House Speaker John Boehner (R-OH) presented his latest offer to President Obama on Friday. Boehner is offering to agree to a tax rate increase on millionaires only if Democrats agree to major cuts in Medicare and Social Security benefits through a possible combination of a benefit-cutting “chained CPI” and hiking the retirement age.
The first thing to note is that Boehner’s proposal is not particularly ground-breaking. For weeks, leading Republicans like Senators Bob Corker (TN) and Saxby Chambliss (GA) have said they would be open to some revenue increases in exchange for cuts to Medicare and Social Security benefits.Ai??So this isn’t a “cave” or a compromise on behalf of House Republicans. It’s the position they’ve been bargaining towards for the past month.
Second of all, the plan asks seniors to pay for debt problems they did not cause. Two wars, tax cuts for the richest Americans, and Wall Street’s irresponsibility are responsible for our long-term deficits. It is simply unfair for them to have to pay for debt that they did not cause.
As the New York Times’s Paul Krugman writes, “Why on earth would Obama be selling Medicare away to raise top tax rates when he gets a big rate rise on January 1 just by doing nothing?” Furthermore, these tax increases would include rich Americans earning $250,000 or more, not just millionaires.
We should look instead to Senator-elect Elizabeth Warren for a credible approach to dealing with the deficit over the long term.
Warren has an alternative, truly “balanced approach” to tackling the deficit. During a campaign debate last month, she laid out a popular vision for dealing with the deficit: cut back on wasteful military and agriculture subsidy spending, and make the rich pay their fair share with higher tax rates. Watch Warren explain: