In the ongoing battle of the budget, President Barack Obama has done something very cruel. He has refused to lay out a proposal reflecting what he thinks Republicans want. Instead, he has demanded that Republicans themselves say, explicitly, what they want. And guess what: They cant or wont do it.
No, really. While there has been a lot of bluster from the GOP about how we should reduce the deficit with spending cuts, not tax increases, no leading figures on the Republican side have been able or willing to specify what, exactly, they want to cut.
Theres a reason for this reticence. The fact is that Republican posturing on the deficit has always been a con game. Now Obama has demanded that the GOP put up or shut up and the response is an aggrieved mumble.
Heres where we are right now: As his opening bid in negotiations, Obama has proposed raising about $1.6 trillion in additional revenue over the next decade, with the majority coming from letting the high-end Bush tax cuts expire and the rest from measures to limit tax deductions. He would also cut spending by about $400 billion, through such measures as giving Medicare the ability to bargain for lower drug prices.
Republicans have howled in outrage. Sen. Orrin Hatch, delivering the GOP reply to the presidents weekly address, denounced the offer as a case of bait and switch, bearing no relationship to what Obama ran on in the election. In fact, however, the offer is more or less the same as Obamas original 2013 budget proposal and also closely tracks his campaign literature.
So what is the Republicans alternative? They say they want to rely mainly on spending cuts instead. Which spending cuts? Ah, thats a mystery.
The veil lifted a bit when Sen. Mitch McConnell, in an interview with The Wall Street Journal last week, finally mentioned a few things raising the Medicare eligibility age, increasing Medicare premiums for high-income beneficiaries and changing the inflation adjustment for Social Security. But its not clear whether these represent an official negotiating position and in any case, the arithmetic just doesnt work.
Start with raising the Medicare age. Its not a big money saver, largely because 65- and 66-year-olds have much lower health costs than the average Medicare recipient. When the Congressional Budget Office analyzed the likely fiscal effects of a rise in the eligibility age, it found that it would save only $113 billion over the next decade and have little effect on the longer-run trajectory of Medicare costs.
Increasing premiums for the affluent would yield even less; a 2010 study by the budget office put the 10-year savings at only about $20 billion.
Changing the inflation adjustment for Social Security would save a bit more. I estimate about $185 billion over the next decade. But put it all together, and the things McConnell was talking about would amount to only a bit over $300 billion in budget savings a fifth of what Obama proposes in revenue gains.
The point is that when you put Republicans on the spot and demand specifics about how theyre going to make good on their posturing about spending and deficits, they come up empty. Theres no there there.
And there never was. Republicans have always attacked government spending in the abstract, never coming clean with voters about the reality that big cuts in government spending can happen only if we sharply curtail very popular programs. In fact, less than a month ago the Romney/Ryan campaign was attacking Obama for, yes, cutting Medicare.
Now Republicans are boxed in. With taxes scheduled to rise on Jan. 1 in the absence of an agreement, they cant play their usual game of just saying no to tax increases and pretending that they have a deficit reduction plan. And the president, by refusing to propose GOP-friendly spending cuts, has deprived them of political cover. If Republicans really want to slash popular programs, they will have to propose those cuts themselves.
Paul Krugman is a columnist for The New York Times, 620 Eighth Ave., New York, NY 10018-1405.
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