Will Obama take us over the fiscal cliff and then keep us there?

I saw Howard Dean say this on the BBC election night coverage: that going over the cliff is the best policy choice for Democrats. Not as a bluff or a bargaining position: doing it for real, and dealing with the small recession it causes.

But no, I expect Obama to propose a feeble compromise as an opening gambit, and then doing exactly what the Republicans want when they don’t blink.

Because we are all in this together.

Good question. I think Obama should ignore Boehner and focus on splitting the House Republicans while publicly addressing the nation.

Tentative initial signals from Washington on the shameful budget impasse should be disturbing to every patriotic American: Obama appears unable to escape from the errors of the past. The news that he is again entering negotiations with House Speaker Boehner, as though the guy were an equal of the President, sends all the wrong signals.

Obama should be President, not the negotiator dealing with the Congressional obstructionists of the party he just defeated. Reid could do that…or Elizabeth Warren, a Senator who actually knows something about budgetary issues and elite corruption and their social implications. Obama should be speaking to the country, laying out with crystal clarity and brutal honesty the danger of continuing to coddle the rich with such forms of welfare for the rich as a 15% tax rate on unearned income and a historically minimal level of income tax progressiveness. Obama should be speaking publicly and be focused on principles, e.g., the principles of fairness, social justice, and making the selfish rich step up and help their country.

The Republicans, of course, still exist, but only about 15 of them in the House matter – the first 15 Obama can recruit to support his program. Obama wasted four years trying to join the opposition. When will he learn that the opposition does not want him? Rather than empowering Speaker Boehner, who has already spoken clearly about his continuing refusal to stop protecting the rich, Obama should focus on splitting the opposition. All 233 House Republicans are of course up for reelection in two years. Obama has two years to convince their district voters that they are blocking economic recovery. Getting 15 votes out of 233 should not be beyond Obama’s powers of persuasion. That requires a clear message to the public, however, not a picture of the President of the United States cutting some unprincipled deal with a defeated Republican lackey of the rich. Right now is Obama’s last chance to demonstrate his willingness to lead.

From a defense budget analyst perspective, this seems somewhat unlikely based on other actions by the administration. As a general rule, the line from the administration has been to not plan for sequestration, which substantially increases the trauma of any discretionary cuts as they would be applied in an unthinking manner. This is widely interpreted to be an attempt to strength the administration’s bargaining position by making sequestration cuts appear more unpalatable.

If sequestration does happen, last minute planning and various budgetary tricks I’m sure will be used to buy time and quickly apply the planning that was avoided. However, this isn’t really something you can bluff on. If sequestration does hit, it will hit harder as a result of the administration’s negotiation strategy. That said, Obama has been quite explicit that it will not hit, suggesting some can-kicking will likely occur in the absence of a deal.

No.

Look just a rumour, and I am searching for confirmation but I read that MSNBC First Look said that Obama will ask that all the Bush tax cuts be extended (for how long?) in the lame duck and leave spending and sequester up to Congress. Rumor says there will be a speech today.

A little evidence that this is where we are going:

Senator Charles E. Schumer of New York, the No. 3 Senate Democrat, extended an olive branch to Republicans, suggesting Thursday that he could accept a tax plan that leaves the top tax rate at 35 percent, provided that loophole closings would hit the rich, not the middle class. He previously had said that he would accept nothing short of a return to the top tax rate of Bill Clinton’s presidency, 39.6 percent.

“If you kept them at 35, it’s still much harder to do,” Mr. Schumer said, “but obviously there is push and pull, and there are going to be compromises.”

http://news.firedoglake.com/2012/11/09/conciliatory-rhetoric-breaking-out-in-washington/

And then we would do “tax reform” in the new Congress.

Irrelevant. The Republicans will continue to hold the budgetary process hostage. Except more often. Certainly every six weeks or so. I wouldn’t be surprised to find them eventually repeating the drama for every news cycle. The Tea Partiers have a thirst for Armageddon and “End Times” and such and won’t be satisfied until they have pulled the Republic down the way Samson pulled down the temple.

I don’t think a Medicare cut is the most likely scenario, though. Probably some can kicking and smaller cuts to important discretionary programs.

7: I think that tax and spend would be very good for the economy. Tax cuts haven’t worked so well. You want the consuming classes to have money in their pockets to boost aggregate demand? Try giving them jobs and paychecks.

We have not been served well by economists.

What cuts to entitlements are in the sequester? I thought the answer was none

That’s right, afaik. There does however seem to be an assumption that if and when there is a ‘serious’ negotiation about these issues everything, including Medicare and Social Security, would be ‘on the table’ in some way.

Btw, the same economist I referred to above made a point that I hadn’t been very aware of: namely, that Obama’s and the Dems’ much-maligned stimulus bill (the American Recovery Act, or whatever it was called) made significant, somewhat technical changes in unemployment insurance that enabled it to function as much more of a real safety net (or part of one) during the post-’08 recession than it otherwise would have. Not directly relevant to the ‘cliff’ discussion, but I thought it was interesting.

Sorry, I was wrong and Corey was right. There is a cut to Medicare – Link. It’s not huge; a 2% reduction in provider benefits, or about $11bn/year, but it would make a difference. There’s no cuts to Medicaid and CHIP, and no cuts to Social Security, but Medicare isn’t exempt.

