A Temporary Cease-Fire

The budget deals being talked about in the Senate and the House suggest that the government shutdown will end soon and that the debt ceiling will be raised, at least for a while. This cease-fire looks like the Tea Party has snatched a possible victory from the jaws of defeat.

Helaine Olen, author of Pound Foolish, appropriately calls this a ‘cease-fire’ because nothing got settled and hostilities are bound to resume in a few months. It seems that no hostages (like the health care law) will be taken this time but the situation is set so hostages may be taken again in February. The extortion threat remains the same but now the ransom demand is the Democrats’ assurance that the so-called grand budget deal goes according to the House Tea Party caucus’ wishes:  cuts in Social Security and Medicare. This is unfortunate since the President and Senator Reid have clearly articulated that they wanted to end the hostage-taking, where either the government or the economy is a hostage. After all, the setup is to trade entitlement cuts, meaning unpopular reductions in Medicare (like raising the eligibility age) or in Social Security (cutting cost-of-living increases and/or raising the full retirement age), for revenue. That’s a tried and failed deal. So, if the President does not agree to Social Security and Medicare cuts there won’t be an increase in the debt ceiling? A government shutdown again? I wonder, is this setup meant to pressure the Tea Party into granting more revenue or is it meant to pressure Democrats into accepting Social Security and Medicare cuts they do not want or think are necessary?