Thursday, December 20, 2012

Boehner's failure leaves Obama with all the leverage

By Michael J.W. Stickings

Two must-read posts from Jonathan Chait (with whom I disagree somewhat on what we should be willing to give up for a deal but who as usual is providing some of the soundest commentary on the current fiscal clusterfuck): 

-- Boehner's Plan B Fails; Inmates Running Asylum

-- House Republicans Again Show Why We Need to Wait Until January for a Deal

Basically, Boehner can't get a deal done, at least not a deal that is remotely acceptable to Democrats and that President Obama will sign, even though the president has put a lot on the table already that arouses the wrath of progressives (understandably, in my view) and event though there's no doubt a Republican-friendly deal could get done (if only they were prepared to allow modest tax increases on the rich).

House Republicans, many of whom clearly Boehner has lost, are even objecting to "Plan B," which would extend the Bush tax cuts all the way up to $1 million, much higher than the $250,000 Obama wants. And in so doing they're exposing once more just how self-destructively stupid they are:

What's amazing about this reaction is that Plan B is not really a legislative proposal but a tactical maneuver to increase Boehner's leverage. That is to say, even if Republicans find it substantively objectionable, they have no reason to oppose it since it is not designed to take effect. They opposed it anyway and have made little effort to hide their opposition. If Boehner can't rally his troops behind a negotiating ploy like this, there's no chance he can get them to support an actual deal Obama would sign.

And the conservative revolt shows something important: Boehner does not have control over his own caucus. Obama is trying to cut a deal with Boehner, and he may succeed, but in all likelihood such a "success" would lead to a reprise of the 2011 negotiations, when House Republicans threw the deal back in Boehner's face. Obama better be planning to negotiate something in January. 

Exactly. Screw them.

Polls show strong support for [the president's] position — 69 percent told Politico they favor raising taxes on incomes over $250,000 a year. Strong majorities also approve of Obama's handling of the fiscal cliff and disapprove of the Republicans'. Easy as it may be to insist politicians will win a fight if they stand firm for your position, in this case it's true: Obama is not going to lose this fight if he stands firm.

What all this shows, again, is how much easier a deal gets in January. Once the Bush tax cuts for the rich have expired, then Obama doesn't need to bargain for the revenue, and Republicans don't need to vote to "give" it to him. All Obama needs at that point is another couple hundred billion dollars in revenue, against which he is offering some $800 billion in cuts. 

Hopefully President Obama isn't too stupid to figure out just how much leverage he has to get what he wants without having to give up too much and pissing off progressives so soon after his re-election.

That means waiting until the new year, and so going over the "fiscal cliff," but that's a risk worth taking, first because there's no cliff, just a low-grade slope at most, second because he has public opinion overwhelmingly on his side, third because Republicans are in hopeless disarray, and fourth because, as Chait notes, it'll be easier to get a favorable deal done once the Bush tax cuts expire.

Surely he gets all this... right? 

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