Tuesday, January 01, 2013

Democrats Cave In Fiscal Cliff Negotiations

It seems to me that the Democrats made most of the concessions in the so-called "Fiscal Cliff" negotiations. The Republicans have given up very little while they are making the most demands. It's almost as if the November 6th elections never happened.

Robert Reich makes pretty much the same point here. Michael Hiltzik accurately describes the Fiscal Cliff negotiations as a con game. This deal doesn't do much of anything to help fix the debt/deficit. In fact, as the CBO has reported, the deal would add $4 Trillion to deficits over the next 10 years. The Republicans have been allowed to fool the Country into believing that the Bush Tax cuts were intended to be permanent. That is not the case. It was meant to be a temporary tax measure to stimulate Bush's faltering economy. And even after it went through, it didn't prevent an economic collapse under the watch of Republicans. Yet Republicans want to extend them for everybody.... even for 98 or 99% may be too much. It ties the hands of future policymakers who will now certainly face a Greece like situation. They won't have the flexibility to deal with the problem the way that George H.W. Bush and Bill Clinton did, once they saw that reality required a policy change. This will make things worse in the years to come.

Even with all the concessions made by Progressives, the Republican leaders in the House of Representatives are still reluctant to support the Senate bill.

I think everyone is missing the larger point. All of the actions from Republicans are, in my view, less about taxes and economic philosophy and more about political revenge and 2016. It's selfishness taken to a new level. If the Republican fiscal hawks were truly concerned with the debt and America's economic future, they would have accepted the earlier big offers from Democrats that put $4 Trillion in deficit reduction on the table.  Republicans refused those offers. Their obstruction is clearly aimed at making Obama's second term as difficult as possible and slowing and (if they can) reversing the economic recovery, just as things were really starting to turn around. There is no other logical conclusion that I can come up with. They know that by creating uncertainty about taxes, debt, social security, medicaid, the debt ceiling, and governance in Washington, there will be a drag on the economy for the foreseeable future. They also know that they may cause yet another credit rating downgrade... causing unthinkable damage to the American economy. They know that the economy was poised to take off in 2013. They did not want to see that happen under any circumstances... not when Obama could take credit for it. Their plan seems to be to keep the country in a constant state of economic crisis. They want these cliff and debt ceiling fights to re-occur every few months to slow the economy and to keep Obama tied up, preventing him from doing some of the other things he wants to do in a second term. They know exactly what they are doing. Treasonous bastards. I don't recall anything remotely this bad, this cynical in modern American political history (post-Civil war).

This is why I get especially annoyed when the media acts as if the Republicans have legitimate concerns and they are really looking out for the Country. Their whole premise is fantasy land. They want the eliminate the debt/deficits (created mostly by Republicans over the last 40 years) with spending cuts alone. No additional revenue through taxes. The vast majority of the top economists in the country have basically dismissed this as a pipe dream... They have repeatedly warned that you cannot fix the debt/deficits through cuts alone... that taxes would have to increase on a good portion of the Country. And this is what Americans voted for last November. So why are we going over this argument again?

It is frustrating to know that these fights will come back up every 6 months or every year. Meanwhile the economy (if Republicans get their way) will stall. The credit rating agencies have already warned that if they don't see more political cooperation and more economic certainty, they will hit the national credit rating again.

I wish Obama would stop the nice Black guy routine and address the nation from the Oval Office and tell Americans exactly what the Republicans are doing. He should tell Americans what the consequences will be for everyone, and call on voters to organize to get the obstructionists out of the way in the next midterm election in 2014. Unfortunately most of the problem Republicans are in safe red districts. But calling attention to the obstruction in a more matter of fact way is overdue.

Another strategy for Obama should be to find 30 or so moderate Republicans in the House of Representatives and work with them. Forget Boehner and Cantor. There is a separate moderate Republican wing (although small)...and many of them have expressed a willingness to work with Democrats. Why Obama hasn't used them to bypass Boehner is a mystery to me. Another sign of failure on the part of strategists on the Democratic side.

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