Let’s talk about the strategy for the negotiations now going on, or not going on. The good and bad points of the proposal can go someplace else, I’m only interested in the gamesmanship.
An article in the Times last week said that Obama was frustrated by the experience of his first term, where he started by proposing some things he thought the Republicans would want and got nowhere. This time he is trying to force them to make a proposal by just reiterating previously made proposals. Krugman for once liked this strategy.
I can see his areas of strength. One, he won the election and does not have to worry about being re-elected. Two, there is significant voter support for increasing taxes for those making over $250K. Three, he has a great soundbite - the Republicans are going to drive the economy into a ditch for their rich friends. Polls indicate that the public would blame the Republicans if we went over the cliff.
I’m guessing we’ll get a resolution very close to 1/1 - or maybe at 12:01 am 1/1, so the Republicans will only have to vote for a tax decrease not a tax hike.
I’d be interested in hearing thoughts about Boehner’s strategy.
The GOP has already lost this fight, and judging from more recent comments they are beginning to realize it. Now it’s all about getting from here (a losing position) to the next fight on better ground (say, the next debt ceiling fight) without pissing off their base too much or losing too much leverage.
They won’t get anything on SS or Medicare. They may be able to get a slightly smaller rate hike on the top two brackets, or perhaps some change to the investment income rates. They may be able to get some changes to the sequestration cuts. They’d love to have some bit of middle-class taxation to hold on to as leverage - perhaps the payroll tax cut extension will be that, or some sort of stimulus, but I kind of doubt it.
But the problems for Boehner are daunting. Democrats in general mind the cliff far less than the GOP (because they like the higher rates and because the public seems to be willing to blame the GOP if talks fail). And he can’t even bring his caucus to the table on a compromise (witness his attempts to solidify support by axing some of the more rambunctious of his caucus from committee seats).
The GOP has two choices - a really big tax hike or a smaller tax hike. Which one do you think they will choose?
I agree with the prior post, although I would add another reason the Democrats are less averse to the fiscal cliff than the GOP - it aligns more closely with Democratic priorities than Republican ones. Not sure why the GOP agreed to those terms to begin with, unless they simply didn’t contemplate that the Democrats would be willing to go over it, which was a mistake.
It does seem that the GOP is looking to shift to a showdown over the debt ceiling, which is why Obama is trying to eliminate that at the same time. I would not be surprised if the debt ceiling was itself offered as a chip in these negotations. (I doubt if the Republicans would agree to eliminate it entirely, but they could agree to extend it now as part of the deal.)
Well, there’s really two possibilities on the Republican side;
A. They really are that retarded and they’re so blind by ideology and their idiotic pledge and all that, and are unable to see that they are not voting for any actual tax increase, it’s going to happen without a vote, or
B. The leadership is playing the base like a fiddle, stalling and spinning up derp for their consumption, waiting for the cuts to expire when they can make a real deal.
I’m thinking A is the truth, since they’ve shown no indication of being “reality based” and I don’t seriously think the derp fest about not raising taxes on the rich even if they have to destroy the middle class to do it is going to stop just because the cuts expire.
Well, lots of members are as stupid as you give them credit for, but Boehner just fired two Tea Partiers from the Finance Committee, which seems to indicate he knows that he is going to have to make a deal they won’t like. So that is encouraging.
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Of course, I wonder if it would win them any points with businesses, who would have to live with financial insecurity from now until 1/1.
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Probably why Obama has been inviting business leaders to the White House - so they know the uncertainty is not his fault. And to give them a way of getting back into his good graces after they backed the wrong horse in the election.
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Let’s talk about the strategy for the negotiations now going on, or not going on. The good and bad points of the proposal can go someplace else, I’m only interested in the gamesmanship.
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Obama, Reid, Pelosi, Boehner, and McConnell will continue to meet and negotiate among themselves. After the respective party bases in the House hate the negotiated compromises, there will be more dog & pony show in media interviews, i.e. finger pointing and blaming the other side for backing away from bargaining table. I foresee brinksmanship all the way until the real rodeo.
Both A and B are true. I think A is true for the majority of Republicans in the House and B is true for the GOP leadership and the few comparatively moderate Republicans.
I don’t see why what problem that solves. They could just vote for the middle-class tax cut today and then let the high-end tax cuts lapse in January. There’s no advantage to waiting till 1/1/13.
I’m kinda sceptical the GOP will try to hold the debt ceiling hostage again. They’ve tried that tactic twice on Presidents that were up for re-election, and in neither case did it really work out for them. Now they have a President that doesn’t have to worry about re-election, which seems like it would make it even a worse idea to engage in a game of chicken with him. I think they’ll just take a few face-saving symbolic concessions from Obama and raise it without letting it come down to the wire again.
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I’m guessing we’ll get a resolution very close to 1/1 - or maybe at 12:01 am 1/1, so the Republicans will only have to vote for a tax decrease not a tax hike.
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I don’t see why what problem that solves. They could just vote for the middle-class tax cut today and then let the high-end tax cuts lapse in January. There’s no advantage to waiting till 1/1/13.
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I suppose the ‘logic’ is that the GOP doesn’t want to raise taxes on high earners, job creators, and the right wing the donor base without a fight. Also, if the marginal tax rates increase automatically on 1/1/13, then our elected leaders can cut those new rates and therefore not violate any pledge to never raise taxes on anyone. Businesses’ and markets’ collective confidence be damned, there is ideological purity at stake.
I agree with all that. I just don’t see why anything about it changes if they wait to come to agreement. They could just pass the middleclass tax cuts now, and say it starts effecting rates on the first.
I doubt most businesses would do anything significantly over the nect two or three weeks because of uncertainty about a two percent change in marginal rates.
No, but I know quite a few businesses that are doing things differently than they otherwise would because of a jump in the dividend income rate from 15% to over 40%.
And of course many business would love some clarity about the sequestration part of the fiscal cliff - defense contractors in particular.
You’re probably right that at this point it’s probably too late to change courses of actions for either group.
From negotiations I’ve seen, if you don’t wait until the last minute people on your side will accuse you of giving in too easily and leaving money on the table, as it were. Sure it makes sense to extend the middle class tax cuts now, but that will remove a major point of leverage for the Republicans - being able to accuse Obama of increasing taxes for the middle class. That affects more people immediately than the spending cuts.
If they get enough Republicans to pass this that will show that the Republican bloc is falling apart.
While not precisely strategy regarding the Cliff, there was a rather enjoyable bit of strategic blundering by Senate Minority Leader Mitch McConnell, who ended up having to filibuster his own debt ceiling bill, after being outmaneuvered by Harry Reid.
Open for debate: could these clowns look any worse?