A Flea in the Fur of the Beast

“Death, fire, and burglary make all men equals.” —Dickens

Tag: obama fiscal cliff

“Leverage”

by evanmcmurry

From now on, when you go to dictionary.com, the following will be found as the definition of “leverage”:

The leaders warned that the Senate was unlikely to approve any changes to the carefully calibrated compromise and that a vote to amend the measure probably would leave the nation facing historic tax increases for virtually every American — and force House Republicans to take the blame.

The other option: Let the measure pass the House unchanged and go to the White House for Obama’s signature. Late Tuesday, it appeared that even some of the chamber’s staunchest conservatives were ready to give up the fight.

“I think the best outcome is to have a clean bill, actually put it on the floor and see what the consensus of the House is,” said Rep. Raul R. Labrador (R-Idaho), a freshman who has opposed every major bipartisan compromise on the budget over the past two years and said he would vote against the measure.

Rep. Lou Barletta (R-Pa.), another freshman, said he would support the legislation as the “safest bet” to prevent a major tax increase that many economists predict would throw the nation back into recession. (via)

As in, “In the fiscal cliff negotiations, Obama squandered significant leverage.”

Marco Rubio’s Fiscal Cliff Statement Is The Worst Thing Ever

by evanmcmurry

If you want to take a break from hating Obama for the fiscal cliff deal—as Krugman put it, it’s not the compromise that’s so odious, but Obama’s “I’ll have to retreat if you don’t stop being so stubborn” style of getting there—you might want to take a few minutes to read over Marco Rubio’s reasons for voting against the compromise. (He was one of eight senators* to do so.)

Rubio’s principle claim is that the return to Clinton-era tax rates will hurt the economy (yes, you have to ignore the fact that we had rapidly growing economy during Clinton years and that the Bush-era tax cuts contributed mightily to the debt problem the Republicans currently claim to hate—or don’t!):

Thousands of small businesses, not just the wealthy, will now be forced to decide how they’ll pay this new tax…

I’m no big city economist, but Blake Goud is**, and I’m pretty sure he destroyed this whole “tax raises on small businesses” nonsense on this very blog a long time ago. Most of the revenue taken from small businesses under the higher tax rates will come from a tiny (.3%) number of “small” businesses that make most of the money of businesses classed under S corporations. Note Rubio draws a distinction between small businesses and wealthy in the above sentence; but there’s no real distinction in the case of the tax rates.

Here’s the rest of that sentence:

Thousands of small businesses, not just the wealthy, will now be forced to decide how they’ll pay this new tax and, chances are, they’ll do it by firing employees, cutting back their hours and benefits, or postponing the new hire they were looking to make.

This is a reprise of the past two years’ worth of arguments over austerity: cut rich people’s taxes, or else. It’s not based on any sort of economic theory or empirical data. It’s a temper tantrum, in which rich people get what they want or nobody gets an economy. This was roughly Mitt Romney’s raison d’etre as a candidate, and he lost decisively.

More:

Furthermore, this deal just postpones the inevitable, the need to solve our growing debt crisis and help the 23 million Americans who can’t find the work they need.

Again, the debt crisis was partially created by the Bush tax cuts.

And my favorite part:

Rapid economic growth and spending reforms are the only way out of the real fiscal cliff our nation is facing.

This sentence makes no sense. Yes, economic growth over the long term helps eliminate deficits. But Rubio here seems to be proposing economic growth as both a cause and a consequence of this solution. It’s like if he said at the start of the Iraq War, “Winning is our only path to victory!” Come to think of it, somebody basically did just that, the same person who’s at the start of this whole tax cut mess in the first place.

* Go on, guess who one of the others was. Go on. Okay, it was Rand Paul.

** For the purposes of this post, Portland is a big city.

The Best Article On The Fiscal (It’s Not A) Cliff You’ll Read

by evanmcmurry

Chait gets to the core of the stalemate between Obama and Republicans over spending cuts in a direct way I haven’t read anywhere else:

Reporters are presenting this as a kind of negotiating problem, based on each side’s desire for the other to stick its neck out first. But it actually reflects a much more fundamental problem than that. Republicans think government spending is huge, but they can’t really identify ways they want to solve that problem, because government spending is not really huge. That is to say, on top of an ideological gulf between the two parties, we have an epistemological gulf. The Republican understanding of government spending is based on hazy, abstract notions that don’t match reality and can’t be translated into a workable program.

