Meet the "Pea Party".

In a news conference last week, President Obama, in a style far more mild than that of Rick Santelli, called on both sides in congressional negotiations to raise the debt ceiling to compromise in a deficit reduction plan: "Pull off the band-aid. Eat our peas." Without intending to, Obama gave a name to a movement that to date had been without one: the Pea Party.

What I am calling the Pea Party has been around for decades, of course. Paul Krugman has described this coalition as the "austerians." It consists of the public figures who have claimed for decades that budget deficits and the national debt, rather than other problems like insufficient innovation or inadequate middle-class wages, are the greatest threat to the future of the country. For decades, too, members of the Pea Party have insisted that we can no longer afford Social Security and Medicare for middle-class retirees. Since the Great Recession began, many members of this group have argued absurdly that a program of austerity, which further contracts demand in the economy, is the best cure for a near-depression caused by a lack of demand.

Bob and I have had a running debate now for about a year about how do we, in fact, deal with the losers in a globalized economy. There has been a tendency in the past for us to say, well, look, we have got to grow the pie, and we will retrain those who need retraining.

..."....Just remember, as we move forward, that there are real consequences to the work that is being done here. There are people in places like Decatur, Illinois, or Galesburg,Illinois, who have seen their jobs eliminated. They have lost their health care. They have lost their retirement security. They don't have a clear sense of how their children will succeed in the same way that they succeeded. They believe that this may be the first generation in which their children do worse than they do. ome of that, then, will end up manifesting itself in the sort of nativist sentiment, protectionism, and anti-immigration sentiment that we are debating here in Washington. So there are real consequences to the work that is being done here. This is not a bloodless process.

Hamiltonian Democrats

Among the provisions Obama to which Obama had said yes, according to a senior administration official, were the following:

Medicare: Raising the eligibility age, imposing higher premiums for upper income beneficiaries, changing the cost-sharing structure, and shifting Medigap insurance in ways that would likely reduce first-dollar coverage. This was to generate about $250 billion in ten-year savings. This was virtually identical to what Boehner offered.

Medicaid: Significant reductions in the federal contribution along with changes in taxes on providers, resulting in lower spending that would likely curb eligibility or benefits. This was to yield about $110 billion in savings. Boehner had sought more: About $140 billion. But that’s the kind of gap ongoing negotiation could close.

Social Security: Changing the formula for calculating cost-of-living increases in order to reduce future payouts. The idea was to close the long-term solvency gap by one-third, although it likely would have taken more than just this one reform to produce enough savings for that.

Paul Krugman...What Obama Was Willing to Give Away ("Horrifying")