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"Modest Adjustments," Trillions Saved?

[Guest post by Alex Klein]

The president's press conference didn't contain any major new revelations on the debt ceiling; POTUS didn't accept a deal, propose a new one, or threaten to resign. But commenting on the Balanced Budget Amendment, Obama did dangle something interesting about Medicare and Medicaid. Counter Ryan and Coburn-Lieberman, Obama said "we don't have to do anything radical" — like benefit cuts — in order to fix the programs. Rather than "gut" them, Obama proposed "modest adjustments [which could] save trillions."

"It turns out that making some modest modifications in those entitlements can save you trillions of dollars."

If he's talking about the "Biden framework" for cuts here, the math looks a bit fuzzy. Is the "trillions" number part of the 1.1 trillion total cut already outlined in Obama's 2012 budget? That seems a bit of a stretch. And according to the Cantor slides, Biden plan discretionary cuts to health programs only amount to $350 billion. 

So, if Obama is still married to "modest adjustments" that "save trillions" on Medicare, that means the Grand Bargain is very much still in play. This would imply, as usual, means testing and a new benefit structure. But importantly, and much to the woe of Jonathan Cohn, it would also have to mean a "modest adjustment" to the Medicare age. So although the president dodged a direct question about raising the eligibility age, the imperative is still very much present in his rhetoric. The president is sending smoke signals about an age raise, whether he realizes it or not.