But I strongly agree with what LFC is saying. If you’re worried about entitlement cuts, it’s the negotiations you should fear more than the cliff. The cuts in the sequester are not zero, but they are much lower than I expect would in any negotiation.

The sequester and the expiration of the tax cuts are two different things. I expect that the sequester will not happen. There are a lot of defense contractor lobbyists in town. The House will pass a bill deferring (or dropping entirely) the defense portion of the sequester; the Senate will modify it to include the entire sequester; the House will reluctantly recede. Obama will sign. Perhaps on New Year’s Eve.

But on the tax cuts, Corey may well be right. Obama today is supposed to reiterate his offer to keep all but the top rate tax cuts, a position which has already been rejected by both McConnell and Boehner: he makes them an offer they don’t accept. Once the tax cuts expire, he has no reason to seek new ones. He can blame them for the tax increase. To the extent that the expiration is recessionary, he has some tools: Bernanke hasn’t completely exhausted his repertoire and he knows what he needs to do to be reappointed. With a different Treasury Secretary (and there will be one), the TARP funds can be used to beef up selected firms’ capital spending.

With Clinton era tax rates in effect, the threat of prolonged deficits is much milder.

We will go over the cliff simply because there isn’t time or will in the remaining Congress. With the new Congress he will offer extensions on tax cuts though with different end dates in exchange for an increased debt limit and deferring and phasing in spending cuts, but don’t expect him to abandon them. He wants to gradually tighten fiscal policy but only as fast as the economy can absorb it. The problem is the economy can’t absorb it so without renewed stimulus we may have another recession. Congress has more to fear from a certain recession than a possible one so will accept a deal.

Now that I look, I see that Howard Dean has been saying this (“Let’s go over the cliff”) for a while, here he is in August.

Tied up with the “fiscal cliff” fight is the next debt ceiling crisis. The current debt ceiling runs out near the end of this year, and judging by last time, the House will hold it hostage for concessions and the Democrats will give in to demands. Though both sides may well postpone the big fight till the next Congress in January.

I think Obama is smart enough to see what austerity policy (and that’s what the fiscal ‘cliff’ is, a big ol’ austerity package) has wrought in Europe.

Once he no longer had any elections to fear, we were told, we would see the REAL Clinton, Blair etc.
—

Nobody said that – certainly not about Clinton. However the failure of so many predictions of Obama’s impending destruction of the safety net seems utterly irrelevant to the appeal of issuing those predictions.

Its absolutely bizarre to see the “left” buying into GOP caricatures of the left being mindlessly obsessed with government expenditure. Berwick left office stating that 1/3 of Medicare spending is stolen/wasted, which I think is a solid estimate, yet “the left” seems desperate to make sure that giant hospital chains and medical equipment franchisers keep raking in tax money.

Obama just gave a reasonably promising statement trying to frame this as “everyone wants middle-class tax cuts, so let’s do those and then fight about everything else later”. The cliff gives the Democrats a huge advantage because they can promise tax cuts for everyone relative to current law and still end up with higher taxes on the rich than we had before. There is clear panic over on National Review about this; they didn’t even come close to accurately reporting what Obama said in his statement. My feeling is that the Democrats win the fight on taxes and then trade undoing the defense cuts for undoing the discretionary spending cuts, and we end up with no sequester and higher taxes on the rich.

And I’m with rootless just above @30. The Democrats held strong on the debt ceiling, even after the US’ credit rating got downgraded. Republicans started getting panicked calls from influential people and had to back down, granting a debt ceiling increase that would last through the election and getting no changes to then-current policy. Someone arranged for them to save face with this fiscal cliff thing, and the consensus now is that the fiscal cliff puts the Democrats in a better position than they were in before.

That said, Boehner’s going to be under a lot of pressure not to negotiate at least until the start of the year, since Cantor’s gunning for his job.

Cory you appear to agree with the GOP that Democrats simply favor spending without any interest in how the money is spent – that’s not a position that most Democrats accept.

But if your argument is that Democrats gave into GOP demands that the Bush tax cuts be allowed to expire and that there would be massive Defense cuts and cuts in Ag subsidies if any discretionary funds were cut at all and that Medicare/SS/Medicaid would be pretty much protected from those cuts, have at it.

Dayen is parsing the same way that numerologists are adding. And he has a similar track record of accuracy.

40 see comment 10 above

I bet a deal is almost done. The Bush tax rate schedule is permanent.

Until the next Republican Government.

My bad. I very much misremembered what was in that first tranche of cuts.

The classic example is the Pell grant budgeting which has actually increased greatly – EXCEPT that diversion to for profit schools has been cut.
Apparently profits for Kaplan are a liberal fundamental now.

Most of the decrease in Pell spending was for students who attended for-profit institutions, which accounted for $1.4 billion of the dropoff. For-profits have been battered by slumping enrollments, and the number of Pell recipients attending for-profits declined by 108,000 students, to roughly 2.1 million.
Other sectors, however, saw increases in total grant funds. Community colleges and public four-year institutions received slightly more in Pell revenue, while private colleges saw a small decline. The number of Pell recipients increased at public four-year and private colleges, while slightly fewer students at community colleges received the grants.

