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View Diary: Paul Ryan Not Asking For Social Security Cuts, Why Is Obama Insisting On Them? (137 comments)

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  •  I think it is because (11+ / 0-)

    it is the path of least resistance for the President.

    At this point, the President is not going to get any more tax increases (through overall tax reform or otherwise) without what is being called "meaningful entitlement reform."

    "Meaningful entitlement reform" (which means more than tinkering around the edges, but really changing the trajecotry of future growth) is virtually impossible for Medicare without a significant overhaul of the program.  (Things like letting Medicare negotiate for drugs are extremely "small potatoes" compared to the dismal long-term outlook for Medicare, which is on a completely unsustainable path (pdf here).  He might not get much even then, but his only chance for more tax revenue above what he got in the fiscal cliff deal is a combination of tax reform (flattening the rates, eliminating deductions/exemptions, for an overall increase in revenue) AND offering the Republicans "meaningful entitlement reform."  Without "meaningful entitlement reform," Republicans will propose tax reform that keeps revenue at about 18-19% of GDP.  After the fiscal cliff deal, starting next year when we will see the revenues from the increased taxes, we will be back up to that level, which is where we need to be in terms of revenues (if you look at historical levels) .

    The only feasible way to address that HUGE long-term Medicare problem (other than going to, as Krugman says, "death panels and sales taxes") is to do a change to the system.  Chained CPI," on the other hand, does not meaningfully change the structure of the Social Security program but keeps the nature of the program intact, while reducing the amount of increase in benefits from this point forward.  

    I think it's a "path of least resistance" thing.  Certainly it makes no logical sense, because Social Security is not NEARLY the problem Medicare is, and if you brought the insured wages back up to 90% of all wages (where it had been historically), you could do a lot to address whatever problems Social Security has for the next several decades.  

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