Why Sane Bargaining Looks Strange

The New Political Narrative

An entirely new political narrative is taking shape before our eyes, yet many here are still stuck in the old one.

President Obama's victory blew up the framework created by the 2010 elections, which forced him to play defense. Now, he finally has room to move. That's the only way to understand the ongoing budget talks.

This has several implications. First, why was anyone surprised that Obama's initial offer to the Republicans was a compendium of what he'd actually prefer? We became so accustomed to Obama's earlier habit of making pre-emptive concessions that the very idea he'd negotiate in a perfectly normal way amazed much of Washington. Rule No. 1 is that you shouldn't start bargaining by giving stuff away when the other side has not even made concrete demands.

Second, Obama made clear that he will not allow the fiscal calendar to set his priorities. Past actions by Congress established this wacky set of deadlines requiring frenzied decision-making. This does not mean the deficit is the nation's highest priority. It isn't. Speeding up economic growth is the most important thing now.

Thus did Obama's opening proposal call for measures to boost the recovery, including an infrastructure bank, a public-private partnership that ought to appeal to Republicans. And he was right to insist upon an extension of unemployment insurance and another year of the payroll tax holiday or some equivalent way to keep middle-class purchasing power up. Raising taxes on the wealthy won't damage the economy. A sudden drop in the take-home pay of the vast majority of American consumers would.

Third, House Republicans have, so far, been unwilling to assume any risk to get what they claim to want. They seem to hope a deal will be born by way of immaculate conception, with Obama taking ownership of all the hard stuff while they innocently look on.

Obama went that route in 2011 when he feared that Republicans would bring down the nation's economic house by failing to pass an increase in the debt ceiling. This time, he doesn't face that risk.

If we go past the so-called fiscal cliff deadlines and all the resulting budget cuts and tax increases come into force, the administration can minimize the damage. It can delay the implementation of new tax tables so billions of dollars are not suddenly sucked out of the economy. There is no law requiring that budget cuts be implemented upfront or spread equally across the year. Obama can publicly announce he is delaying any cuts, on the theory that Congress will eventually vitiate some of them. And he can make sure the bond markets know of his plans well in advance.

This is not pretty, and it's not ideal. But the only way to keep the next four years from becoming another long exercise in gridlock and obstruction is for Obama to hang tough now. And he has every right to.

Republicans claim they are fighting for cuts in entitlement programs, particularly Medicare. Fine. Let them put their cuts on the table. So far, all we have are words. Obama has outlined $400 billion in savings from Medicare. If this isn't enough, the GOP's negotiators should tell us why, and how to find more.

Republicans also say tax reform can raise enough money so we can avoid rate increases on the wealthy. Fine. Let them put forward a comprehensive plan so we can judge it. Their problem is that tax reform can't produce the revenue that's needed, but let's at least see what they have in mind.

Obama is criticized for making life difficult for House Speaker John Boehner, who has to bring around a rather right-wing caucus. Sorry, but demanding this sort of solicitude doesn't fly anymore. Boehner rather brilliantly used the "I have to deal with this crazy uncle in the attic" gambit to extract a lot of concessions in 2011. Republicans walked away from the great deal Boehner won for them. The intervening election means they won't get a similar gift this time. Obama has to win something for his own progressive supporters who rightly feel empowered by November's results. Two can play the crazy uncle game.

So a normal negotiation looks strange only because the last two years have been so utterly abnormal, driven by tea party extremism and an irrational hostility to Obama, a fundamentally moderate man who has already shown a willingness to offer more than his share of concessions. Boehner knows this, which is why everyone (especially Wall Street) should calm down.

 

(c) 2012, Washington Post Writers Group

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If it's show down poker, Obama should turn the first card over... that's making 'carried interest' compensation move from 15% to the highest tax rate =39.6 %.

Why hedge fund compensation tax rate should be lower then overtime truck drivers is an easy tell all for the middle class. second and third cards should be capital gains and dividends to at least 18%.. then "all in'

Sorry that my name is incomplete.  I am Fr. Kevin Laughery, New Berlin, Illinois.

I look to E.J. Dionne as a trustworthy guide to the challenges of applying Catholic social teaching to the current governmental drama.  But in this article, I find him using the term "immaculate conception" while obviously intending to use the image of "virgin birth"!  