Read more: http://www.insidehighered.com/news/2012/09/07/pell-spending-declines-despite-growth-grant-recipients#ixzz2BlQGbCEI
Inside Higher Ed

Two more interesting examples. Cory and others have denounced Simpson-BowlesChairs SS recommendations as horrific betrayal of liberal principles apparently without ever reading the report. Recommendations do include increasing retirement age (which I oppose) but: (1) retirement age is already slated to increase via an agreement pre-Obama that for some reason was not a horrid betrayal of liberalism (2) they propose 20% of retirees, those from physically demanding jobs, be permitted to retire at 62 – lower than current law will allow for most of us and (3) they propose that low income retirees be boosted up past poverty rates. Note that those who claim to be the authorities on what liberals should support have not even bothered to discuss these provisions. Apparently the regressive and unfair nature of existing SS rates and benefits is sacrosant for liberalism.

Second, Don Berwick’s departure statement from Medicare included the claim that 1/3 of Medicare spending is wasted or stolen. When Obama speaks of possible medicare cuts he always insists on cuts to providers not in benefits – clearly he buys into this theory. Yet the Liberal Authorities not only never discuss this theory, but they insist that any cuts to Medicare are heartless neoliberalism at its most inhumane because, apparently, payments to pharm companies and for profit hospital chains are also sacred.

Just as Obama might be able to offer the R’s a face saving tax increase for the rich with deduction caps only, I imagine he might have to swallow a stealth-regressive benefits cut, like raising the SS retirement age. As no-one outside of the policy wonk-o-sphere appreciates just how regressive that is, it is perfect political cover for horse trading with the R’s.

rootless (@root_e) 11.09.12 at 8:40 pm:
‘Its absolutely bizarre to see the “left” buying into GOP caricatures of the left being mindlessly obsessed with government expenditure. Berwick left office stating that 1/3 of Medicare spending is stolen/wasted, which I think is a solid estimate, yet “the left” seems desperate to make sure that giant hospital chains and medical equipment franchisers keep raking in tax money.’

They are told that this is the price they have to pay to get anything.

@53: If you didn’t pay any attention to his explicit policies on ending upper-income tax cuts I can’t help you. At some point there is a minimum degree of knowledge required for intelligent discussion.

57 refers back to my 55

I think it may help to remember that no policy is ever permanent in a democracy, so politicians will assume that the next President or Congress may change course anyway. So what they want to do is set up the next argument. Part of what the Dems accomplished, in agreeing upon spending reductions, was to set the blame upon the Republicans if those cuts ever took place. And why were the Republicans willing to agree to that? The Republicans were willing to kick that can, because they honestly thought they’d be dealing with a new Republican President, so they could just rewrite the whole thing, and pander to their own necessary constituencies such as Wall St. They didn’t figure on this. That is why Obama is unlikely to acquiesce to extending the tax cuts for the wealthiest. “Breaking the Republicans” on revenue increases comes right out of the debt-ceiling debacle last year, and sets up an important rhetorical principle going forward, because the economy is going to get slowly and surely get better (ceteris paribus, and barring a foolish move into austerity). Then Obama and the Democrats will take the credit, and it will happen AFTER increasing taxes on the wealthy. Establishing this point as a principle of economics — i.e., refuting supply-side Reaganomics once and for all with a new historical example (after the Clinton example, something that Bill has been at some pains to point-out in stumping for Obama) — refuting supply-side Reaganomics, is a very good thing to achieve. Because then we can start demonstrating the argument that government goods and services are sustainable if they are paid for annually, and such taxation does not hinder economic growth — in fact it may aid economic growth in certain needed sectors like the medical sector. I do not write, “refuting supply-side Reaganomics” for a snarky bunch of boneheads who might show up int these comment threads and will reply, “We already know that Supply-side Reaganomics is nonsense. So what?” Please try to remember that everyone isn’t quite as brilliant as you, and that a lot of the voting population cannot follow an intellectual argument in economics, but it understands the apparent reality. Indeed they may soon find that “fiscal cliff” presents no danger at all, even if we go over it for a few months — but EVERYONE is going to know that the Republicans are holding up the middle-class tax cut extensions. Look at the headline front-screen at the Washington Post, this very minute: “Obama calls on Congress to freeze middle-class tax rates immediately” A very nice move, close to checkmate.

The consensus here seems to be that Obama is ok waiting the Republicans out. I’m inclined to agree, even as a progressive, because I don’t see the miniscule entitlement cuts in the sequester as really damaging those institutions.

The problem is that Obama has a number of other issues that he *wants* to get to: immigration reform, climate change, etc. And in order to get anything passed on those issues he is going to have to use to call out Republicans for stonewalling. The problem is that if the media is too busy talking about the excitingly-named “fiscal cliff,” that likely means no progress on other progressive issues.

So I would say that Obama should do the fiscal cliff dance for another half-week or so (maybe explicitly setting an end point for those discussions) and then get the ball rolling on either immigration reform (citing the election) or climate change (citing Sandy). Alternatively, if he has some sort of plan of action on the economy hidden up his sleeve, now might be a good time to roll it out.

