Thursday, December 20, 2012

A few facts on the "fiscal cliff" negotiations (updated)

Things are getting a little confusing on the so-called "fiscal cliff" negotiations. And with all the screaming from the poutragers, it can be hard to understand what's going on. So I thought I'd summarize the latest actions in bullet points to see if it helps clarify.
  • The first thing to notice is that Speaker Boehner made some big concessions from the Republican position. First of all, he opened the door on the extension of tax cuts. His proposal would extend them for income less than $1 million (Obama wants them extended for income less than $250,000). But the really BIG concession was an extension of the debt ceiling for one or two years. That would give away the leverage Republicans were counting on in the coming months. BFD!
  • Because Boehner made these concessions, it was incumbent on Obama to do so as well. If he hadn't, he'd be putting himself and the Democrats in the position of being blamed when we went off the "cliff" by being intransigent. That's why he made the counter-offer of extending the tax cuts for income less than $400,000 and adopting the "chained CPI" method of measuring inflation. 
  • No one of the left truly embraces the chained CPI. But people as knowledgable as the Center on Budget and Policy Priorities and Jared Bernstein suggest that the conditions the White House was demanding to include would mitigate its effects on vulnerable elderly who are dependent on Social Security. The Republicans were demanding 2 things be included on the spending cuts side of this negotiation - raising the Medicare eligibility age and chained CPI (which affects more than Social Security). Of the two, its clear that Obama agreed with many liberal economists that the latter was the least objectionable alternative. 
  • What is perhaps the most important point to notice here however, is that when Boehner and Obama got within striking distance of a deal, Boehner walked away. Ultimately - as President Obama noted yesterday in his press conference - he couldn't sell it to the Republican caucus in the House. As Michael Tomasky  explains, Boehner's angry 50 second press conference yesterday was no match for the President's appeal to common sense compromise. But Boehner's speakership is on the line on Jan. 3rd. And that's his biggest concern right now. 
  • Today Speaker Boehner will attempt to have the House pass his "Plan B" bill which would ONLY extend the tax cuts for income under $1 million (nothing on the defense or domestic cuts coming Jan. 1st). Its unclear whether or not he can garner his troops to even do that - what with organizations like the Heritage Foundation and the Club for Growth urging a "no" vote. The Senate certainly won't pass that one and President Obama has promised to veto it if they did. Brian Beutler does a good job of explaining Boehner's options when it fails: "To his right, there’ll be the fiscal cliff, and to his left there’ll be Obama’s outstretched hand." Since his caucus won't allow him to reach for that outstretched hand, I'd suggest that its "fiscal cliff - here we come." That folks, is what the beast in its death throes looks like. 
UPDATE: Steve Benen does a good job of describing the untenable position Boehner is in. And yesterday, I'm sorry to say that one of my favorite writers - p m carpenter - joined the poutrage club. But today, when its clear what's actually going on here, he resorts once again to calling President Obama "lucky." We've been there before. It wasn't true then, and its not true now. STOP IT!

11 comments:

  1. Keep in mind that "poutrage" is a necessary factor in this game. Protest from the left probably moved Obama off raising the Medicare eligibility age.

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    1. He was never going to raise the Medicare age. He doesn't listen to the poutragers. Raising the Medicare age doesn't save enough money to make it worth it. Plus he's holding all the cards in this negotiation. The Medicare age was a non-starter from the get-go.

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    2. I believe the 'left' underestimates their own influence. Better for the 'left' to understand negotiation tactics.

      ebogan63

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  2. ASP, at least to me, protest and "poutrage" are not the same thing. "Poutrage", for example, would be more along the lines of seeing compromise, which tends to be how, in a two party system, governing would be done, as "caving". It's wanting, in this case, everything that the Left wants (i.e. - "kill the bill" when there wasn't a Public Option inclusion in the ACA), not getting it and saying, therefore, that PBO is a lousy negotiator.

    Or, in this case, we have NO IDEA, if a final deal is even reached, what actually will be in it, but: "Obama doesn't understand his opposition" chants (which we've heard continually over the course of his Presidency) are cranking up.

    Ms. Pants will, most assuredly, correct me if I'm rong, but this approach is just SERIOUSly annoying.

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  3. You're right Blackman.

    How I see it is that it is our job as citizens to speak to policies we object to. Those who were simply saying that they oppose the raise in the age for Medicare eligibility (or chained CPI) are doing their job. And since those are items the Republicans are pushing for - our disagreement is best directed at them (I've seen some of the big unions be very adept at that lately).

    But when they house that opposition in talk about how Obama "caved" or is "naive" or "sold us out" - they simply weaken his hand and contribute to making matters even worse (ie, 2010 elections).

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    1. I would rather when people speak to policies that are objectionable, they use logic, facts, and stats so as not to appear uniformed. Emotionally overwrought shouty tweets w/o the above do your cause no particular favors.

      ebogan63

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  4. And as I say in my piece on TPV, what Obama has done, yet again, is show up the GOP as unable to govern. That doesn't bode well for the next 2 years, but does put the Dems in a strong position for 2014.

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    1. Wonder why Emprogs cant accept that even now he is working on 2014? He mentioned it yesterday, that some of them came from districts he won-hint, hint! Do not ever play this man cheap>>Period! That is what TanMan keeps doing and he keeps losing.
      Smilingl8dy

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  5. Sometimes Obama is lucky (i.e., Sandy); but, in negotiations like these, luck has NOTHING to do with it.

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  6. I still don't see how validating this strategy of holding the US economy hostage by treating it like a major, 'BFD' concession is anything to celebrate. How do you move forward in ANY future negotiations if you've accepted at face value the Republican threat to destroy the economy? You don't get to hijack the political process with absurd threats! I guess this is just 21st century politics: convince everyone you truly are dangerously insane enough to see these games of 'chicken' through to the end.

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    1. That's why PBO is insisting that he won't negotiate over the debt ceiling.

      I think there are 2 reasons why he did it last time:

      1. The economy was still really shaky
      2. He thought he could get a "grand bargain." I wouldn't be surprised if he now thinks that was a mistake. But you live and learn.

      In the end though, as long as Republicans are the majority in the House, the president will be forced to negotiate with them.

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