[lbo-talk] budget drama: Reps "checkmated"?

[SA]

> On 7/14/2011 8:56 AM, Doug Henwood wrote:
>
>> --A Senate Democratic aide emails: "While no one can predict how this 
>> drama will end, one thing seems apparent: the President has just 
>> about checkmated the Republicans. At this point, the GOP seems to 
>> have only four possible moves: (1) force a default, which both Mitch 
>> McConnell and the Wall Street Journal editorial page are openly 
>> warning would be a political disaster for Republicans that would 
>> ensure Obama's reelection; (2) accept revenues in a final deal, as 
>> even Bill O'Reilly is now saying they should do; (3) accept a smaller 
>> package of cuts that doesn't meet Speaker Boehner's 
>> 'dollar-for-dollar' requirement; or (4) settle for a version of 
>> McConnell's 'punt' plan, which, after all this, would not mandate any 
>> spending cuts whatsoever. Needless to say, none of these are winning 
>> scenarios for Republicans."
>
> They're checkmating themselves. They had an offer on the table of $2 
> trillion in cuts - to Medicare, Medicaid, Social Security - all of 
> which would have Obama's fingerprints all over it. All they had to do 
> was accept a revenue-neutral tax package (i.e. closing some 
> deductions, offset by an AMT fix). But the GOP freshmen who were 
> extreme enough to lever the party into this favorable bargaining 
> position then proved to be so extreme that they couldn't take yes for 
> an answer.

I should add that this isn't over yet. Apparently, there's talk of a 
"split Boehner/McConnell" deal. If that went through, Obama would really 
be breaking new ground in Democratic awfulness.

The idea is this. As of now, Obama's position has been that the GOP can 
pick: either a $4 trillion deal with real tax increases or a $2 trillion 
deal with tax changes that are plausibly not real increases. You'd think 
the Republicans should be all over deal #2. But the freshmen extremists 
have their own bottom line: spending cuts must match the increase in the 
debt ceiling "dollar for dollar." Since the debt ceiling has to be 
increased by $2.5 trillion, there's no way to meet that requirement in a 
$2 trillion deal. (The dollar-for-dollar thing is unbelievably dumbass: 
everyone knows the spending cut number is spread over 10 years while the 
debt ceiling increase is spread over 18 months; so it makes no fucking 
sense even on its own terms.)

That impasse is why McConnell came out with his plan to drop all 
spending cuts in exchange for a convoluted process whereby Obama takes 
all political blame for the debt ceiling increase and the GOP gets to 
vote against it. But the Tea Party base rebelled against McConnell's 
"Pontius Pilate" betrayal - how can you allow Obama to raise the debt 
ceiling unilaterally without spending cuts?

So now, a hybrid option is floating around: Obama agrees to a package of 
spending cuts lower than $2 trillion, no tax changes, plus the McConnell 
procedure. That way, the Tea Partiers can maybe be mollified by spending 
cuts; Obama doesn't have to officially change his bottom line; and the 
freshmen don't have to vote for a debt ceiling increase in the absence 
of "dollar for dollar" cuts.

If Obama agrees to this, he not only agrees to huge budget cuts with no 
revenue, but he forces the Congressional Dems to sign their own suicide 
notes.

SA