Tea-Publicans are negotiating the ‘cliff’ in bad faith

Posted by AzBlueMeanie:

The political party that regularly takes America hostage and threatens to kill its economy (and jobs) unless Americans give their wealthy elite plutocrat masters everything they demand only knows one way, the bad faith way.

Some of the behind the scenes "cliff" negotiations were reported today in a POLITICO piece by Beltway media villagers and GOP spinmeisters VandeHei and Allen, Inside the talks: Fiscal framework emerges:

Acapulco_Cliff_nealCut through the fog,
and here’s what to expect: Taxes will go up just shy of $1.2 trillion
the middle ground of what President Barack Obama wants and what
Republicans say they could stomach. Entitlement programs,
mainly Medicare, will be cut by no less than $400 billion
— and perhaps
a lot more, to get Republicans to swallow those tax hikes. There will
be at least $1.2 trillion in spending cuts and “war savings.”
And any
final deal will come not by a group effort but in a private deal between
two men: Obama and House Speaker John Boehner (R-Ohio). The two men had
a 30-minute phone conversation Wednesday night  — but the private lines
of communications remain very much open.

* * *

There is no chance
taxes are not going up for people making north of $250,000 — and
virtually no chance that doesn’t include their tax rates, too.

Republicans publicly say they are opposed to rate hikes — but
privately they know they are going up, if not all the way to the
Clinton-era 39.6 percent, then darn close.

The reason is simple math. Take a look at this list, and you will see that any tax loopholes worth closing won’t get Obama or Republicans close to their targets.

So what does the final
tax hike look like? That will take a while to hash out, but those
involved guess it will include a rate hike, higher taxes on carried
interest and probably capital gains and dividends, and either a cap on
total deductions for rich people or some form of a minimum tax rate for
them
.

There is only one
way to make the medicine of tax hikes go down easier for Republicans:
specific cuts to entitlement spending. Democrats involved in the process
said the chest-pounding by liberals is just that — they know they will
ultimately cave and trim entitlements to get a deal done.

A top Democratic official said talks have stalled on this question
since Obama and congressional leaders had their friendly-looking
post-election session at the White House. “Republicans want the
president to own the whole offer upfront, on both the entitlement and
the revenue side
, and that’s not going to happen because the president
is not going to negotiate with himself,” the official said.

Here is where some POLITICO decoding is necessary. Ezra Klein explains, The GOP’s Medicare confusion:

The austerity crisis talks have hit a peculiar impasse.
The problem isn’t, as most analysts expected, taxes, where Republicans
seem increasingly resigned to new revenue. It’s Medicare. And the
particular Medicare problem isn’t that Democrats are refusing the GOP’s
proposed Medicare cuts. It’s that Republicans are refusing to name their
Medicare cuts.

* * *

If nothing else, Republicans are respectful of Medicare’s political
potency. Recall that a core Republican message in both the 2010 and 2012
elections was that Democrats, through Obamacare, were cutting Medicare
too much. Republicans, already concerned about their brand, don’t want
to rebrand themselves as the party of Medicare cuts
.

But it’s partly policy, too. The fact is that short of converting the
program to a premium support system — a non-starter after they lost the
2012 election
— Republicans simply don’t know what they want to do on
Medicare.

Scour the various outlets for Democratic policy ideas and you’ll find plenty of proposed Medicare cuts. President Obama’s 2013 budget,
for instance, includes hundreds of billions in Medicare cuts (see pages
33-37), and caps the program’s long-term growth at GDP+0.5 percent
.

* * *

That’s left Republicans in a peculiar negotiating position: They know
they want “Medicare reform” — indeed, they frequently identify Medicare
reform as the key to their support for a deal — but aside from [Paul Ryan's] premium
support [rejected by voters], they don’t quite know what they mean by it, and they’re afraid
to find out. 

The solution they’ve come up with, such as it is, is to insist that
the Obama administration needs to be the one to propose Medicare
cuts.
 “We accepted this meeting with the expectation that the White
House team will bring a specific plan for real spending cuts — because
spending cuts that Washington Democrats will accept is what is missing
from the balanced approach that the president says he wants,” Boehner
spokesman Michael Steel said in regard to the most recent round of
talks.

Democrats find this flatly ridiculous: Given that the Obama
administration would happily raise taxes without cutting Medicare but
that Republicans will only raise taxes if we cut Medicare, it falls on
the Republicans to name their price. But behind their negotiating
posture is a troubling policy reality: They don’t know what that price
is
.

Greg Sargent summarizes the impasse in two sentences at the Plumline:

1) Democrats are willing to agree to hundreds of billions of dollars in Medicare cuts.

2) Republicans are not willing to agree to one penny in higher tax rates from the wealthy.

[Again, Tea-Publicans want the White House to lay down its bottom line on both the revenue and the entitlement cut side, so they don’t have to come forward with any concrete demands for entitlement cuts — Romney-Ryan 2.0.]