Rootless, stop arguing like a Republican “unskewing” the polls.

I guess I should take up DDayen level numerology and point out that while Obama has actually increased medicaid, following the Fibbonacci sequence to pick letters in Obama’s book and rotating them through the Gaelic translation of the General Theory backwards we learn that he dreams of destroying FDR’s legacy.

What’s most endearing about Dayen is his theory that duplicitous Obama needs to craft statements of support for social services with escape clauses. Apparently he’s going to eventually shout out something like “you didn’t pay attention to the number of the preposition, ha ha you blind fools” while killing Social Security. This is because statements by politicians are absolutely binding and must be subtly worded to allow the magical contract to be broken. Or something.

Based on the record of the last four years, I wouldn’t expect Obama to do much but react to events. This isn’t really even meant as a criticism, as US politics and public policy making has gotten so dysfunctional that the only grand projects either side ever pushes through are invariably bad ideas that would have been better left undone. Dubya made all sorts of bold strokes, every one of them a fiasco.

Obama has done better by not doing much but reacting and counter-punching. I would say that’s a fair characterization of even his supposed signature grand project, the ACA. I work in the field, but I have little sense of what it is even supposed to do, or what problem it was designed to address. “Designed” seems overly charitable. It is more like its various features accreted under the pressures of its environment, as responses that insured its survival up to the point of its eventual birthing. Maybe it will thrive, maybe it will go extinct — who can know? But perhaps that’s the best we can do right now. We can’t design and build anything that makes sense as a plan for organizing the financing of health care on any sort of rational basis, anything like either National Health Insurance or a National Health System, we can just throw some embryonic form together, launch it into a hostile environment and hope it adapts and survives on its own. Evolution over Intelligent Design!

I have to admit that I am not very optimistic that this way of doing the people’s business will work well with health care financing, but much, much less so with the matter at hand, this bogus fiscal crisis. We got to this sequester precisely because just reacting to events failed, it let us get backed into a corner. Undoubtedly the difference is that health care financing is in crisis because impersonal (to some reasonable approximation) markets failed, while we have an all-too crafty, if not exactly rational, adversary actively seeking to bring about the failure of our fiscal regime. They are the folks with the grand project here, and if you are going to speculate about what anyone will do, you need to start with them. Our side will just be reacting to what they do. So far that has gone badly, and I see no reason to expect that will change. I will be happy to be surprised, I will be happy if Obama does anything beyond just reacting. Well, anything except joining the other side’s grand project.

Lee, I’m half with you, but the inability of a current Congress to constrain a future one is asymmetric in effect, because the Dems will feel at least somewhat bound by their agreements, and the Repubs, as they proved by trying to strip just the military provisions from the sequester, will not. Hence, a Grand Bargain is Grand Tomfoolery for the Dems.. Also, I don’t see how agreeing to cuts sets up the Repubs to take the blame; it means the Dems are signed on and have to sell the result. Anything substantially bipartisan is pretty much beyond attack.

I do agree with breaking the Repubs on tax increases though. The Repub move now seems to be capping deductions. That can be good or bad, but I fear bad. Specifically, charity and arts funding in this country is largely subsidized in this indirect way, and all sorts of valuable non-profits will fail if the donations writeoff is touched.

@67: Yes, he’s just promised to veto any bill that extends the Bush tax cuts for wealthy Americans. Do *you* pay attention to what he says?

Bruce Wilder, @69

Our side is mostly defined by opposition to the folks who, these days, are the people with the grand projects. That would be the Republican Party and conservative movement. The roles were reversed 70-80 years ago, and perhaps between then and now, you could define another sort of period, during which nobody had grand projects or, (and I’m thinking of thr Cold War), the grand projects were bipartisan.

Of course, it is a defining feature of a “side” that is, as ours is right now, essentially reactionary, that it is heterogenous in terms of what it’s for. We’re against the people who are at war with sense and reason, but we often have quite different reasons and sensibilities.

Which is all a long way of answering that I have no idea what Obama is for. It is quite possible that he isn’t for much except stopping the Republicans. Not that I see that as a downside. Not much is clear in politics and public policy, but the idea that people willing to win elections by starting wars and appealing to racism need to be sent to the showers seems to me to make the cut of clear and obvious things that reasonable people should be able to agree on. My dissatisfaction with Obama is based less on where I think he might not be for what I’m for, than on his often not being very good at stopping the Republicans.

But I don’t read back from his failures at stopping the other side’s grand plans, the conclusion that he must be secretly in league with them, that he must share their ideology. Take this sequestration deal that is the cause of this “fiscal cliff” that is the subject of this thread. I thought, and wrote, at the time of the debt ceiling shake-down by the other side, that the administration should have simply refused to negotiate with the hostage-takers, and Treasury should simply have ignored the ceiling and carried on issuing enough debt to cover the legal obligations of the US. Had more people agreed with me, perhaps Obama would have felt that he could do this, but our side, again, almost by definition, doesn’t go in for grand schemes and grand gestures. Obama is no Andrew Jackson, but our side is also not the Democratic Party of 1830 — and, all in all, that’s almost certainly for the better.

