Saturday, December 1, 2012

Media Abuzz Over Imperiled Fiscal Talks

     I'm not at all sure, however, that this isn't just like when the media was all abuzz over Romneymentum that was going to carry Romney to victory back in October. The media does this sometimes-they all buy into a storyline and it becomes canonical though it has little to do with reality.

     So we keep hearing how the talks are in real trouble. Much of the media seems to fret that the President may have gone too far the other day in antagonizing the GOP by offering a plan rather than a compromise. As one GOPer scoffed, after two weeks the President just game them his budget. I mean he's supposed to negotiate with himself.

     Remember the 2011 debate. Obama asked for  50% revenue and 50% cuts. The GOP said no. Then it was 75% revenue and 25% cuts. The GOP again said no.

     Then it was 85% cuts and 15% revenue. The GOP said no way. During the GOP primary, Romney ruled out 90% cuts and 10% revenue.

      That's the way it's supposed to be done. How can the President be so irresponsible? A lot of this seems to be simple posturing. If Politico is to be believed the basic skeleton of a deal has been worked out for months and there is not much dobut that it will be made prior to the end of the year.

       So most of the talk is political positioning. The GOP knows it will have to sacrifice a lot on revenue-not just higher rates, but higher rates on dividends and capital gains, the end of carried interest deductions,  and a higher estate tax- wants to create the impression they are fighting hard. So maybe Boehner's alarmist talk about the talks hitting a wall is just showmanship.

       The one difference that clearly is genuine is the GOP's refusal to tell us what entitlement cuts they want. In meetings with the Democrats they have been telling the Dems "You first as you guys have the mandate." They dearly need the President to fall back into negotiating with himself again.

       Similarly they refuse to name any deductions they might want to close. Certainly they don't want to propose ending the mortgage interest deduction as it's so popular with the middle class.

        However, Obama is not going to fall for this again and by putting his plan out here in public, the GOP's lack of their own plan is becoming more glaring.  The claim that they have already told us their plan is just flat out false. We know they want to cloose loopholes rather than raise rates-but which ones? We know they favor cutting entitlements but which ones?

No comments:

Post a Comment