WASHINGTON -- After bailing out a global financial crisis, enacting a series of major tax cuts for the wealthy and waging two unpaid-for wars, the U.S. government is some $16 trillion in debt. Now, in exchange for paying off a bit of that debt by returning some of the tax rates to their previous levels, Democrats have offered, in a series of high-profile negotiations, to slash trillions in spending, much of it hitting the elderly, the poor and the middle class. This process of transferring wealth up the economic ladder is known in Washington as a "grand bargain."
With the election over, Democrats and Republicans will soon be back at the negotiating table, driven there by the so-called "fiscal cliff" -- the moment in January 2013 when the Bush-era tax cuts expire and automatic cuts to defense and social programs take effect.
In order to avoid this scenario, President Barack Obama is proposing a grand bargain that would reduce the deficit by $4 trillion over 10 years, relying on a 3-to-1 mix of spending cuts and revenue increases.
Republicans, meanwhile, have rejected including new taxes, but are open to negotiations. What exactly will be on the table when the two sides sit down? Surprisingly, we can predict with a high degree of certainty just which programs will come under attack. A raft of articles and books have been written about last year's series of failed deficit negotiations, most importantly Bob Woodward's "The Price of Politics" and David Corn's "Showdown," offering a roadmap of where the talks are most likely headed.
Last year's talks demonstrated just how little fat the federal government could trim away from its budget before impacting the services and benefits it provides. All in all, Republicans and Democrats found only $40 billion that they agreed could be saved by targeting waste and fraud in government operations.
To make a real impact on the deficit, agricultural subsidies and oil and gas giveaways may also face the chopping block now. But more than anything, lawmakers will likely target Social Security, Medicare, Medicaid and a host of other social programs that help those with the fewest advocates in Washington, including people on food stamps, veterans, retiring federal workers, home health care workers and the elderly.