So, sure, you can see in the sequestration deal that Obama did instead of defying Congress, evidence that he agrees with the Rs, that he and they are basically both corporatists or something. You could be right. But it’s also possible that Obama is simply no Andrew Jackson, that he did not feel that breaking the debt ceiling law — however much breaking that law might have been necessary to following all the laws requiring Treasury to honor the just debts of the US — was something that our disorganized, purely reactionary, side would support. So he did something ill-advised, got us trapped in the present “fiscal cliff” dilemma, by agreeing to this sequestration deal.

Every member of Congress has an interest in avoiding a second recession. Every member in Congress will want to make a deal, and will work to do so (I should say almost every member – this is Congress we’re talking about, after all).

So even if I grant your view of Obama’s policy preferences (I don’t agree with your view), Obama still must be an active and constructive player in a deal if he wants to remain on good terms with either party, and for that matter with the public generally. If he cares at all about getting other policies through Congress, about having sufficient political support on a range of foreign policy initiatives, about his legacy, about his reputation, he’ll try quite hard to make a deal.

The White House has sent every signal possible that the sequestration defense cuts won’t happen – from the President’s public comments to the Department of Labor’s directive to military contractors that they need not issue warning of layoffs resulting from the sequestration cuts because those cuts are highly unlikely to occur – indeed the US Government has indemnified military contractors for any liability they may face for not issuing such warning notices.

I see a deal as the most likely outcome. In fact, with Obama in his second term, and the GOP doing some re-thinking, I’d place the risky wager that we’ll see more cooperation generally between the two parties in Congress.

@76 if you think that GOP congressmen can nonchalantly look at the prospects of e.g. a $4B to air force procurement then you are kidding yourself.

Meanwhile many of the human services cuts are nonsense – like the $4B not being paid into Medicare part A insurance -something that has no effect except on an accounting measure.

” If it were such a great idea for our side, why did we have to be black-mailed into it? ”

This is assuming your conclusion.

“Why did the Rs risk being perceived as willing to push the US into defaulting on its just debts, just to get Obama to agree to something so much in our favor?”

Because they had assumed he would cave and got really close to the deadline and panicked. Wall Street was NOT HAPPY with this game.

But the “public blackmail” is not a fact, it is an invention of the “progressive” echo chamber. The bare facts are very clear: GOP attempted to extort major cuts in social services by holding the debt limit hostage. The administration gave in on nearly nothing – marginal bits here and there, nothing like the slashing of Medicaid, the ending of Planned Parenthood funding, all the poison pill legislation etc. that they began by demanding. The GOP, under immense pressure from Wall St. gave in and not only extended the debt limit, but extended it way past the election. They also agreed to a sequestration trigger that they claimed was a win, but even at the time, many observers noted was a disaster for them. Romney agreed:

“I thought it was a mistake on the part of the White House to propose it. I think it was a mistake for Republicans to go along with it,” he adds.

The debt-ceiling deal was forged by Senate Minority Leader Mitch McConnell (R-Ky.) and Vice President Joe Biden hours before the United States was set to exceed its debt ceiling and begin defaulting on its obligations.

Of course, at the time Boehner claimed a win and people like Dayen who believe everything the GOP says swallowed it whole.

But now even Krugman has figured it out:

It’s worth pointing out that the fiscal cliff isn’t really a cliff. It’s not like the debt-ceiling confrontation, where terrible things might well have happened right away if the deadline had been missed. This time, nothing very bad will happen to the economy if agreement isn’t reached until a few weeks or even a few months into 2013. So there’s time to bargain.

More important, however, is the point that a stalemate would hurt Republican backers, corporate donors in particular, every bit as much as it hurt the rest of the country. As the risk of severe economic damage grew, Republicans would face intense pressure to cut a deal after all.

and he is not the only one.
http://www.businessweek.com/articles/2012-11-07/obamas-holding-the-cards

But if you start your analysis from the axiom that the Democrats always suck, you reach the conclusion that they suck. That’s just not a very illuminating way to go about an analysis.

Looking a little way ahead, it’s interesting that the Repubs seem to be convinced, for now, that the 2014 midterms will be a replay of 2010. My thought is that, if the US goes over the cliff, fails to raise the debt limit etc, the public will be looking for someone to blame, and the House will be the only one on offer. If Obama hangs tough for the next two years, and filibuster reform goes through, he could easily spend his last two years with a majority in both houses.

However, I don’t think he will hang that tough, and I’m not sure he really wants a majority.

FYI

http://www.businessinsider.com/report-boehner-tells-gop-house-members-to-avoid-a-major-showdown-2012-11

Gerrymandering is over-rated, IMHO. The central idea is to lock up your opponent’s vote in a few safe districts, while spreading your own more thinly. But that runs the risk of a complete wipe-out if the swing against you is bigger than anticipated. For example, a uniform 5 per cent swing in the three states you mention would (by my count) gain 11 seats for the Dems. That would be most of the way to a House majority.

To look at it slightly differently, the House vote was divided almost evenly, and the Repubs came out with a majority 0f 40. Taking that as the headstart, the Dems have to do about as well as they did in 2008, or as well as the Repubs in 2010 to get a majority.

