Lots of interesting nuggets here. :popcorn:
Social Security Changes on the Table in Debt Talks
President Obama will have to get Democrats to agree to changes in entitlement programs and Republicans to agree to some revenue increases to get a deficit-reduction and debt-ceiling deal.
By Major Garrett
Updated: July 7, 2011 | 12:26 a.m.
July 6, 2011 | 11:41 p.m.
While the political jousting continues, President Obama and congressional Republicans are moving closer to a multi-tiered deal that would include changes in Social Security benefits, tax reform, increases in various user fees, and large-scale cuts in annual spending, according to numerous sources close to the negotiations.
No agreement exists and both sides continue to shadow box even as they move cautiously around the underlying policy and unpredictable political reaction any one or all of these potential shifts might incite. On Social Security, it's unclear if Obama is willing to raise the retirement age or merely accept changes in inflation-adjustment calculations that would reduce benefits but not alter the program's basic architecture. Administration officials have said a proposal from Obama's Simpson-Bowles deficit-reduction commission to raise the Social Security income cap are among the ideas being considered if there is a comprehensive deal in the making.
In the nitty-gritty of negotiations, Republicans have made clear to Obama if he wants to spare domestic "investments" funded through discretionary spending he need only embrace structural changes to Social Security or Medicare. Republicans contend altering current benefit schedules would extend solvency for Social Security and put bigger deficit-reduction numbers on the board, giving Obama more room for annual discretionary spending. And both sides are still fighting over how much to cut future defense spending within the context of annual discretionary spending. Democrats want deeper cuts than the GOP and the GOP wants to guard against any legislative bias in favor of defense cuts over non-defense discretionary savings. Like every other issue, much has been discussed and dissected -- but nothing has been agreed to.
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Importantly, none of the thorny issues such as how much to cut Social Security, how high to raise user fees, or how to trade lower income and corporate tax rates for the abolition of corporate tax favors and subsidies have been resolved. There is general agreements in some areas: Senate Minority Whip Jon Kyl, R-Ariz., said on Wednesday, for example, that Republicans have already agreed to up to $200 billion in higher user fees.
Conservative activists are already getting nervous, fearing Kyl's user-fee announcement was a trial balloon to gauge reaction with the base.
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http://www.nationaljournal.com/social-security-changes-on-the-table-in-debt-talks-20110706
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