Free Markets, Free People

negotiations


“Fiscal Cliff” negotiations with Democrats? Gimme the usual please …

When is the GOP (and the public) going to learn?

How many times have we heard that the only thing standing in the way of a grand bargain to reduce our growing national debt is Republican intransigence on taxes? If Republicans would only agree to dump Grover Norquist, Democrats will agree to cut spending and reform entitlements. Then, we can all join hands and sing Kumbaya as we usher in a new era of compromise and fiscal responsibility.

Except that now that Republicans have agreed to raise taxes, er, revenue, as part of an agreement to avoid the looming fiscal cliff, liberals appear to have decided that there really isn’t a need to cut spending after all.

Yup, in fact they’ve taken entitlement reform “off the table”.

Senate Democratic leaders signaled Tuesday they would not agree to any entitlement reforms before the end of the year that cut spending on Medicare and Medicaid beneficiaries.

They also said that any year-end deal to avoid the expiration of tax cuts and implementation of spending cuts — known as the fiscal cliff — must include a provision to raise the debt ceiling, which would otherwise have to be addressed early next year.

The White House and Reid have indicated they will not consider cuts to Social Security, a notable change from 2011, when President Obama said “everything is on the table,” including entitlement programs dear to his party’s base.

In other words, we’re back to “tax the rich”, raise the debt ceiling and spend, spend spend.  Meanwhile, it is left up to the GOP to “compromise” by breaking the tax pledge (led by the Judas goats, Saxby Chambliss and Lindsey Graham) or be forever branded as the intransigent “bad guys” in this.

Meanwhile, low information Americans who, by over 60% approve of taxing the rich, will buy the spin by the press painting the GOP as the cause/reason for the calamity while Democrats “lament” the problem (“but, hey, that’s now the law thanks to Republicans”) and gleefully rub their hands in delight at all the new revenue they’ll have to “redistribute”.

Some things never change, do they?

~McQ


The “deal”

The so-called “Budget Control Act of 2011” (assuming both the GOP and Dem caucuses in Congress agree) has the following provisions per Katie Pavlich at Townhall:

    * More than $900 billion in deficit reduction over 10 years through discretionary spending caps . $350 billion of that comes from the Pentagon;

    * Debt limit increased by at least $2.1 trillion — through 2013…see below for more on how that happens;

    * Bipartisan super-committee is tasked with finding $1.5 trillion in deficit reduction by November 23 presumably through tax and entitlement reform. There will be 12 members of the super-committee. House Speaker John Boehner, R-Ohio, House Minority Leader Nancy Pelosi, D-Calif., Senate Majority Leader Harry Reid, D-Nev., and Senate Minority Leader Mitch McConnell, R-Ky., each get to pick three members;

    * Congress must vote on recommendations made by the bipartisan Congressional deficit reduction committee by December 23;

    * If Congress fails to pass the committee proposal, triggers are enacted that spur at least $1.2 trillion in cuts and those will be close to 50/50 split between domestic/defense spending. But the triggers exempt cuts to Social Security, Medicare beneficiaries and low income programs. The cuts will take effect on January 2, 2013.

So over a third comes from the Pentagon with the remaining two thirds or just less than $600 billion from other discretionary spending.  You can ensure that Democratic politicians will try to frame that as granny being pushed over the cliff.

Also note what the “trigger” exempts.   As noted then, over 50% or $600 billion in cuts would come from the Pentagon budget and the rest from other discretionary spending.  No mandatory spending is touched.  That means they can’t use the “I don’t know if [name of favorite government redistribution program here] checks will go out this month” scare tactic.  But it also means no serious work will be done on the programs that are killing us – the entitlements.  It also means almost a trillion dollars in cuts in defense spending if Congress doesn’t act before December 23 of this year. 

Assuming both houses of Congress pass this and Obama signs it, how does it work?

* Immediately after passage of this bill, the president certifies the US government is within $100 billion of hitting the debt ceiling and is given authority to raise the debt ceiling by $400 billion.

