Yesterday on "Meet the Press," Bob Woodward of the Washington Post displayed documents that outline a “Grand Bargain” the White House offered during debt ceiling negotiations in 2011.
The document in question appears to have been drafted by White House Legislative Affairs Director Rob Nabors, and includes the annotation ‘Post Gang of 6' which suggests it was created as Supercommittee talks broke down.
Woodward describes the three-page document as “confidential” and points out Obama’s apparent willingness to take on sacred cows such as Medicare and Social Security. Specifically, the president was open to increasing the minimum age for Medicare recipients.
Obama’s proposal called for:
- Caps on discretionary spending;
- Extension of the payroll tax cut;
- Increase in the debt ceiling;
- A sequestration mechanism if deficit reduction is not achieved;
- Reduction in spending on Medicare and non-Medicare health programs;
- Changes to Social Security taxes and benefits; and
- Tax reform through simplification and elimination of loopholes.
Some elements of this proposal are now included in the fiscal cliff spending cuts, such as the reduction in Medicare spending. The package would have also called for at least $836 billion in increased revenues through unspecified tax reform.
The Obama administration’s proposal, like the Supercommittee’s agreement, contains a sequestration mechanism. However, Obama's sequestration appears much more politically palatable for Republicans, at face value, than the proposal that ultimately passed. The entirety of the spending cuts would be in Medicare and Medicaid – not defense – and the bottom four rates of the Bush tax cuts (10%, 15%, 25%, and 28%) would be preserved.
If Obama is as open to entitlement reform as this proposal indicates – and Congressional Democrats go along with potential cuts in benefits – there is a very good chance that he and Republican leadership will find enough common ground to reach an agreement that avoids the fiscal cliff.
Here is the document via Meet The Press:
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