In private budget negotiations earlier this year with House Speaker John Boehner (R-OH), President Obama entertained the same idea -- a slow increase in the Medicare retirement age -- provided Boehner find votes for over $1 trillion in new revenues. The discussions quickly fell apart.
The proposal infuriates progressives, and other defenders of single-payer Medicare, who note that the proposal is regressive -- hitting elderly minorities and poor people who have lower life expectancies hardest -- and shifts costs on to seniors, states, employers, and other federal programs. And it doesn't save much money.
Bowles included the proposal in a rough proposal he laid out for committee members that, combined with the cuts Congress has already passed, would total $3.9 trillion in deficit reduction.
"If you look at where I understand the two sides now stand...You all are between $250 and $400 billion in additional cuts on discretionary, so I assumed that we could reach a compromise of an additional $300 billion discretionary spending cuts," Bowles said. "On health care you are somewhere between $500 and $750 billion of additional health care cuts. I assume we can get to $600 and I got there by increases in the eligibility age for Medicare.... On other mandatory cuts you're somewhere between $250 and $400, so I settled on $300 there."
Bowles also proposed $200 billion in savings by changing the way the government calculates inflation to a less generous measure called chained CPI. That would reduce seniors' Cost of Living Adjustments under Social Security, among other government benefit cuts, and provide the Treasury new revenue by slowing the rate at which tax brackets rise. That would push workers into higher brackets sooner as they climb the income latter -- a de facto tax increase over time.
For Democrats, he asked Republicans to accept $800 billion in new tax revenues.
Add in $400 billion in 10-year savings on interest payments on the debt, and over $1.3 trillion in 10-year savings from cuts Congress has already passed, and that adds up to $3.9 trillion.
If you think this is an offer Republicans couldn't possibly refuse, think again. Committee co-chair, Rep. Jeb Hensarling (R-TX) cautioned Bowles in his closing remarks, "You've certainly created some excitement for the press I think. I would say don't necessarily believe everything you read and hear about the proceedings of this committee."