The absurdity of Dionne's reasoning continues to astound me, starting with his fallacious assumption that "President Obama, is a fundamentally moderate man, willing to offer reasonable concessions."  President Obama was never (check voting records and his own writings) nor is  he now,  moderate. Why Dionne would perpetuate such a lie is only a showing of Dionne's misunderstanding of the term or his irrational bias? As to Obama making concessions, show me one that was made in the interest of the AMerican people and not in the interest of his aspirations for continued political gain.  Dionne needs to talk to actual moderates .... because obviously he's just talking to himself.

Pithily stated, Fr. Laughery.  Mr. Dionne's acute observations on this political moment, along with his misuse of the term "immaculate conception," have had a pretty wide distribution.  I happened to read them first in the Sacramento Bee, and I sent him rather more extended comments.  The misuse is by now so common that Fowler might have classified it as a sturdy indefensible, but it was disappointing to see Mr. Dionne echoing it.

@ SB Gravely

I just watched Obama being interviewed by Bloomberg TV. In that interview, much to my chagrin, he already made concessions to increase the age for Medicare beneficiaries from the current 65 to 67. as well as reducing the COLAS for Social Security recipients. A few days ago Social Security was off the table. This is before any serious negotiations have even started. If that isn't being moderate then I'm a monkey's uncle. From my perspective your claim that the President is not moderate is disengenuous. Why else was his base unhappy with his performance during his first term.

If anyone is extreme it is Sen Mitch McConnell who stated several times in front of rolling TV cameras that his primary mission was to make certain Obama became a one term President. The only thing he didn't mention was the country be damned which was implicit. Judging from his latest pronouncements, in spite of the November 6 election results, he is still unwilling to compromise as ever.  Maybe he is in denial along with a lot of his fellow Republicans

What we have seen in the last couple of weeks is a couple of alpha males circling each other in order to determine when and who would land the first blow.

The latest Pew Poll shows that should the negotiations fail the majority of Americans will blame the Republican Party, and rightly so. Perhaps that is one reason why some Republicans are finally willing to break the Norquist Pledge.

Incidentally, who voted for this clown anyway? Nothing personal, just curious.

The development of the fiscal cliff by both Republicans and Democrates is the most absurd piece of legislation I have ever witnessed with possible crippling spending cuts, yet Dionne dismisses this reality.  How can President Obama "delay" legislation he signed into law?  Dionne is correct about any modest tax increase for the wealthy, however middle class take home pay will continue to decrease even in the face of stable taxes.  Why?  Because costs to middle class people will continue to climb, especially energy and food.  Nor does Dionne take into account the various tax increases from the Affordable Care Act.  As one example, the cost of my two new hips I receive several years ago will go up because of the medical device tax in AFA.  It is a tax. The Obama administration is its a tax.  The Supreme Court said its a tax. It is a tax!  The manufacturer with their stockholders will not absorb that cost.  Nor will the hospital or surgeon absorb that cost.  I will absorb that cost.  As an Independent, I am sick and tire of both political parties and their cheerleaders like Mr. Dionne.  Is anyone in Washington D.C. really concerned for the middle class?  I haven't seen a tangible sign in over 8 years!

The discussions that have now lasted more than a year sadly fail to address the core issues of our tax system, our need for job growth, and ways to restore prosperity for the middle class and security for those truly in need.

No combination of the various current proposals substantially addresses our corporate income tax system which hobbles American-based corporations (see Wall Street Journal, December 4). The double taxation of dividends will be maintained and, for some individuals, made worse. The government will take a larger share of the fruits of innovation and investment, and we'll wonder why the economy's recovery slows. There is no provision for education vouchers (a powerful expression of a preferential option for the poor). Nothing is proposed that will make our income tax system more simple, transparent, or fair (such as replacement of deductions, preferences, etc., with a single, low rate applied to all income). Meanwhile, the Health Care Act will impose its own stealth excise taxes, fees, penalties (reverse incentives) that add complexity to any attempt to plan a business venture.

We the people are again allowing our elected leaders of both parties to trivialize the fundamental issues of economic social justice. Once again we are being promised real reform "next year" after the short-term patches are setteld. Will "next year" ever arrive?

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About the Author

E. J. Dionne Jr. is a syndicated columnist, professor of government at Georgetown University, and a senior fellow at the Brookings Institution. His most recent book is Our Divided Political Heart: The Battle for the American Idea in an Age of Discontent (Bloomsbury Press).