Boehner has moved to a $1 million threshold for the Bush tax cuts, and Obama has moved to $400,000, indicating that a deal is somewhere in between. That’s assuming, however, that Boehner will be able to keep his own caucus in line: More Republicans have called for the party to concede on marginal tax rates, but they’re still a minority in the party. Today, Boehner vowed to hold a House vote this week on a tax extension on a $1 million threshold. That could be a hardball negotiating tactic with the White House. But it could also be a litmus test of sorts for his own party’s willingness to accept any tax hike.
However, not all the angst is coming from the right. Many on the left are now expressing concern, and in some cases complete outrage, over a possible cut to Social Security benefits. Under a "chained CPI", retirees on Social Security would receive a smaller cost of living increase than the current formula to automatically take care of inflation.
Liberals are not happy with this concession to Republicans, calling it a “backdoor benefit cut.” The administration has tried to allay these concerns by promising to shield the impoverished elderly from harm. The White House hasn’t gone into details, but the top-line numbers indicate that Obama is backing a modified plan with less sweeping benefit cuts: Obama’s latest offers promises $130 billion in savings from chained CPI, which is significantly less than the $220 billion in savings that the Congressional Budget Office says would be achieved through a full-out transition to the new inflation index.
That suggests that Obama would protect some retirees, giving up some savings in the process. But Democrats will want to know exactly how low-income seniors are protected -- CBPP’s Jared Bernstein, for one, wants to make sure any deal exempts benefit changes to Supplementary Security Income, which goes to the elderly, blind and disabled. And it won’t necessarily be easy, policywise, to protect the elderly against cuts, as Mike Konczal argues. At the same time, Republicans could push Obama to squeeze even more savings out of Social Security than he’s currently offering: House Speaker John Boehner’s original proposal contained $200 billion in chained CPI savings.
So now, a deal is in the works... But it may never even get off the ground because both sides hate it so much. Even Senator Dick Durbin (D-Illinois), a close White House ally, said today he and the bulk of his Senate Democratic colleagues won't accept any Social Security benefit cuts by any name.
In an interview with me this morning, Senator Dick Durbin, a top ally of the White House, told me he opposes including Chained CPI for Social Security in the final deal. He said it would be difficult for Democrats to support Chained CPI for Social Security if it ended up in the deal, though he said it was premature to say anything definitive about how they would vote.
“We ought to deal with Social Security in a separate conversation that is not part of deficit reduction,” Durbin told me. “To do it at this stage is the wrong way to go.” [...]
Pressed on why the White House is backing this, given that it’s bad policy, Durbin blamed Republicans, saying they were insisting on including it in a final deal. “The president is trying to get to an agreement, and I understand that,” Durbin said. “Boehner has been adamant that he wants Chained CPI.”
“The Speaker and many of his Republican friends are hell bent on Chained CPI,” Durbin continued. “It may be part of an overall solution [later] but to do it at this stage is the wrong way to go.”
Since Harry Reid vowed last month to keep Social Security and Medicare off the table in "Fiscal Cliff" resolution negotiations, many progressives are now asking him and House Minority Leader Nancy Pelosi (D-California) to hold the line against any entitlement benefit cuts. But then again, they may not have to do this for too much longer. Back to the right flank, House Speaker John Boehner (R-Ohio) may now be killing this deal.
"Plan B calls for sending us a bill that, the only thing will be in it is raising taxes on people who make over a million dollars," Reid said. "If that's not walking away, I don't know what walking away is.... I was happy to see the last statement that Boehner made at his press foray where he said negotiations are not closed. I talked to the President at a quarter to one today, he hasn't heard a word from Boehner."
Other Democrats are also trying to yank Boehner back into negotiations, and wedge him from House conservatives.
“News this morning of Speaker Boehner offering his ‘Plan B’ is yet another example of House Republicans walking away from negotiations on a big deal to avert the fiscal cliff and reduce the deficit in a balanced way," said Rep. Chris Van Hollen (D-MD), House Dems' top budget guy, in a statement to reporters. "By pushing this totally lopsided approach, the GOP is once again trying to minimize the impact on the wealthiest in our country and maximize the burden borne by working families.”
Last week, Boehner introduced his "Plan B" as some kind of alternative Republican tax plan. However, it raises nowhere near the kind of revenue that President Obama has been looking for. And ironically enough, while Boehner and other Republicans have been screaming the most about the fiscal "CRISIS!!!", they have yet to offer any serious proposal to avert the "Fiscal Cliff"... And that also means a plan that can actually pass Congress and be signed by the President.
So perhaps there was more to Obama's offer than met the eye. Perhaps he's trying to show everyone just how "un-serious" Congressional Republicans have been in resolving this fiscal fiasco. After all, we've lived through this before. It seems like the only way Obama cam secure a deal with Congress is by shaming just enough Republicans into accepting one.
So we still don't really know yet how this will be resolved. And at this point, we don't even know for sure if it will be resolved by the end of the year. All we know for sure is that President Obama wants a deal ASAP, he does not same to risk a "double dip recession" that may result from "Fiscal Cliff-diving" next year, and that he's ready to cut a deal with Republican leaders in order to solve this once & for all. Now, it's just a question of whether Republicans will let one happen... And perhaps if that deal can simultaneously pass Congressional Democrats' muster as well.