Monday, June 27, 2011

Leveraging the Debt Ceiling - Medicare

Fellow SLOB W.C. Varones is predicting the Republicans will fold on the debt limit talks and backload any meaningful cuts, making them mostly symbolic. Politicians, being who they are, might disappoint me yet, so I'm not going to argue with a veteran observer like W.C.

But it might all be worthwhile if Democrats would means test Medicare and/or Social Security. Reportedly, Dick Durbin is saying that making the wealthy pay more for Medicare premiums should be on the table. Here is why this makes me smile. It will make it clear that Medicare is a wealth transfer vehicle. It always has been, but it's been hard to make the case, which would be on stark display. Dismantling Medicare as a pure government subsidy of health care spending is vitally important, but politically tricky. This might be the necessary opening.

On the tax side, the Republicans are in a tough position on the so-called oil subsidies, which are nothing more than treating the oil in the ground as an asset that depreciates like any other. Regardless, the Democrats have successfully demagogued this issue, so it might be hard to keep of the table. Since Obama won't allow drilling anyway, it hardly seems like it will matter one way or the other.

This is the main story the Tea Party should be following. So far, Boehner has done his best to reward the Tea Party for its support of Republicans. I know there are those who are upset, but politics is a messy business. But if we don't get some strategic initiative out of the debt ceiling talks, then I will add my voice of criticism.

Finally, I want to thank DooDoo Economics blogger Charles, for putting together a SLOB aggregator. Well done on both having a great idea and taking action.

1 comment:

  1. I love what Dick Durbin said. The need for the wealthy to pay more is a necessity given the distinct need on the situation.