Details of the Democratic supercommittee members’ initial offer to their Republican counterparts have leaked, and they show that the plan offers far greater concessions than anyone expected.
The Democratic proposal calls for $1.3 trillion in increased tax revenue, along with similar amounts in discretionary spending cuts. The plan would also include $475 billion in cuts to Medicare and Medicaid, including $200 billion in Medicare beneficiary cuts. In total, the Democratic plan would reduce the deficit by more than $3 trillion dollars over the coming decade.
These drastic cuts would come with a high price, however; the budget plan would force Democrats to renege on several promises that they have made to voters. Over the summer, President Obama said that he wouldn’t let the middle class carry the whole burden of a deficit reduction plan, but steep cuts to government benefits are sure to hit the middle class hard.
Furthermore, although a group of 19 Democratic senators (including Majority Leader Harry Reid) sent a letter to Republican Minority Leader Mitch McConnell last week imploring him to protect seniors instead of millionaires, the Democratic plan would almost certainly require larger out-of-pocket payments by Medicare beneficiaries with incomes as low as $12,000, while not substantially increasing taxes for the wealthy.
Surprisingly, the Democrats’ jumping-off point in these negotiations is even farther to the right than the past two bipartisan budget plans to come out of Washington: the Simpson-Bowles plan and the Gang of Six plan. According to a report by the Center on Budget and Policy Priorities, the Democratic offer contains $92 billion more in Medicare and Medicaid cuts than the Simpson-Bowles plan. At the same time, the Democratic plan contains between $800 billion and $900 billion less in tax revenue than either the Simpson-Bowles plan or the Gang of Six plan. Clearly, the Democrats are trying to offer concessions up front in hope of forging a bipartisan compromise with the Republican supercommittee members.
Unsurprisingly, Republicans consider the Democrats’ initial offer to be a non-starter. Top aides to Speaker of the House John Boehner have already advised the Republican members of the supercommittee that the Democratic offer is “not serious.” In response, the Republicans have offered a plan that would include far more substantial cuts than the Democratic plan, along with no new taxes whatsoever.
It appears that after all this time, the Democrats have still not learned their lesson. They tried to offer concessions on health care in order to produce a bipartisan compromise; Republicans were so grateful for the effort that they created the Tea Party to protest it. Democrats extended the Bush Tax Cuts as a gesture of good will before the upcoming debt ceiling debate; Republicans responded by pushing the nation to the brink of financial catastrophe. Now Democrats are offering a debt plan with by far the highest ratio of spending cuts to revenue increases ever proposed by their party, and Republicans have already flatly rejected it.
Starting with concessions does nothing but allow the Republican party to make their starting offer even more conservative. Until Democrats realize that the Republicans have no interest in compromising with them on anything, they will continue to get pushed around Capitol Hill.