Thursday, December 20, 2012

Negotiation box score update - more FAIL

Well, this isn't as much fun as I hoped it would be. The GOP is hopelessly mired in the idea that they can get a lot by giving a tiny bit.

Boehner's offer circa 12/16/12
  • Tax increases on those with incomes $1 million and over. 
  • Increased revenues of $1 trillion if there are spending cuts of $1 trillion. 
  • GOP keeps the leverage of further negotiations on the debt ceiling. (source)
Obama's offer circa 12/17/12
  • Tax increases on those with incomes over $400,000. 
  • Increased revenues of $1.2 trillion. 
  • Certain savings in the big entitlement programs, but not a particular numerical promise. 
  • Automatic debt ceiling increases based on this deal for 2 years. (source)

Both are bad deals, asking for too much while offering much less. So Boehner is turning to Plan B, writing a bill that will extend  most of the Bush tax cuts for non-millionaires. This bill may pass the House, but then go nowhere, except perhaps as butt-covering for House members. Sigh.


Previous offers:
Boehner/Ryan 11/14/12
  • New revenue only through GDP growth.
  • All the spending cuts in the Ryan 2012 budget. (source)
Boehner 11/15/12
  • Ok, maybe some new revenue.
  • All the spending cuts in the Ryan 2012 budget. (source)
Obama 11/29/12
  • $400 billion in entitlement cuts.
  • $1.6 trillion in tax revenue.
  • $50 billion stimulus program. (source)
Boehner 12/3/12
  • $800 billion in tax revenue.
  • $600 billion in Medicare and Medicaid cuts.
  • $300 billion in savings from programs like farm subsidies.
  • $200 billion to slow growth of government, including Social Security.
  • $300 billion cut to federal agency budgets. (source)


Truth > Spin said...

So Obama wants to get $1.2T in new taxes while giving probably about half a trillion in cuts.

And Boehner wants to get $1T in cuts for $1T in new taxes.

And you think the GOP is mired in the idea that they can get a lot by giving a tiny bit?

If your point was only about the CATs (aka Tea Party) GOP and not Leadership or the balance of the conference, please say so. Otherwise, I can't see your position being supportable.

ModeratePoli said...

@truth, As I keep saying, tax increases are coming. They're a given, not a bargaining chip. So what big concession is Boehner making in his offer? Please point it out to me, because I don't see it.

Also, you have to consider who keeps leverage. I think Obama is willing to make more cuts in later offers in this round of negotiations, but there has to be agreement not to demand even more cuts every time the debt has to be raised.

Also, Boehner is more comfortable specifying where the cuts will come from, and that's a strength. He's very weak on specifying where the revenue will come from. Huge cuts in deductions would wreak vast changes in housing and non-profits, so that would have to be nailed down.

I think Obama could come to an agreement such as this, but I'm not sure Boehner could get there.

*1.2T in new taxes
*1.2T in spending cuts
*No fights over debt ceiling/appropriations for 1 or 2 years.

Personally, I'd like to see more headway on the deficit, mostly through cuts, but also by ending special status on capital gains/dividends.

As for CATs, I don't even know what that is.

Finally, I don't have any idea what you think isn't "supportable." I'm not playing coy--I really don't know and I'm being completely straight.

Please reply because your viewpoint is helpful to me and other readers (and I do have perhaps 40 readers).

Truth > Spin said...

Sorry MP. The fiscally conservative House GOP members used to be called CATs for conservative action team. The Republican Study Committee is another name for mostly the same group.

I'll write more from my desktop in a bit. Typing on a smartphone is for the birds.

Truth > Spin said...

tax increases are coming. And they are baked in the cake. But, the same can be said of the sequester cuts in spending. Why do you hold them as different? Do you think the tax increases are more annoying to the GOP than the spending cuts are to the Dems? While I recognize that many in the GOP hate the DoD cuts, can't the same be said of the Dems and the tax rate increases on the lower earners?

It seems to me that each side is in a similar boat, election results and popular support notwithstanding.

I agree that recognizing leverage is the name of the game. Which is why I would oppose giving a clean 2 year debt ceiling increase. That is the only failsafe in the hands of spending restraint.

I'd be okay with ratcheting it automatically so long as triggers are met. So maybe you'd support that, too. For example, allow that any legislation that scores as deficit positive triggers an increase in the borrowing authority of the same amount. And I'd want PayGo and some other stronger budget mechanisms in place that could not be waived.

