implausible if you consider that any compromise must pass through the House of Representatives. And if a presidential election won’t dissuade from flirting with the Romney/Ryan budget, I don’t know what else could.

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  • Brutlyhonest

    It amazes me that no one considered “serious” is addressing the fact that trimming $50 Billion/tear off the defense budget would be an easy way to save some serious dough. And that’s just off the unclassified, public budget. Anyone who has ever been involved with the DoD budget knows how full of waste it is.

    • muselet

      Kevin Drum defined “serious” and “unserious” yesterday:

      Serious (ser’ ee uhs) adj. any of a group of proposals that immiserates large numbers of ordinary people, either immediately or in the future, via cuts to broad-based social welfare programs.
      Unserious (un ser’ ee uhs) adj. any proposal that slightly inconveniences rich people via modest tax increases or annoys military contractors via small cuts to the Defense Department.

      Just about covers it, I think.

      –alopecia