These Guys Are Miles Apart



Should be a big week for cliff diving. All the deciders are back in town, and they will be talking. We got a whiff of what’s coming when #1 ranked Republican Senator Lindsay Graham (SC) squared off with #2 Democratic Dick Durbin (IL) on This Week. (link)




These guys made it sound as if they were in love, with plenty of things to agree on. Graham said taxes had to go up, while Durbin said he was willing to put entitlements on the table. Those are huge concession.


I’m watching the show, thinking Grover Norquist (no tax increase pledge guy) must be crapping in his pants when Graham said:


Grover is wrong.


I will violate the pledge.



If this were truly the thinking of the big shot deciders, then it would seem as if a deal could be had, and just maybe we will hit a bit of a speed bump in January, but nothing to worry about at all. At least that is how ABC and the Senators made it look.

The appearance of concessions was just for show. The two sides are miles apart when you peel back their words.


What Graham actually said was that he was willing to talk higher taxes, but he had a very big "If"s. He is insisting that there has to be be a deal that includes entitlements:


Republicans should put revenue on the table. I would trade more revenue for entitlement reform by the end of the year.



Entitlement reform? By the end of of the year? Not a chance in a million.


The liberal wing of the Democratic Party is willing to go the mats to protect entitlements. If Medicare and Social Security have to be part of a deal, then there will be no deal. At least not before another five weeks goes by.


Durbin responded to the big “If” from Graham. The good Senator actually made it sound as if he was being reasonable, but in reality, he wasn't. His counter to entitlement cuts was that maybe there could be some tweaking with Medicare to extend the solvency of the program for a few years, but no way in hell could Social Security get touched.


Durbin backed himself into a corner with his positions on both Medicare and Social Security. Medicare = Obamacare in a few years. There is no way the Administration is going to open the door on this. The Republicans, on the other hand would love it.


Then there is the position Durbin took on Social Security. He said it should not even come up for discussion as:


Social Security does not add one penny to the debt. Not one penny.


This statement is a lie that is covered over by a dopy accounting system called the Unified Budget. In this magical world, the deficits driven by entitlements are hidden. The reliance on this accounting fiction is a dangerous path for liberals to take. The fact is, SS (and the other government retirement programs for Federal workers and the Military) are running billion dollar cash deficits today and will run Mega-Trillion dollar cash deficits for the next seventy-five years. Every penny of those deficits will result in more borrowing from the public.


These deficits may be “Off Budget” in the magical world of Unified Accounting, but they do add to the publicly held debt on a dollar-for-dollar basis. The Rating Agencies are part of the Cliff discussion (like it or not); those folks are no dopes and they fully understand that Senator Durbin is all wet with his talk of Off Balance sheet debt.


Anyway, Graham responded to the totally weak arguments by saying he did not agree and said as flat is could be:


It's not realistic to look at entitlements without adjusting age limits.


Both Social Security and Medicare benefits have to me "means" tested.



Means testing entitlement benefits is something that has to happen at some point. (sorry – it has to) But is this something that could be considered as part of some deal in the next few months? Not a chance in hell is my thinking. Who might be apposed to this?


- Everyone on a military pension that had other income or assets. Think of most of the former officers.


- All the folks who worked at a Federal job, got a pension, and then moved to the private sector and earned a nice buck and yet another pension. They’re screwed with means testing.


- At least 10mm aged souls who are now getting the odd $24K a year from Social Security, and who also have assets exceeding $2mm (or income over $100k).


- Every liberal democrat in the country.

The reality is, a means test will prove (finally) to be the death knell for the entitlement programs. They will lose the claim of being self-funded (they are not today). They will lose the claim that payroll taxes are “forced savings” (they are not –they are another income tax). When these shields are lost, so will support for the programs. The “lefties” know this, may of them are pushing to go off the cliff versus accept cuts in entitlements:




So I’m sitting back listening to the happy talk that the two sides are coming together, and I don’t believe a word of it. There is no “fix” without entitlements being exposed for what they are. And there is no way that after their “big win” the Democrats are going to cave on their most sacred cows. For ten-days we’ve been hearing the Kumbaya talk. This week we will hear a different story. These guys are miles apart.