A reliably liberal majority would need a slightly larger majority to avoid dependence on Blue Dogs and/or old-style Southern Democrats. But it looks as if there will only be a dozen or so Blue Dogs in this Congress and hopefully some of those will be primaried out next time. I’m not so sure about Southern Dems, but there can’t be many left. Taking account of the departure of Nelson, Lieberman and others from the Senate, a Dem Congress would present Obama with plenty of challenges as well as opportunities if he chose to take them,

On wanting a majority, I think his position on the primary challenge to Blanche Lincoln was a real tell. To recap, Lincoln had opposed the Employee Free Choice Act and the Public Option, threatening to join a Republican filibuster of the latter. Accordingly, progressives and the unions backed a primary challenge to her from Bill Halter. Polls showed Lincoln was doomed in the general. Halter was also behind, but was the stronger of the two in the general, according to the polls. Though Obama stayed out of it, his chief of staff Rahm, backed Lincoln and taunted the unions after she squeaked through in the primary (to badly lose the general, as expected). He was willing to undermine the bparty’s prospects rather than see a successful primary challenge from the left.

It makes sense for the centrists to betray the party. Their agenda and their own power is best maximized by a closely divided government with their party in a slight majority. With Dems holding the White House and Senate, not holding the House keeps the aggregate majority effectively “slight”. I posted about how this is precisely what one should logically expect from centrists years ago here:

http://www.dailykos.com/story/2006/11/13/270762/-James-Carville-Why-Centrists-Logically-Become-Traitors

The campaign of George McGovern, the only real progressive Democratic candidate we’re had in the post-war era, was a great illustration: many prominent democrats allied with Nixon against him.

For example, a uniform 5 per cent swing in the three states you mention would (by my count) gain 11 seats for the Dems.

Um, I’d ordinarily defer to political science expertise here, but I wonder if you are aware of the composition of the more Republican regions of Michigan, Pennsylvania, and Ohio. A uniform 5 percent swing that includes the most reactionary theocratic elements of the modern Republican Party? Against the continuing drumbeat of Fox News and the Religious Right declaring that America is doomed if the far-left fundamentalist Muslim has a free hand? How about flying unicorns, while we’re at it? I would note that the off-year Republican-controlled redistricting of Texas did a fine job insulating that state from any massive swing in 2006 and 2008 (E.g., Nick Lampson lasted only a single term in TX-22). One merely needs to make a few districts overwhelmingly Democratic, while being sufficiently confident of one’s base in the other districts. And as Steve King and Michele Bachmann, among others, demonstrate, that confidence in the GOP base is not usually misplaced. Indeed, even as Minnesota, Oregon, Colorado, and New Hampshire voters took steps to correct 2010’s state legislative outcomes, the Ohio legislature remained firmly Republican, and even plans to reintroduce controversial abortion-banning legislation next week.

So one could attribute the status quo to Obama’s desires, and even his machinations, or one could decide that it’s merely a political reality he’s stuck with. Either way, its existence will have to factor into any Democratic plans to deal with the fiscal gentle incline, the debt ceiling, etc., for the next four years at a minimum.

(And yes, if anyone were even to remember this, I’d be setting myself up to eat crow if 2014 turns into the year where massive gerrymandering and the general off-year election trend don’t matter. If, for instance, the House goes ahead with impeachment for being a Kenyan usurper who wears the wrong brand of socks, all bets are off. In which case, I’ll happily leave the feathers on.)

People ‘clearly’ misunderstand Obama. He is not anti-energy (look at how much oil/gas we produce), he is not anti-war (we’re still in Iraq and Afghanistan and we’re droning the heck out of more countries than you can count), he is not anti Wall St (look at the stock market), he is not anti Main St (look at his bailout of the auto industry and loans to startups), and he is not a wild and free crazed liberal (look at his anti marijuana activities). I suspect people have just listened to all the anti-Obama rhetoric from the right wing over the last few years. He doesn’t respond much to criticisms unless he has to (consider his lack of response to the Birther silliness.) In fact, he really is into compromise. Remember how as a new President he actually used to walk over to the Republicans to reach agreements until he realized it was a wasted effort? We will see a compromise on the fiscal cliff that includes some tax increases and some modifications to ‘entitlements’. This is how politics has worked for ever. Don’t expect a big deal resolution. Expect something that both sides can live with, which won’t fix our problem anyway. BTW, I’m all for jumping over the fiscal cliff. Only then will we get anything like real action.

“Obama’s priorities have been exactly those he outlined in his 2008 campaign.”

Is this, in your opinion, a unique quality of Obama – that he does exactly what he said he’d do – or is this true for most politicians?

Apologies for the speculation on whether Obama really wants a majority. Operationally, I don’t think it makes much difference – he’ll decide to fight or not depending on whether it looks like a win for the WH, and that’s much the same as a loss for the House Reps, unless he still believes in the idea of a grand bargain.

Or, to put it another way, if you can pack the members of one party into 75%+ districts, which is easy with modern computers and US racial voting patterns, then you can keep them in the voting minority almost indefinitely.