[…] There really isn’t money to be cut everywhere. The United States spends way less money on social services than do other advanced countries, and even that low figure is inflated by our sky-high health-care prices. The retirement benefits to programs like Social Security are quite meager. Public infrastructure is grossly underfunded.

[…] When the only cuts on the table would inflict real harm on people with modest incomes and save small amounts of money, that is a sign that there’s just not much money to save. It’s not just that Republicans disagree with this; they don’t seem to understand it. The absence of a Republican spending proposal is not just a negotiating tactic but a howling void where a specific grasp of the role of government ought to be. And negotiating around that void is extremely hard to do. The spending cuts aren’t there because they can’t be found.

Add on to this the fact that Americans only support spending cuts in the abstract—and not when those cuts affect specific programs or benefits—and you have the perfect conditions for some sort of Beckettian absurdist standoff.

Lessons In Negotiating

by evanmcmurry

From Greg Sargeant:

The basic fact remains that Dems have made a substantial proposal, while Republicans haven’t. Dems have meaningfully detailed what they want, and Republicans haven’t. Republicans keep telling us that Obama must show “leadership” by detailing the spending cuts the White House is willing to accept, and that the Dem proposals are not “serious” because they have yet to do this. But how are we supposed to know what will count as “serious” spending cuts, if Republicans won’t detail what they want? It’s doubly curious that Republicans refuse to do this, given that they keep saying the 2012 election gave them a mandate for cutting spending.

Look, this is just a sucker’s game. What Republicans really mean when they demand that Obama “lead” is that they want him to propose bigger concessions up front so Republicans can denounce them as insufficient — which they would do no matter what he proposed — pulling the debate further and further in their direction.

Just like during the Romney campaign, we’re in a weird netherworld in which Republicans think detailing what they want is the compromise. They think they’re being bipartisan just by engaging in negotiations.

John Boehner Is The Saddest Man Alive

by evanmcmurry

The GOP’s opening salvo on the fiscal cliff negotiations* is so radical it wouldn’t even pass the House. The House Of Representatives. The one that set itself on fire in the summer of 2011, cost us our triple-A rating, etc., that one. Via Weigel:

The “balanced plan” is the Ryan budget, which can’t pass the Senate. The sequester replacement takes all the savings from defense and applies them to social programs. It lost 16 Republican votes when it passed the House in May, so not only is it doomed in the Senate, it probably couldn’t pass with the smaller House GOP majority taking office in six weeks.

Most likely, this is an indication that Boehner hasn’t figured out how to change his rhetoric to reflect the post-2012 election political landscape. Which is ironic, as he only went this far to the right because the 2010 tea party-infused election petrified him into his current position. Now he’s stuck repeating empty proposals his own chamber won’t endorse. This guy can’t win for losing.

* It’s not a cliff.

GOP Learns What Obama Was Saying While They Had Their Fingers In Their Ears

by evanmcmurry

One of the more oft heard complaints in the latter days of the campaign, from Democrat as well as Republican pundits and figures, was that Obama had presented no plan for his second administration, but was simply running an anti-Romney campaign and getting away with it. This was a neat way to obscure the fact that Romney had literally offered no proposals, as opposed to just not offering the sweeping type that was suddenly a requirement of Obama (never mind that the moment Obama did begin to talk like this, he was lampooned as having a savior-celebrity complex).

Anyhoo, here’s Greg Sargeant:

A key observation about the new White House offer from the Post reporting team: 

While the proposal seemed to startle Republicans, it contains little that would be unfamiliar to anyone following the president’s public statements.

Obama campaigned on much of this stuff, and won. It’s not surprising it’s in his opening bid.

It is if you were making TelePrompter jokes while he was talking. Republicans refused to listen to anything Obama said, then accused him of saying nothing, and are now shocked that all the stuff he was saying while they smirking has a fighting chance of becoming policy 32 days from now.