The GOP may have some real leverage here

A possible explanation for reports that the president is open to raising the qualification age from 65 to 67


Steve Kornacki
December 11, 2012 5:29PM (UTC)

For all we know, the fiscal “cliff” deal that ultimately emerges – if one emerges at all – won’t end up touching the eligibility age for Medicare or altering the formula for Social Security benefits. But the possibility that it will, first raised in a widely-circulated Ezra Klein column last Friday, has spurred outrage and panic on the left.

Klein wrote that a deal seemed to be taking shape quietly, and that “the headline Democratic concession is likely to be that the Medicare eligibility age rises from 65 to 67.” This would be in exchange for Republicans giving in partially on Obama’s call for the restoration of the Clinton-era tax rates on income over $250,000; whereas the top marginal rate was 39.6 percent in the ‘90s, Klein suggested the deal would set it at 37 percent. Alternately, there's talk that the White House will instead settle for chained CPI -- that is, using a new, less generous cost-of-living measure to compute Social Security benefits.

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Joan Walsh explained yesterday why the Medicare trade-off is, to put it mildly, unacceptable to progressives. And there are similar fears on the left about chained CPI, although there may be more variables at work there. The real question, though, is why the White House might even be entertaining anything like this. After all, if there’s no deal at all this month, the full Clinton rates will be restored for the rich without any changes to Medicare or Social Security.

I think there’s a possible explanation here, but before going any further, let’s make clear that this entire discussion is based on little hard evidence. President Obama has said nothing publicly about raising the Medicare age or chained CPI, and there’s been no official indication from the White House that either idea is on the table. Klein’s reporting is a compelling reason to believe one or both ideas are in the mix, given how well-sourced he is in the administration. But it could also simply be that the White House is testing the reaction of the Democratic base to various possible compromises, and that the blowback generated by the Medicare trial balloon has already been enough to deflate it.

OK, that takes care of the disclaimers. Now, let’s suppose for a minute that the administration really does see one or both of these ideas as viable options. Why would they? The answer could have something to do with the debt ceiling.

Look at it this way: Republicans have essentially no leverage in the current “cliff” negotiations. The policy consequences of doing nothing are a lot worse for them than for Obama and the Democrats. So Obama is in position to demand concessions that the GOP wouldn’t ordinarily give up – like, for instance, an increase in tax rates, something no Republican in Congress has voted for in 22 years. Faced with this imbalance, though, Republicans have lately been making noise about forcing another confrontation over the debt ceiling, which we’re due to hit a little over a month into the new year.

This is where things get complicated. What we know is that Obama’s official position is that any attempt by the GOP to replicate the brinkmanship of the summer of 2011 is a non-starter; that this time he won’t negotiate with them if they threaten to block a debt ceiling increase – a move that would cause a default with horrific and immediate economic consequences. Fair enough. We also know that Obama and congressional Democrats want any “cliff” deal to address the debt ceiling too. The president has called for a procedural change that would allow Congress to register its disapproval of any debt ceiling hike, without actually blocking it. Short of that, Democrats want to make sure that there’s some kind of debt ceiling extension in any deal reached this month.

The problem, as TPM’s Brian Beutler outlined last week, is that “Democrats have no consensus plan to execute if the debt ceiling isn’t increased before the end of the year.” In theory, Obama could stare down any Republican debt ceiling gamesmanship by invoking the 14th Amendment, which states that “the validity of the public debt of the United States…shall not be questioned.” So, the idea goes, Obama could raise the debt ceiling unilaterally and just ignore Congress. But the White House has already ruled out this option explicitly.

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And if the 14th Amendment is off the table, Republicans may actually have some leverage here, since that leaves no way for Obama to raise the debt ceiling – and avoid calamity – without Republican consent. Putting the Medicare age or chained CPI on the table now (if that’s what the White House is doing) feels like a tacit acknowledgement of this reality. Obama has no desire to negotiate directly with the GOP over a debt ceiling extension, and he won’t have to if the debt ceiling is included in a fiscal “cliff” deal. But for that to happen, he’ll probably have to give some serious ground to the GOP on entitlements – and, as Jonathan Chait put it, raising the Medicare age has “weirdly disproportionate symbolic power” with Republicans. Changing the Social Security formula would probably fall into this category too.

This is not an argument for making the kind of deal Klein has outlined. It’s just an attempt to understand why the White House might be open to it, despite having so much leverage in the “cliff” negotiations. Of course, there are many other possibilities here, including that Obama actually doesn’t have much of a problem with raising the Medicare age or embracing chained CPI – and that he’d be fine with doing either if it means scoring a big, headline-grabbing bipartisan deal.

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Steve Kornacki

Steve Kornacki is an MSNBC host and political correspondent. Previously, he hosted “Up with Steve Kornacki” on Saturday and Sunday 8-10 a.m. ET and was a co-host on MSNBC’s ensemble show “The Cycle.” He has written for the New York Observer, covered Congress for Roll Call, and was the politics editor for Salon. His book, which focuses on the political history of the 1990s, is due out in 2017.

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Barack Obama John Boehner Medicare Opening Shot Social Security

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