@83,

Only a fringe on the other side actually wants the sequester to go into effect. Of course defense contractors and other highly influential actors don’t want the cuts. Almost no one does. But that’s the whole point of the sequester, to be something so universally undesirable that both sides would agree to serious deficit reduction in order to avoid the sequester being triggered. The other characterization of the ceiling “crisis” and this fiscal cliff “crisis”, is as a game of chicken, with both sides wishing to avoid collision, but both also motivated to create the impression that they are too insane enough to accept a head-on crash to avoid losing.

That’s how you win a game of chicken, not by causing a crash, but by using your “superior” willingness to tolerate a crash to get the other side to back down before the crash, and give you what you want, which is not a crash. If the Rs had actually wanted to push the US into default, if they actually wanted the sequester cuts now, there would be no point of negotiating with us, because they could and can force those results just with their House majority. They want something else, but here’s where it gets complicated, in that it isn’t clear that they really want anything beyond pretty negligible spending cuts (certainly nothing big enough to offset the further tax cuts they also want, much less actually get any deficit reduction done), vs, they are just using a fiscal “crisis” that they realize is quite phony, in order to get an end to SocSec and Medicare the only politically viable way, by getting the Ds to jump off that cliff with them. Since not-obviously-crazy observers expect some degree of just that happening, our side agreeing to some degree of “reform” of the social safety net in order to make the sequester go away, I think you have say that the other side has been successful at this game of chicken.

The problem, from our side’s point of view, with the rules of this game of chicken we set up when we agreed to the sequester, is that there is an asymmetry of things at risk. They were given a hostage of domestic spending that at least some of their crazies might not be averse to killing, and a majority are not categorically averse to killing, while our side was given a hostage, defense spending, that almost no one on our side (in power, in Congress or the WH. There’s always DFH America-haters such as myself who must want to see al Qaeda murder all of us in our beds, or how could we want one penny of “defense” spending taken away?) values less than their mother’s lives. So Obama and every other D (in power) who has said anything on the subject has made categorical statements of utter fealty to not tolerating one penny of defense cuts. That sort of takes away any credibility that our side won’t swerve first. We’ve already sworn blood oaths, in public, to do just that. It’s not that their side is at all willing to offend defense contractors, it’s that our side has assured them that it will never actually come to that, because we are determined to give them something to prevent the head-on collision.

Just to complete the picture as I see it, because of the election, even though they could extort something from our side because we did not get the trifecta, and can’t just can the sequester law on our own, they may no longer wish to press that advantage. For one thing, as already referred to, most of them don’t really want deficit reduction, and many of them don’t want to end the safety net, and a recurring pattern since the ceiling crisis, is that their side can never close a deal because they are only united insofar as it’s been purely to humiliate our side, purely as a wrecking maneuver. They divide as the prospect looms that they have won, that our side is willing to give them something, because they don’t really want anything but for our car to crash. Since the election, they fear that too-obvious delight in wrecking may be bad for their electability. Boehner may not actually have been just blowing smoke on the conference call when he called on his caucus to not stage any crises this Congress. Had they got the Senate, they might have thought that this is the time to extort the Grand Bargain that ends the social safety net, and the sequester is the means to that end. But they didn’t get the Senate, they were turned back, and they have some fear of being seen as extremists and bomb throwers. I see them cooling it at the federal level, and trying instead to use their control at the state level, especially where they control states that are blue in federal elections, to get more effective and broader-based voter suppression in place so that these states will not vote blue in the future, will not slip ever further from their grasp with demographic shifts. I suspect that the demographic cliff, not the fiscal cliff, is where the next battles will be. And those battles will be at the state level, since our sorry excuse for a constitution leaves voting eligibility to the tender mercies of the states.

Of course they will still make some effort to get something out of the sequester. I just doubt that they will press it too far, will be willing to stage too much of a fight, or want to be seen as more willing to crash both cars. Therefore, our side should give nothing, and insist on a simple, clean and unencumbered repeal of the sequester as the only way back from this phony “fiscal cliff”.

Let’s look at what the so-called “fiscal cliff” actually consists of:
* End of the Bush tax cuts, and a return to the Clinton-era tax rates.
* End of the temporary payroll tax cut.
* The “sequester”, which is a package of cuts for both the military and domestic discretionary spending.
If nothing is done by Congress, all of the above will happen, since it’s already codified in present law.

Now, from a progressive standpoint, what I want is to keep the middle-class tax cuts (both payroll and income) at least temporarily, while ending the tax cuts for the rich. I also want the military spending cuts to go through, but the cuts in domestic discretionary spending to be repealed.
However, since there is currently a Republican House of Representatives, that isn’t all going to happen. The question becomes whether we can make a compromise that is better than the default option of just letting the “fiscal cliff” take effect. Paul Krugman contends that given Republican intransigence, it might be better to just let the cliff happen, and I tend to agree. The fact is that letting it happen gives Democrats more negotiating leverage. From a political point of view, Republicans are going to have a very hard time justifying a vote against bringing back the tax cuts for the middle class (I can hardly wait to see what contortions Grover Norquist pulls to explain this). From a policy point of view, Republicans really, really care about extending the tax cuts for the rich. Let’s see how much we can get out of them in exchange for another extension of a couple years. Just agreeing to rescind the existing cuts to domestic spending is not enough; we ought to demand significantly more. We know they want it badly; now what are they willing to give up to get it?

