Thursday, December 20, 2012

"Houston...We Have A Problem"

Just when it looked like Democrats and Republicans were close to a deal that would avoid the “fiscal cliff” the wheels came off the wagon.
The president campaigned on the promise of raising taxes on those individuals making over $200,000 and those families making over $250,000.  He said he would not budge on that promise.  Then he did; raising the number to $400,000.  And there is little doubt that he would go to $500,000 if that cemented the deal. 
The president said the he would not place the burden of avoiding the fiscal cliff on the backs of the middle class while giving tax breaks to millionaires and billionaires.  Then he did; agreeing to Republican demands to adjust the cost of living indexes for entitlement programs…a move that will save the government about a trillion dollars in benefit payments over the next decade.
He said that he would reach out to the business community to get their pulse on the changes needed to revive the economy and create jobs.  Then he did; hosting a number of industry leaders at the White House.  As a result, CEO's who had previously opposed the president’s efforts to reach an economic deal are now firmly in his corner.  CEO’s want a deal; even if it means that they pay higher taxes.  Certainty trumps tax rates.
The president says that he has met the Republicans half way.  By any measure he is correct.  You know that the president has given in on some of his core issues by the savage attacks he is receiving from his own base.
So where are the Republicans?
The president was expecting some type of counteroffer to his $400,000 proposal.  Instead Boehner announced that the House would vote today on a bill that kept the Bush tax cuts in place for all but those making over $1,000,000…period…a plan the speaker refers o as “Plan B.”  Eric Cantor then added to the mess with $200 billion in spending cuts that slashed the social safety net.
What?
If passed in the House this “Plan B” has no chance of passing the Senate.  And even if it does the president has pledged to veto it. 
So what is Boehner doing?
Basically trying to save his speakership.
Boehner doesn’t really care about going over the fiscal cliff.  What he cares about is avoiding a deal today that may cost him his speaker ship when his caucus votes on the matter on January 3rd.  So he proposes this $1,000,000 bill with two thoughts in mind.  If it passes the House Boehner can say that he has his caucus in line and that he is in a stronger position to debate the president on cutting expenses and raising the debt ceiling.  If the bill fails he may look weaker; but he is gambling that when the country goes over the fiscal cliff Americans will place the blame on the Democrats and the president for shooting down legislation that raises taxes on millionaires.  Meanwhile he will have bought the time he needs to secure his speakership and the bargaining power to reach a more favorable deal with the president.  Boehner is taking a big gamble here.  He wants to keep his speakership.  But to do that he has to bow to the far right in his caucus who have yet to get the message that the president won the election.  Essentially Boehner is putting his speakership ahead of the will of the people. 
If you look at the proposals on the table the two sides are about $250 billion apart over ten years.  That’s chicken feed.  There is a deal to be made.  But Boehner still has the problem of getting his caucus in line.  Many of his more conservative members still refuse to raise taxes under any circumstances.  In the end Boehner may find himself forced to do something her really doesn’t want to do…bring a bill to the floor that passes the House with only a bare minimum of Republican votes.  If that happens before the end of the year Boehner’s days as speaker may be drawing to an end.
Elections matter.  The president has the country’s support and the very large megaphone of the bully pulpit.  The business community is on board.  And in the country has little patience for ideological pettiness in wake of the Connecticut shootings.  Everyone wants a deal…now.
Houston...Speaker Boehner has a problem.         
        

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