Does this mean that Dems shouldn’t be expected to make more
concessions than they already have? No, it doesn’t. Obama has already
proposed a budget that contains around $340 billion in Medicare cuts
,
but as Politico reports in its overview of the talks this morning,
Dems are likely going to have to put more on the table to secure a
deal. The left has drawn a sharp line against any cuts that result in
higher costs for beneficiaries, as opposed to targeting providers
, and I
hope that the final deal doesn’t hit middle or low income
beneficiaries. But it does seem likely Dems will ultimately decide they
have to agree to some concessions the base won’t like.

There is no equivalence between the Democratic and Republican sides,
however. The GOP has not given an inch when it comes to the core
question of whether tax rates on the rich will go up.
Yes, Republicans
have agreed to new revenues from the wealthy via closing loopholes and
deductions. But many experts believe the math simply can’t be made to
work without a rise in high end rates, and this was perhaps the central
issue in the election that Obama just won decisively. The contrast is
simple: Dems have given ground on the need for Medicare cuts
— even if
you think they haven’t given enough ground, they have given some ground. But Republicans have not given any ground on the central concession they will have to make for a deal to be possible.

That still remains the main obstacle here, and any account that doesn’t make that crystal clear is simply misleading people.

* * *

I should also add that on top of the Medicare cuts they’re willing to
accept, Democrats already voted into law over $1 trillion in spending
cuts during Obama’s first term
. By contrast, Republicans have yet to
make a single concession on tax rates
.

As Sargent concludes, "If Republicans don’t think the White House’s proposed cuts are enough,
that’s fine, but [the onus] should be on them to say what they want." Instead, Tea-Publicans are negotiating in bad faith.

It appears this bad faith is centered around the GOP's alleged boy genius, Ayn Rand fanboy Paul Ryan, the most recent losing vice presidential candidate who will never be president, who harbors fantasies of becoming the next losing GOP nominee in 2016. From POLITICO:

People who have
talked privately with the top three House Republican leaders — Boehner,
House Majority Leader Eric Cantor (R-Va.) and House Majority Whip Kevin
McCarthy (R-Calif.) — say they recognize that Obama holds the high
cards, and that the public is likely to blame Republicans if
negotiations blow up and the new year brings a fiscal disaster. Ryan,
back at the Capitol after spending the fall on the road as Mitt Romney’s
running mate, is said to be resisting concessions that the others
consider inevitable.

Ryan, who is considering a run for president, will ultimately have to
decide if he wants to be party to a deal — or if he wants to be the
public leader of the resistance.

Ed Kilgore at the Political Animal blog sums it up nicely. Tough Spot For the Saviors of Medicare:

Truth is the Ryan Budget was and remains the sum and substance of GOP domestic policy preferences. That ain’t happening, a circumstance that flushes years of Republican prevarications and evasions and euphemisms and back-loaded, under-handed assaults on the New Deal/Great Society safety net. So now they are relying on Democrats to propose “entitlement reforms” they can then reluctantly accept as a price for also accepting revenue increases. I can’t imagine why they for a moment think Obama or congressional Democrats owe them the courtesy of doing their dirty work for them. But that’s where they are until such time as they are forced to acknowledge their whole “we’re saving Medicare” rap was as deep and authentic as Sarah Palin’s “death panel” posts at Facebook.

UPDATE: The New York Times editorializes today that there is no reason for the final deal to hit low income beneficiaries with higher costs. The Washington Post has also noted that Medicare can be cut in a progressive way.

0 responses to “Tea-Publicans are negotiating the ‘cliff’ in bad faith

  1. A “growing economy,” yes. Our economy is not growing due to wealth hoarding at the very top — these are not job creators. The investor class invests in quick profits in casino capitalism speculative investments. They no longer take a long view investing in brick and mortar businesses creating or selling products and hiring workers. We have the greatest wealth disparity in the history of this country right now. See, Corporate Profits Hit Record High While Worker Wages Hit Record Low, http://thinkprogress.org/economy/2012/12/03/1270541/corporate-profits-wages-record/

    When wealth is concentrated in the hands of a very few wealthy privileged plutocrats competing to see who can amass the greatest fortune, it takes money out of the economy, which causes economic stagnation and high unemployment. When that wealth is redistributed through modest confiscatory taxes on the wealthy privileged plutocrats and modest government spending on infrastructure, education and the working class e.g., social insurance programs that those workers paid into during their lives and earned (social security and Medicare are not “entitlements” as the right has disparagingly redefined it), the economy grows and jobs are created. That is how America built the strongest middle class in the world post World War II.

    Government is nothing at all like personal finances, that is one of the great falsehoods of political debate. Governments have the power to borrow money and to expand the money supply by printing money to encourage economic activity through monetary policy.

    A “free market” economy exists only in the fantasy world of Ayn Rand acolytes. Every country in the world has a “mixed” economy to some degree. There is no pure free market economy, nor is there a pure socialist or communist economy.

  2. Anyone who thinks simply taxing the rich solves the problem isn’t looking at the data, entitlement spending including “affordable care” is simply unsustainable. And no different than personal checkbook you can’t keep spending endlessly and the wealth that people want to redistribute must first be created and that only happens in a free market growing economy.