According to new reports, President Obama is once again offering cuts to popular social programs such as Medicare and Social Security as a bargaining chip in the ongoing sequester debate.
Such a move by the president is one that many progressives foresaw and warned against, saying that deficit fear-mongering would only pave the way for an inevitable "grand bargain."
According to White House senior economic official Gene Sperling, Obama "reached out" to lawmakers from both parties on Saturday floating a proposition to cut spending in order to appease Republican demands and the 'deficit scolds' who claim, despite evidence to the contrary, that cutting such programs is somehow fiscally responsible.
"I can tell you for a fact the President was working the phone, talking to Republicans and Democrats who he thought were willing to be part of the type of bipartisan compromise [...]" said Sperling during his Sunday appearance on CNN's State of the Union. Without naming any names he added, "he's reaching out to Democrats who understand we need to make serious progress on long term entitlement reform."
This news does not come as much of a surprise to many despite widespread agreement by economists that these "austerity economics" will only further harm our economy and all but "guarantee a prolonged slump."
"Next to come is the long awaited grand bargain of the austerity lobby, in which Republicans agree to close some tax loopholes (which start out grotesquely swollen) and Democrats agree to breach the previously sacrosanct fortresses of Social Security and Medicare," wrote Robert Kuttner last week, before the cuts went into effect.
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At stake are not just the programs that progressives care deeply about but also the recovery itself and the success of the Obama presidency. The automated reductions of the sequester are only the prologue to a decade long drama, in which the economy faces one budget squeeze after another, all but guaranteeing a prolonged slump.
Of the run-up to the President's weekend conversation, Reuters reports:
Lately, some rank-and-file Democrats and Republicans have been sending signals that they are willing to compromise to end a two-year-old deadlock over tax and entitlement reforms.
Last week, conservative Republican Senator Lindsey Graham of South Carolina said he was open to raising $600 billion in new tax revenue if Democrats accepted significant changes to Medicare and Medicaid as part of a long-term budget deal.
A few days later, liberal Democratic Senator Ben Cardin of Maryland told Reuters that he had discussed with Senate Democratic leader Harry Reid the possibility of replacing the automatic spending cuts with a mix of entitlement reforms and tax increases. [...]