    * That also triggers a request to increase the debt ceiling by $500 billion — with a process in which Congress can vote to disapprove. The expected outcome: the president vetoes the disapproval, Congress fails to override the veto, and the President is given the authority to raise the debt ceiling by $500 billion.

    * The second tranche comes in December. If the super-committee fails to produce a path to reduce the deficit by $1.5 trillion, or Congress fails to pass it, the president makes a request for the authority to raise the debt ceiling by $1.2 trillion. Congress votes to disapprove, the president vetoes it, Congress fails to over-ride the veto, he gets the authority to raise the debt ceiling by $1.2 trillion.

    * OR the super-committee succeeds in finding anywhere between $1.2 trillion and $1.5 trillion in deficit reduction and Congress passes it. The president automatically is given the authority to raise the debt ceiling by an equal amount, with no disapproval process.

In the previous cite you saw the make up of the “Super Committee”.  Can you really imagine them coming up with all those cuts?  My guess is many will be of the Harry Reid variety, where he counted future war spending that we weren’t going to spend.

Also look at the process of raising the debt ceiling.   Obama must veto any Congressional disapproval.  In a political sense that’s almost as good as having a short term debt ceiling increase to feature during the re-election campaign, because that’s going to come up more than once.

Boehner issued a slide show to put out the GOP’s side of the argument for what they got.  One thing not mentioned in Pavlich’s summary is the fact that the bill requires a vote in both the House and Senate on a Balanced Budget Amendment.  I’ll just be the first among many to declare that DOA.

Meanwhile the spinmeisters for the President have been busy this morning.   More on the politics of all this and reactions in a later post.

~McQ

Twitter: @McQandO


Who owns the narrative concerning the debt ceiling fight?

As we watch the political theater that are these debt limit negotiations (and yes, I know the seriousness of all this, but this is political theater), it is interesting to watch the narratives being developed.   On the left, the narrative they’re trying to push is the GOP is a bunch of intractable anti-tax zealots who don’t know how to say “yes”.   On the right, the narrative seems to be … *sigh*, “no, we’re not.”

This is a game the GOP often plays – letting the other side frame the debate.

In fact, of the two sides, it is only the GOP that has actually put forward a plan.   The president has certainly not put forward anything.   He’s winging it.  And Senate Democrats haven’t put up anything.   They’ve simply refused to ratify the GOP plan (passed in the House – Cut, Cap and Balance (CCB)).

So who is the problem here?   We have a GOP plan, we have no plan from Democrats or the White House.   From them, all we have is grousing about the GOP plan and claims they won’t say yes to anything.  Well, not true – they said “yes” to CCB, both in the House and the Senate.  The only party that hasn’t said “yes” to it or anything is that of the Democrats.

John Podhoretz sums it up pretty well talking about Obama’s presser yesterday:

Liberals say this is good for Obama because it shows GOP recalcitrance. Conservatives say that he has remained so committed to enormous tax increases that he tanked the very possibility of a deal. Time will tell, but it strikes me that the heated rhetoric he is using—”I didn’t get my phone call returned,” “I’ve been left at the altar,” “there’s nothing Republicans will say yes to”—does not suggest he, Obama, feels he has been handed a gift by Boehner and the GOP. He claims to have put $1.5 trillion in cuts on the table, plus $600 billion in entitlement reductions, in exchange for tax increases of the same size. He says Republicans said they would accept a dollar in higher taxes (or “revenue”) for every four dollars in cuts, which isn’t exactly saying “no’” to everything.

No, I’d say those who are saying “no” are Dems who want “increased revenues” and won’t take anything less than their version of that (and yeah, I’m not happy with the GOP talking about any sort of tax increase – but the claim here is that the revenues they’re agreeing too won’t come via tax increases per se, but tax reform.).  

So:

For their part, Republicans in the House passed their cut, cap and balance bill on Wednesday, and it included an increase in the debt ceiling, so even by his own account his criticisms of the GOP are not accurate.

