Thursday, July 7, 2011

UPDATE: Latest developments in the debt ceiling/deficit reduction talks

Reports out of Washington suggest that some major new developments are underway with regard to the debt ceiling/deficit reduction talks. 

Obama apparently is upping the stakes calling for $4 trillion in debt reduction over the next 10 years well beyond the $2.4 trillion that negotiators have been discussing.  Part of the deal would be to consider major cuts/changes in Medicare and Social Security.

In return, Republicans may agree to up to $1 trillion in “new revenues” largely from an overhaul of tax laws and tightening/eliminating some tax breaks/tax loopholes.

Liberal Democrats in the House are so concerned about Obama’s willingness put Medicare and Social Security on the negotiating table that they sent a letter to the White House today saying, in part:

First, any cuts to Social Security, Medicare and Medicaid should be taken off the table. The individuals depending on these three programs deserve well-conceived improvements, not deep, ideologically driven cuts with harmful consequences …[R]evenue increases must be a meaningful part of any agreement.  Tax breaks benefiting the very richest Americans should be eliminated as part of this deal… The middle class has experienced enough pain during the last three years. Republicans are willing to inflict even more. We will not join them.


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