Leaked Documents Detailing “Grand Bargain” Show It is No Bargain for Americans

By Kevin Zeese
November 15, 2012

During the election the president and his advisers were silent on what they would cut to make a deal with the Republicans over the so-called ‘fiscal cliff,’ now we see why. Now that the details of the ‘Grand Bargain’ that President Obama offered in the last fiscal crisis have been leaked it is evident that he may have lost re-election if his base had known what he had planned for them. The cuts he suggested would have not only affected the very popular Social Security and Medicare programs (meaning he probably would have lost Florida) but also programs for veterans, youth, the poor, civil servants, farmers would have been cut (all the swing states might have switched). Indeed, these documents are the Obama version of Romney’s 47% comment. Obama showed he was planning to turn his back on the constituency that he needed to get re-elected while at the same time offering tax cuts to business.

Here is what Bob Woodward reported on NBC:

White House Grand Bargain offer to Speaker Boehner Obtained by Bob Woodward

November 11, 2012

Below are documents obtained by the Washington Post’s Bob Woodward that show a grand bargain proposal the White House was prepared to make in order to reach agreement with the House Republicans last year. This is how Woodward described the documents on Meet the Press this morning:

“This is a confidential document, last offer the president — the White House made last year to Speaker Boehner to try to reach this $4 trillion grand bargain. And it’s long and it’s tedious and it’s got budget jargon in it. But what it shows is a willingness to cut all kinds of things, like TRICARE, which is the sacred health insurance program for the military, for military retirees; to cut Social Security; to cut Medicare. And there are some lines in there about, “We want to get tax rates down, not only for individuals but for businesses.” So Obama and the White House were willing to go quite far.”

What does it mean? Barry Grey describes it well:

“The far-reaching and reactionary substance of Obama’s social policy emerges very clearly in secret documents that were leaked last weekend relating to negotiations in the summer of 2011 between the White House and Republican House Speaker John Boehner over raising the US debt limit. In response to Republican demands for massive spending cuts in return for an agreement on raising the debt limit, Obama proposed a ‘grand bargain’ to slash the federal deficit by $4 trillion over ten years through a combination of cuts in social programs and increased revenues from ‘comprehensive tax reform.’

“Obama proposed more than $2 in cuts for every $1 dollar in revenue increases ($2.8 trillion in cuts, $1.2 trillion in increased tax revenues). However, the talks broke down due to opposition to any tax increases among House Republicans.”

* * *

“In fact, the document, dated July 19, 2011, spells out an unprecedented assault on social welfare programs and a pro-corporate revamping of the tax system that would have been politically unthinkable for Republican presidents from Reagan to George W. Bush.

“On Medicare, the document proposed reducing spending by ‘at least $250 billion’ from 2012 to 2021 and ‘at least $800 billion’ from 2022 to 2031. This would be achieved, in part, by ‘alteration of the eligibility age for Medicare’ and ‘adjustments to premiums collected for services and benefits currently covered under Part B and Part D.’ In other words, the eligibility age for Medicare health coverage would be raised and premiums for a range of hospital and clinical services as well as for drugs would be hiked.

On Social Security, the document proposed changing the formula for the consumer price index (CPI) as applied to cost-of-living increases in benefits so as to slash outlays by $112 billion over 10 years. The new CPI would also apply to veterans’ disability payments, cutting $24 billion.

“The proposal further stipulated: ‘Reduce the 75-year estimated shortfall of the Social Security program by 0.7 percent… as a percentage of taxable payroll, with a balanced package of tax and benefit changes.’ In plain English: increase payroll taxes and decrease benefits.

In addition to these sweeping cuts in the two most basic entitlement programs, the document spelled out a list of additional reductions, including:

* Civilian retirement, i.e., retirement benefits for civilian federal workers: $33 billion

* Military retirement: $11 billion

* TRICARE drug copayments/TRICARE for Life: $16 billion

* Postal reform: $16 billion

* Pension Benefit Guarantee Corporation: $9 billion

* Flood insurance: $4 billion

* Agriculture subsidies/conservation programs: $33 billion

* Nutrition assistance: $2 billion

* Higher education: $10 billion.

On the tax side, the document proposed to ‘Enact reform that improves international competitiveness and increases incentives for companies to invest in the United States and succeed globally.’ This is an open-ended formula for cutting business taxes and increasing profits through the decimation of social programs and the further impoverishment of the working class.

“The document specifically endorsed cutting both corporate tax rates and individual income tax rates for the wealthy, with the injunction to ‘Reduce the number of individual and corporate income tax rates… reducing each rate to the lowest possible level consistent with the overall revenue target…'”

There you have it, decimation of critical social programs while corporations get tax cuts. It does not need to be this way.  While President Obama was negotiating away critical programs affecting all Americans, at the Occupation of Freedom Plans we held our own supercommittee hearing and published a report: “The 99%’s Deficit Proposal: How to create jobs, reduce the wealth divide and control spending.” The program cut the deficit by $1.2 trillion in  a few years, rather than the Obama-Congress goal of ten years, by going where the money is. Wealth is concentrated at the top and taxed at very low rates.  By looking at what actually works, we raised taxes to appropriate levels, cut wasteful spending on weapons and war and restarted the economy.  If the people had one party that represented their interests, rather than two corporate-dominated parties, we’d be having a very different debate in the nation’s capital.

Since the election Obama has promised to end the Bush tax cuts on the wealthy, resulting in a tiny, inadequate increase in the top tax rate of 4.5%. When we remember the economic realities, e.g.  how much wealth the 1% has hoarded in the last decade, the growing profits and cash reserves of big business  and how the wealthy took 92% of all income gained in the “recovery” while the poorest Americans lost 91% of their wealth during the recession, this is clearly inadequate — a grand bargain for the wealthy but not for the rest of us. Now that the election is over the people need to represent ourselves as we have no representation in Washington, DC. We can stop the continued theft on behalf of the wealthy but must realize it is our responsibility to do so and that we have the power to do so.

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  1. Jeff Joseph

    Shows what a phony our President 1% really is. I’m not sure we wouldn’t have been better off with Romney.He would have galvanized the Left now they are asleep. Thinking all is well with President 1% reelected. Maybe the Republicans will save us with their intransigence on taxes and we go over the Cliff which may be the best thing that could happen for the country. The Cliff is just a phony construct for the 1% to screw the 99% . Go to Economists for Peace and Security http://www.epsusa.org to learn about the Fiscal Cliff.

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