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Boehner's Plan B Is Going To Make It Harder: Why I'm Still Not Optmistic About A Fiscal Cliff Deal

18 Dec 2012
Posted by Stan Collender

Yes, I'm still pessimistic about a fiscal cliff deal before January 1. While the odds of avoiding the cliff seemed to improve yesterday as the headlines screamed that Obama and Boehner had moved closer to each other, it was clear to me that, if they had improved at all, it was only marginally. To my mind it's still better than 3:1 that we go over the cliff.

Here's why.

First, this was always going to be a two-step process: Obama vs. Boehner, then Republicans vs. Democrats. Even if the first step was successful, the second step was always going to be problematic. And an agreement in the first step would likely make the second more difficult.

That, in fact, is exactly what happened over the past 24 hours. The rumor that Obama and Boehner were close energized the rank and file in the House and Senate, who have not been part of the negotiations and had little stake in the outcome.

By this morning, both the White House and House Republicans had rejected what the other had offered.

In other words, the only thing the first and the second step in the negotiating process has produced over the past 24 hours is hard feelings. There is no meeting of the minds and no sense that going over the cliff has to be avoided.

That's movement but no progress.

Second, Boehner's response to the White House's latest offer -- his Plan B -- is making things worse not better and is going to leave him in a worse rather than a better negotiating position. Bringing a bill to the House floor that keeps the existing tax rates in place for everyone except those earning $1 million a year may well pass -- almost all Democrats are likely to vote against it as will some tax-increases-over-my-dead body tea partiers -- but all that will do is give Boehner less room to maneuver if and when he returns to the negotiating table. How can he accept a deal that increases taxes for those earning less than $1 million if the GOP caucus has just said that's what it wants?

In the meantime, Boehner's ploy is uniting House Democrats as they haven't been united in years, or maybe decades. In addition, now that Boehner's Plan B is making them part of the negotiations, the White House almost certainly will have less room to maneuver as well.

If Boehner goes ahead with Plan B, it's very likely that the Obama offer to change the way entitlements are indexed will be withdrawn because House Democrats, who will have just spoken loudly on the Boehner bill, let the president know that they don't like it and the White House has have more reason to listen to them.

Third, it seemed to me yesterday that the much of the commentary that a deal was close at hand was coming from those who have been the most optimistic all along, that is, they were finally hearing what they wanted to hear and so were trumpeting it louder than it deserved to be trumpeted.

I appreciate your insight

Thanks for this commentary. I find it a useful antidote to the kool-aid being passed around the WashPost and the media in general.

Your point about the most optimistic players dominating the headlines is well taken.

I think part of the reason the media is biased towards optimism is they still retain way too much faith in both the President and the GOP. And they have a vested interest in the outcome.


So in other words... Just

So in other words... Just another day on The Hill


Just getting started

So far the discussion has been almost 100% focused on where to set the threshold for the personal income tax rate to rise ($250k vs $400k vs $1M). When does the rest of the debate take place? Should the rate be 39.6% or 37% or 38%? What about the extenders, the capital gains rate, the estate tax, etc.? What about on the spending side? Thus far, it's an abstract debate about the total amount to cut ($800B, $1.6T, etc.) When does the discussion on specifics of what exactly gets cut and how start?

I'm with you. Barring major unexpected progress over the next 2-3 days, we're going over the cliff. We're already out of time.


Boehner

The Speaker should have initiated his remarks with the statement that "in case you still think I am a capable leader" let me talk about plan B. This guy is going to take us over the cliff with his incompetence. Although, I guess we do have to give some credit to gerrymandering, which gives these Tea Party reps cover, since they face no local opposition.

A fine kettle of fish, Ollie.




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