Monday :: Jul 11, 2011

Understanding the Other Side

by Steve

Obama is set to give another press conference today, ahead of the next meeting at the White House with the congressional leadership over the debt ceiling deliberations. Aside from the challenges faced by John Boehner in dealing with a caucus that is likely to dump him for Eric Cantor no matter what Boehner does, I've gained a fuller understanding of why the GOP is balking, and seeking a smaller deal than the "Hail Mary" Obama threw into the mix.

Strangely, I see why the GOP is holding back their support for the large package. What I didn't know until this morning's Washington Post piece is that Obama's $4 trillion package assumed not only a closing of individual and corporate loopholes, but also the ending of the Bush tax cuts for high-earners. Keep in mind Obama just made the deal late last year to extend all Bush tax cuts through the 2012 election, and here he is suggesting seven months later that these be rescinded for the core of the GOP's base. It's politically reasonable for the GOP to be expected to give up the Bush tax cuts for a major tax reform package, and as part of a grand "fix" package that contained entitlement program changes in Medicare (drug, cost control, and upper income cost sharing changes) and Social Security (tax witholding level and age changes) that Democrats should consider anyway. But it's politically unreasonable to expect Republicans to give up the Bush upper-income tax cuts before the 2012 election, just as it is unreasonable to expect Democrats to walk the plank with their constituencies before the election by agreeing to major entitlement program changes, especially when these entitlement programs are not the source of the debt now being debated.

The Beltway and the GOP are avoiding a discussion of how we really got into this mess and what really caused this debt that is the cause of all this phony wailing. All the Chuck Todd's and the David Walker's of the world don't want to point out that it was the Bush tax cuts, the Bush wars, and the Bush recession that caused the large majority of this debt, yet the GOP wants to slash Main Street programs instead of dealing with the causes of the debt. OK, then let's all agree that the GOP and the media aren't really serious about this issue after all, and instead only want to protect their gains of the last two decades. We'll have to deal with the big issues after the next election, after Democrats message the hell out of this issue and get more Main Street people elected to participate in the next Congress.

What the GOP is looking for now is a return to where the Biden talks left off, which appear to be a deal of about $1.5 trillion of reductions over the next ten years, that mostly involves agency budget cuts and program reductions. Democrats have countered that those reductions were predicated upon GOP acceptance of loophole closings for another $400 billion over that time, and said they won't agree to an all-cut package, especially one that allows the debt ceiling to be made a political football again before the election.

Democrats should not be expected to agree to major changes on entitlements in advance of 2012, even moderate ones like those in the Obama "Hail Mary", but neither should the GOP be expected to anger their base with a rollback of the Bush upper-income tax cuts before the election. It would seem that the way forward would be built upon the Biden package, with the loophole closings that were on the table, but only if the debt ceiling is extended beyond the election.

Steve :: 7:36 AM :: Comments (1) :: TrackBack (0) :: Digg It!