Yesterday, supercommittee Democrats proposed a massive deficit reduction plan consisting of $300 billion in economic stimulus, discretionary spending cuts and increased tax revenue, and an alarming $575 billion in cuts to Medicare and Medicaid, at least $200 billion of which would come directly from benefits. (See my story here ). After I published, reports came out that not only were Democrats proposing draconian  Medicare cuts, but also floated the idea of adjusting the Consumer Price Index used to calculate Social Security benefits—in other words, they were willing to cut that program, too.
Republicans on the supercommittee rejected the deal immediately, due to the tax hikes, and proposed  their own: it, too, included deep cuts to Medicare and Medicaid, deeper (but not by much) than what Democrats proposed, along with deep discretionary spending cuts and some limited “revenue raisers.” The revenue Republicans propose raising isn’t really in the form of taxes but increased government fees and higher co-pays for Medicare recipients.
Democrats have rejected this, rightly, because it makes deep cuts without changing the tax code nor really raising substantial new revenue. So we have a situation very similar to the summer standoffs over the debt limit: Democrats offer a “grand bargain” including tax increases along with many things that really anger their base, Republicans reject it in favor of an even more extreme package with no tax increases, and there’s a standoff. Everyone kicked this can down the road, to use the parlance of Washington pundits everywhere, by creating the supercommittee, but the fundamental dynamics haven’t changed.
The difference now, as I noted yesterday, is that the Republicans have no particular leverage. They possess the same amount of votes on the supercommittee as Democrats, and are if anything more scared of the triggers that get pulled in the event of a deadlock—Republicans don’t want to see the massive defense cuts that would then occur. Hopefully this means that Democrats won’t sell the farm in order to achieve a deal, but that remains to be seen. If I had to guess, I would say the committee deadlocks.
Meanwhile, the media coverage is the same as it ever was—that is, awful. Today in the Washington Post, Dana Milbank wrote  a column on the supercommittee that turns on the following analyses:
Reasonable people on all sides know that tackling the nation’s long-term debt problems will require both an increase in taxes and cuts to entitlement programs. But just weeks from the committee’s deadline, Republicans continue to resist new tax revenues, and Democrats dance around the need for entitlement cuts [emphasis added].
Putting aside his insistence that entitlements must be slashed—Social Security does not contribute to the deficit—how did Milbank follow the supercommittee all day yesterday and come away thinking Democrats are dancing around entitlement cuts?