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Monday, December 3, 2012

Lots of Breast Beating Over Fiscal Cliff Impasse

     The VSP are all painstakingly fretting about how there's no deal in sight and as Greg Sargent notes, many of them are again buying into the illusion that "both sides do it."

     So we hear about both sides being uncompromising:

     As the White House and Republican leaders enter the final month of negotiations to avoid a year-end “fiscal cliff,” both sides struck an uncompromising tone Sunday, as warnings mounted that they will be unable to forge an agreement to stop an automatic series of deep spending cuts and large tax hikes that could push the economy into recession.
Following private meetings last week, the senior negotiators for the White House and the Republicans took to the airwaves Sunday to accuse the other side of intransigence and to demand that the opposition concede on the central question of how much to raise taxes on the wealthy.

     “Right now, I would say we’re nowhere, period. We’re nowhere,” House Speaker John A. Boehner (R-Ohio) said on “Fox News Sunday.” Boehner added that the Republicans have offered a way to break the stalemate — by compromising on an overhaul of the tax code that would limit deductions that disproportionately benefit the rich.

      http://www.washingtonpost.com/business/economy/fiscal-cliff-talks-at-a-stalemate-over-tax-hikes/2012/12/02/1c31b98a-3cc6-11e2-bca3-aadc9b7e29c5_story.html?hpid=z1

      For the GOP to offer to close "loopholes" and limit deductions is not a compromise as they've been calling for that for 2 years and that's what Mitt Romney ran on. Sargent points out that one very big difference between the two sides right now is that the Democrats have offered a plan. Whether or not you think it's "serious"-Krugman defines "serious" as what causes the middle class and poor pain, while what' unserious is raising taxes on the rich-it's a clear plan that lays out what they plan to do in detail.

      For Krugman on what makes a plan serious please see

      http://krugman.blogs.nytimes.com/2012/12/01/what-defines-a-serious-deficit-proposal/

      The real game of the GOP is clear. Indeed, according to a Friday piece at Politico, the basic framework of a deal is already in place-in which the GOP will have to accept not just an increase in the top income tax rates but also the capital gains, dividends, and the inheritance tax.

      What seems to be happening is the Republicans are trying to save face. And they really want the Democrats to do their dirty work for them-they'd like to see the Dems recommend deep spending cuts. This is what all this complaining about no serious spending cuts comes from. For their part, the Democrats already gave the GOP over $1 trillion in spending cuts last Summer.

       I saw David Gregory on Meet the Press trying to dismiss this when Geithner pointed it out. His answer was 'Ok, but where is the Democrat pain in this plan, where do they give real spending cuts now."

      Why do the Democrats really have to take any further pain now as they've already done plenty in the past? The Republicans have never given in the past on taxes either. Isn't it their turn to compromise? And the Democrats aren't going to be stupid enough to let the GOP trick them into proposing unpopular spending cuts. That it seems to me is the main Republican hope.. Maybe the Dems will do their dirty work for them and take a political hit with the liberal base, etc.

      As E.J. Dionne says:

      " Dems should not get hoodwinked into proposing cuts first: E.J. Dionne makes that argument in his column this morning, and this captures the Republican strategy perfectly:
They seem to hope a deal will be born by way of immaculate conception, with Obama taking ownership of all the hard stuff while they innocently look on.
       http://www.washingtonpost.com/blogs/plum-line

       This is what the Republicans mean when they say Obama should "lead."

        So the holdup now is for the GOP to give us their own plan not becasue Obama is being unreasonable. My guess is that this deal necessarily has to wait till the 11th hour to go trhough-the GOP has to conivince the base that they fought a tough-though Quixotic-fight against higher taxes on the rich.


      

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