Boehner did say where the new revenue would come from in his last offer: on incomes over $1 million. So he should get credit for that, too.

ModeratePoli said...

No, Dems and Pubs aren't in the same boat vis a vis the tax increases. Dems are for extending the tax cut for low to average earners. Such a measure could sail through, but it hasn't. Why? You can't look at Dems as the hold-up, so who is there? By the process of elimination, it must be the GOP. It is that simple to most people (and to me too).

Isn't this your analysis too? If not, why not?

As for the sequester, it's the GOP that have most vocal moaning about it. Their prez candidate wasn't going to do the defense cuts at all. The Dems didn't run on rolling back any of the cuts. Now they could switch, but that won't look too good, so they probably won't.

I don't think the GOP should readily give up their leverage either. But if/when there are reasonably deep cuts, Obama will need assurance that he isn't facing harsh negotiations w/ major concessions in another 6 months. The truce has to last a while.

I don't give Boehner credit for saying where the $1 trillion will come from. Without a better breakdown on deductions/capital gains/tax rates, it's still a bunch of handwaving, perhaps with painful molar extraction to come. He was too weasly with the deductions, so he gets no credit until he's specific about some of the pain.

I've never thought Dems were realists (dreamy hippies is more their stereotype), but they've accepted spending cuts much more easily than the GOP has accepted tax increases. #Unexpected!

ModeratePoli said...

I didn't answer one of your questions, which is "don't the Dems hate the tax increases on the lower 95%." It's not that they support them or don't care, but it hurts the GOP much worse than the Dems in the mind of the electorate, especially if the GOP requires concessions to stop those taxes increases. If that's the case (and it's kinda been that way), then the Dems are the champions of the tax cuts and the GOP are the villians...OF TAX CUTS. Oh, the irony.

The Dems look like the champions of the middle class, and the GOP like hostage-takers working for the upper class. That can't be good for the GOP for future elections.

That's why the GOP can't really get anything for the middle-class tax cuts. It's an expectation that every party should support them, so there will be only be blame to apportion if they go up for an extended time.

Do you get my analysis?

Truth > Spin said...

As a negotiating and certainty matter, I fully understand that any truce has to last a while. I hope you also understand why so many GOP members have concerns about deals that raise taxes first with future promises (or undermining action) on spending.

Since you clearly understand the difference between requiring affirmative action to do something constructive and policy that is automatically triggered, could we agree that a deal that increased taxes might be now paired with a debt ceiling window that stayed open only so long as spending actually was pared back? For example, your 1.2 T in both new revenue and spending cuts with a debt limit increase that expires (in a managed way) if the cuts are undermined and if future entitlement reform isn't enacted?

As I read what I've just written, MP, I must admit that I am face to face with the same situation with which I am always faced: namely that "my" side is once again letting Lucy hold the football and that all of us are being forced to construct these elaborate Rube Goldberg systems because the status quo is incapable of working. Sigh.

As for which side gets hurt more, I think you are probably right that the Dems have the advantage of being able to absorb cuts more easily that the GOP can adsorb tax increases. Part of that has to do with the inertia of Leviathan in my view. Over the long arc, spending even adjusted for inflation and population gains is going up no matter which nip and tuck is made today. So the Dems can be more magnanimous about it in the short term.

I'll note too that my canary, Jeb Hensarling, voted for the replacement sequester bill and that he has been relatively silent about the various work-out plans. So I still stand convinced at this point that a deal will be made either just before or just after 1/1/13.

ModeratePoli said...


Totally agree with Pubs and anyone who notices that spending cuts or restraint don't seem to happen but once a decade or less. That's why a grand bargain would have been good in 2011 or anytime really, but the GOP just hasn't been a willing partner to grand bargains. It's a shame.

This may sound condescending, but the GOP has to have a different mindset than it's had in the negotiations. They've been so freaked out about crossing certain lines that they haven't nailed down what they really should nail down, like definite cuts to programs with working triggers and/or leverage points. It's amazing how much they squandered their 2010 victory by being rigid and unrealistic about what happens in negotiations.

I say this as someone who wants budget restraints and thanks the TP for forcing budget issues.

The GOP could be the party of fiscal realism, but they aren't now and they haven't started moving that way. It's really sad, because the country needs them to do that. Thank God the Dems aren't been as terrible as usual on spending--their leaders are smarter than the base, and used their loss to reform quietly but with effect.

About the deal for either side of New Years, I don't think it'll be a grand bargain. It's kindly to be an almost complete capitulation on taxes. The real negotiations will start shortly in the run up to the debt ceiling increase.

