The PJ Tatler

Will Obama Consider Entitlement Reform in Fiscal Cliff Negotiations?

A former Democratic senator said he believes that President Obama might be willing to consider entitlement reform in his second term.

“I do think there is some reason to be cautiously optimistic here,” said Evan Bayh (D-Ind.) on Fox Business Network. “…I think the president having been re-elected will be more willing to take on entitlement reform. He doesn’t have to worry about offending his base so much.”

Bayh said Obama “will be interested in his legacy” — but will also be faced with the reality of the fiscal cliff, even if the plunge is averted in the short term.

“He has to get this done otherwise it just going to hang over everything the next four years,” said the former senator.

The Democrat also said it’s not necessary to forge an agreement with raising taxes on the wealthy, as Obama has indicated is his must-have in negotiations.

“Leaders like senator Schumer have already said he thinks it should be a million dollars. So, I think there is a lot of room for maneuver there,” Bayh said. “I think the harder part with regard to all that is treatment of dividends and capital gains. Now, clearly, Republicans want to have that treated in a way that fosters investment and growth. Democrats want to focus on equity for people who drive the vast majority of their income from passive sources like that. I think that is the harder issue.”

Sen. David Vitter (R-La.) said he believes the compromise is “pretty obvious.”

“It is a tax increase but embedded in tax reform with rates not going up but actually going down, and spending and entitlement reform,” he said. “It will simply not have the credibility, garner the attention without the president leading, that is number one. Number two, the reason he has to go first, is he really pulled back in all previous negotiations like when it fell apart about a year ago. So, Republicans need to be convinced that he is game for this and he is open to this obvious compromise.”

“He believes very much that broadly speaking, his plan is a good guide to how we can achieve a broader compromise,” White House spokesman Jay Carney told reporters today when asked about Obama and entitlement reform. “He also said very clearly that he is not wedded to every aspect of his plan, and that he understands that in order to reach an agreement, everyone needs to compromise, and that compromise should not be a dirty word in Washington.”

Perhaps sensing danger on their turf, the U.S. Senate Defending Social Security Caucus, led by Sen. Bernie Sanders (I-Vt.), will hold a summit Thursday to discuss legislative and grass-roots efforts to protect the status quo in entitlement programs.

“The idea of balancing the budget on the backs of some of the most vulnerable people in our country – the elderly, orphans, widows and disabled veterans – is not only morally grotesque, it is extremely bad economics,” Sanders said.