Via Mark Thoma: 

"After months of criticism that he has not led on budget talks, Mr. Obama will urge bipartisan negotiations toward a multiyear debt-reduction plan that administration officials said would depart sharply from the one proposed last week by House Republicans.

The Republican plan includes a shrinking of Medicare and Medicaid and trillions of dollars in tax cuts, while sparing defense spending. Mr. Obama, by contrast, envisions a more comprehensive plan that would include tax increases for the richest taxpayers, cuts to military spending, savings in Medicare and Medicaid, and unspecified changes to Social Security. ...

Several presidential advisers interviewed in recent weeks said Mr. Obama has been torn between wanting to propose major budget changes to entice Republicans to the bargaining table, including on Social Security, and believing they would never agree to raise revenues on upper-income Americans as part of a deal. ..."

I will be thoroughly impressed if Obama actually rolls out a plan that does the things he says, but calls for them to be implemented incrementally and over the medium-term. What I expect is a proposal to cut Social Security and a statement that Medicare is on the table as well. Heck, while he's at it he might as well propose further lowering tax rates while "broadening the tax base". Maybe he can remove the mortgage tax deduction, and further cripple the housing market. Yeesh. The coming months are not going to be fun for progressives...


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