Precisely.  As Speaker Boehner said after the latest breakdown in negotiations:

“The House has passed its bill. We did our work. We passed our bill. The Senate hasn’t put a plan on the table. The president hasn’t put a plan on the table.”

If there’s a “no” contingent out there, it’s the bunch without a plan (except for raising taxes).

~McQ

Twitter: @McQandO


Obama and the debt ceiling

I was gobsmacked by this quote in a POLITICO story about Obama’s walkout from a debt ceiling negotiation:

On exiting the room, Obama said that “this confirms the totality of what the American people already believe” about Washington, according to a Democratic official familiar with the negotiations, and that officials are “too focused on positioning and political posturing” to make difficult choices.

That line could be the summary of the Obama presidency to this point.  Think Afghanistan for instance.  Remember this:

The withdrawal has created deep divisions in Washington. The defence secretary, Robert Gates, argued for a modest reduction – at one point as low as 2,000 – citing the advice of US commanders in Afghanistan that they need to protect gains made during the winter against the Taliban.

But senior White House staff, conscious that the president has an election to fight next year, argued in favour of a reduction that would send a signal to the US public that an end to the war is in sight.

The “difficult choice” would have been to keep the troops in place and reinforce the success they’ve been having.  Instead, we got the “positioning and political posturing” decision made to hopefully enhance Obama’s re-election chances.

Certainly, there is political posturing going on all over the place by both parties, but when the GOP actually sticks to its guns (no new tax increases) while playing hardball, how does that “confirms the totality of what the American people already believe?”  I don’t think he understands which side of that statement he’s actually on.

Ed Morrissey makes another point:

One of the easiest ways to identify an amateurish negotiator is the issuance of obviously empty threats.  Yesterday, Barack Obama issued one of the emptiest political threat in modern American history when he stomped out of the debt-ceiling negotiations yesterday in a fit of pique:

“Eric, don’t call my bluff. I’m going to the American people with this.”

Really?  Then Obama will be in for a very rude awakening when he finally meets the American people:

Gallup: Americans paying attention oppose debt-ceiling increase almost 2-1

CBS poll shows 69% opposed to a debt-ceiling increase

Poll: Majority support a balanced budget amendment

Poll shows more people concerned about national debt than national default

Poll shows Americans getting more pessimistic on economy, want spending cuts

Americans oppose raising debt ceiling by more than 2-1 in Gallup survey

CBS poll shows Americans oppose debt-ceiling hike 2-1

Hill poll shows 62% opposed to raising the debt ceiling

The people have been taking it to Barack Obama since the midterm elections.  Maybe he should do less stomping and a lot more listening.

But listening isn’t one of his forte’s.  Instead he likes to play games like this.  I’m sure some sycophant will soon call what he did “gutsy”.  Bottom line, the GOP has to hope he actually follows thorough on his threat because he is obviously not at all tuned into the American people who, as the links point out, have been stating their opinion for quite some time.

Obviously Obama thinks he can pull his campaign trail wool over the American public’s eyes one more time.  But my reading is that public is in no mood for his oratorical mendacity.  The swooning crowds of yore are no more.   For 2 plus years Americans have been able to watch and assess this guy based on his actions, not his words.  And if the “generic Republican” poll is any indication, they’re wanting change as badly now as they did when Obama was swept into office.

So – hang tough GOP, the polls say the American people are with you.  Don’t fall for the political theater and cave to non-existent pressure.  He’s the one the with problem.  Make sure you remember that.

~McQ

Twitter: @McQandO


Comment Of The Day

It’s rare that I quit reading through a comment section because I happen upon what’s surely the best comment. However, this comment to Capt. Ed’s post about the Obama administration’s thuggish tactics in the Chrysler negotiations sums everything up perfectly:
obama-scold-finger1

“I did not have knowledgeable relations with it, that Constitution.”

Heh.

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