Obama knows that the political battlefield is stacked against Republicans on the all-important issue of entitlement reform. The mishandling of Ryan’s Medicare plan is proving to be bad political medicine for many reasons, and the White House is in no hurry to help save the patient from a mess of their own making. Embittered Democrats also remember GOP candidates demagoguing Medicare in 2010 — and they are ready to return the favor next year.

The president was smart to talk about putting Medicare and Social Security on the table last week because he gambled that most Republicans wouldn’t be shrewd enough to call his bluff.

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He was right.

4. Most Republicans have no interest in serious tax reform.

What conservative with any grasp on political reality really believes that lowering tax rates is realistic in 2011? With most public polls showing a majority of Americans supporting higher taxes for millionaires, there is no chance in hell that a Democratic president and a Democratic Senate will lower income tax rates, even if loopholes are closed.

If the Republicans want to reform a tax system that allows a billionaire like Warren Buffett to pay lower tax rates than his secretary, then the trade-off seems pretty obvious. Republicans should close $1 trillion in tax loopholes in exchange for spending cuts totaling $3 trillion.

If the GOP were willing to do that, it could take credit for shaving a cool $4 trillion off America’s debt without surrendering the Bush tax cuts. But Republicans are not interested in that kind of tax reform. So for the foreseeable future, it looks like some of America’s largest corporations will continue to pay absolutely nothing in taxes.

Good luck selling that to independent voters.



5. The Democratic president wants to keep Wall Street happy.

Be assured that a deal will be made to raise the debt ceiling in a way that will not cause heartburn on Wall Street. After all, Obama has raised more money from the financial community than any other politician in U.S. history. So even after all the whining and moaning, Wall Street will always get what it wants from Obama. If you don’t believe me, give Elizabeth Warren a call.

6. Republican leaders want to keep Wall Street happy.

Do I even have to explain? Didn’t think so.