A possible compromise on entitlements?

In the summer of 2011 the 2012 elections seem very close as the matadors and the picadors are already goading the bull for the final fight. Whose blood will be spilled and how much of it will be bull is yet to be determined. Much can happen in a year, but here is how the contest looks today.

The economic situation is indeed not where the Obama administration would have it. The GOP wants to play games with the debt ceiling but they have only come up with budget-cutting plans that even made the Teaparty choke. Unfortunately, both extreme political wings have failed to do more than object and they propose the kinds of cuts more liking to their ideology when a comprehensive or different approach would make each thrust of the sword seem less painful.

The GOP smells blood: “Obama failed the American people. He did not pull us out of the recession as well as he promised; Keynes and government stimulus are dead; long live tax cuts as the only valid stimulus.”

Obama supporters retort, “Tax cuts never pulled us out of recessions; they may have a track record some other time in the business cycle, but not now.”

The Democrats are stuck with a puny argument that, We sort of have failed to meet goals, but the Republicans would have failed worse. We at least saved us from Great Depression II.”

Not to be forgotten: Obama combined tax cuts to business, tax rebates to consumers, payroll tax cuts with government spending. His approach split the difference with Keynes and the low tax folks.

Both extreme political wings are being bull-headed. Let us credit the GOP for winning the prize for being the best at it, though. They have dug their hooves so deeply into the dirt that to change their position on no new taxes on anyone would be a defeat of epic proportions. Upping the ante, they changed the definition of taxes to include closing any loopholes, reducing any corporation welfare of subsidies and tax breaks, and coined the impossible goal of “no new revenue.”

Any and all commissions comprised of those not in Congress or running for office conclude there is no way the deficit can be reduced without more revenue and reforming entitlements.

The progressives, on the other hand, snort at any proposed change to entitlements, but backing down now would not have the same dire political blowback as it would on a GOP that wed itself with fanfare to the Ryan plan. The GOP claims it has the only plan to save Medicare and its vouchers would protect seniors (even though the CBO said it would cost seniors an average of $6,000 more per year). The GOP reassures those over 55 they will be grandfathered in, but those younger have already paid in a bundle toward their entitlements and they are not taking kindly to that subterfuge. With glee, progressives are sticking their lances into the GOP hide.

Sen. Joe Lieberman (I-Conn.) and Sen. Tom Coburn (R-Okla.) promoted a reasonable idea that deserves serious consideration: Simply move eligibility for Medicare gradually to 67. Some GOP senators just introduced a bill to save Social Security by raising eligibility ages to 70 after 2017 for those born after 1970 and reducing benefits to the rich over 50 years. The details await scoring, scrutiny, and debate, but why was the concept not applied to GOP Medicare proposals, too?

The reality is that most seniors are living longer, better and can work past 65. Family finance guru Suzy Orman on CNN recently pointed out that seniors will have to work past 65 anyway because their retirement nest egg of home equity has disappeared , a decade of market gains has been wiped out, and pension funds are shaky.

I only tolerate “ no kill” bull fights. It would also be more tolerable if partisans would not fight to the death and sincerely seek out the best and least painful plans.