So, a question for you just in case you have some insight. Why have the GOP been such poor negotiators?

Truth > Spin said...

MP - I hope you had a nice Christmas.

In answer to your final question, I don't know that the GOP have been "poor negotiators".

I think there are a few things that complicate the

First, the party is made up of members with disparate interests and priorities. This division goes beyond the Tea Party, Evangelical and establishment wings, but those are three broad cohorts that sometimes overlap and sometimes don't.

Second, I truly think some of the party's positions are widely out of favor with the broad public. This isn't to say they are bad or wrong positions, just that they aren't popular. Demographics and human nature can explain much of this. This is a real challenge for the party and component movements going forward.

Finally, at the end of the day, votes talk. This goes beyond elections having consequences and right to the heart of our system. The question for anyone dealing with Boehner in the House is whether he can deliver the votes. Uncertainty about this can lead to an improved negotiation position for the GOP for a while, but at some point the question is called and after that point, an inability to deliver votes will undermine him tactically.

Put another way, I don't think the outcome for the GOP would improve by only changing Leadership unless their interests, priorities and discipline also changed.

Truth > Spin said...

Edit: I intended to write that there are a few things that complicate the matter.

ModeratePoli said...

@truth, I didn't mean to imply that Boehner alone was a poor negotiator. It's not as though I'm seeing some major GOP members who have a much clearer vision.

In fact, Mitch McConnell did a poor job last year on the debt ceiling negotiations, or I'm guessing it was him. He was so concerned that GOP congressmen wouldn't have to vote for debt ceiling increases that he took his eye off the ball concerning GOP leverage, or even a menu of cuts that GOP could live with.

Nonetheless, I also think McConnell delivered what the GOP most wanted, which was a cut-only budget agreement and cover on the debt ceiling votes. So a bigger part of the problem is the unrealistic expectations of the GOP and perhaps an emphasis on less important aspects of the deals.

Truth > Spin said...

MP - your last comment interests me. On the one hand you say that McConnell did a poor job and then that he delivered most of what his party wanted.

I think you mean that he did a poor job vis a vie what you think a good outcome would be for the nation/economy/system. And maybe even vis a vie what is actually needed (if you believe in objective truth, that is).

Yet, if his position as a negotiator as Minority Leader is to represent the views and interests of his membership, and you assert that he did that well, then where is there any hint of hiving done poorly?

Certainly his position as a Senator from KY ought to compel him to do what is best for his State and the nation and not only the party, if those thing are in conflict. But we would need to know that he is choosing party position over what he truly thinks would be best. Is it your position that deep down, McConnell knows or thinks that some other course is better?

ModeratePoli said...

Yes, I'm aware of a seeming contradiction in what I wrote. Part of the problem is that the party is misguided in what it wants. They are willing to sacrifice long term goals for short term comfort. For example, looking good to primary voters by voting against debt increases, when really they probably had to give up something more substantial, such as a few more cuts and better triggers.

As a leader, one would think that McConnell wouldn't let the superficial matters deflect his efforts--that he would give better guidance. But I don't see any evidence that he has. Here's another example--the GOP spent a lot of time complaining about defense cuts without putting effort into detailed plans for cuts to replace them that were still reasonable to the electorate.

It's similar to trying to raise children. You don't give in to their tantrums, but you try to guide them to think clearly for themselves. I didn't see that from McConnell or any of the GOP leaders. They were muddy in their proposals (eg. Romney's tax reform) but vociferous in rhetoric. It might have felt satisfying, but it didn't work for those outside the bubble.

As to whether McConnell knows that he should be doing better, I have no way of knowing. However, I don't think he's a saint who always puts the greater good above partisan advantage. I don't know any politician who does this because then you would have to occasionally endorse someone from the other party when your party picked a real hack. But politicians hardly ever do that. Party always trumps in candidate races.

So, no surprise if McConnell sometimes or often puts partisan advantage over the greater good (one of your questions).

As for me saying the GOP negotiators haven't done a good job, maybe it's because I see the leverage that Dems gained, and they also gained respect for being able to compromise.

Notice that Reid has been able to get his caucus to stop being demanding, not to talk more about the problem just being revenue, but to get with the program that deficit reduction has to be balanced including both cuts and tax increases. That was good leadership in that it put his side on a track to better electorate results.

I'm not sure whether this is 100% internally consistent, but that's what I'm thinking. I welcome more questions if you have them.