If it were just the media reporting that Dems are likely to trade away the safety net, if only under the name of “reforming” it, then I would certainly expect angry denunciations of that idea from the Dem leadership, I would expect statements as categorical that they will not yield an inch on the safety net as what we’ve actually heard from them about not yielding an inch on keeping defense spending 100% intact.
—

So your complaint is not about what they do, but about how their public marketing is not what you want. But angry denunciations don’t work with this public. It’s not the job of the Administration to meet the marketing expectations of “the left”. Here is an administration that won re-election despite a disastrous misstep, billions of corporate money used against it, and a massive campaign of voter suppression. Maybe, just maybe, they have an idea of how to communicate their message that is not stupid.

The record of the negotiations last fall, after the summer deal was brokered, aren’t very promising.

Agreed. Which is why the going over the dreaded cliff seems like the least bad of the available options. More Republican intransigence please!

(Also, I can’t seem to figure out why several commentators think that blockheaded Republican nay-saying makes Obama some kind of master negotiator. *That* sounds like 18-dimensional chess or whatever.)

Oops. The first sentence in 108 was supposed to be blockquoted—quoting CR @106.

It’s not unusual in business and political negotiations for sides to make offers they know can’t be accepted:
X demands A
Y offers A if it gets B knowing X is allergic to giving B
Y has now demonstrated reasonableness and, especially, if X is representing someone else, weakened X’s position with respect to X’s client (in this case the House GOP, the GOP donor base and the electorate).

This is not rocket science and it happens every day. As with any field, people who don’t know anything about it might think it makes little sense.

Amazing reading this from Portugal.
It is all speculative cargo cult Keynesian economy.
You all don’t have a clue of what will hit you.
Do you think dropping Bush tax cuts fixes anything?
Any of you made any arithmetic operation about your own country spending?

“Will Obama take us over the fiscal cliff and then keep us there?”

Or rather will Boehner do this? Takes two to tango. Why not just title it “Will Obama sell-out as we’ve been predicting for 4 years?”

It will be interesting to watch what happens and how CrookedTimber/Digby/Firedoglake and the progressive echo chamber react.

@113

What good is “demonstrating reasonableness” in secret negotiations that only get leaked a year later?

Because it played out to the public as willing to make deep cuts. And, according to polls, it worked.

Especially if it’s even not clear that Obama would have been able to sell a deal that cuts that much to enough Dem legislators.

Obama would have had to be stupid to expect Boehner to go for this deal. He could have offered ANYTHING and Boehner would have balked – because the price of tax increases on the wealthiest was beyond Boehners ability to accept.

Boehner had earlier accused Obama of offering things only to rescind those offers soon after. If this is what Obama was offering than maybe that accusation is credible (though, Boehner was likely forced in the same position by Cantor and friends).

Here’s a shocking tip, neither party was negotiating in good faith. The objective of the Democrats was to chip away at the “deficit cutting” GOP brand.

Of course, what’s in question here is not Obama’s skill at negotiating or electoral prowess. What’s worrying is the kind of position that Obama apparently felt was acceptable back then.

Worrying to you – but you started with theory that Obama was going to destroy the social safety net and then, by dint of logical tautology, you concluded with the same thing! Astounding

@Professor Robin:

112: Which is why this was a top-secret document for over a year. It’s a wonder no one’s paying you for these kinds of insights. Or maybe they are?

Embarrassing really. Is that the best you can do?

And the guileless swallowing of anything Mr. Inside Official Leak pours is also impressive. No wonder you were longing for a GOP controlled Congress not so long ago.

Because it played out to the public

Assuming these documents aren’t forged, we’re talking about an offer that wasn’t public.

Worrying to you – but you started with theory that Obama was going to destroy the social safety net and then, by dint of logical tautology, you concluded with the same thing!

False, I neither started with that theory nor reached that conclusion. If I thought that Obama was going to “destroy the safety net” then I never would have canvassed for him. You quote my words, but your responses seem to be directed at someone else.

@CR
I’m actually not so concerned about defending Obama as in trying to figure out how to counter-act the destructive faux-leftism that has displaced any critical thought with goofy chicken-entrail reading, cut-and-paste defeatism, and naive channeling of corporate media. We went though a major financial crisis where the “left” was reduced to puffing Paul Volcker.

But your resort to the common ad-hominem, is still a pathetic moment.

@122 But the material leaked out earlier, hence stories about Obama’s willingness to compromise. The documents from Woodward are about as new and explosive as DDayen’s esoteric readings of Obama’s statements.

BTW: The document specifies such horrible things as boosting low income SS, slashing Ag subsidies and oil and gas research and cutting a lot of tax subsidies.

It strikes me as a bad idea to make a bad faith offer on the assumption that bits of it will leak and make you look better. In particular, it probably won’t make you look better if members of your own side lash out at your proposal when you’ll probably need their votes to pass the thing.

I think Obama is smarter than that. He took advantage of plenty of public opportunities to express his willingness to compromise and reform entitlements. But when he was making proposals in summer of 2011, he was sincerely looking for a Grand Bargain that could get through Congress. Fortunately, no such bargain existed.

Second, characterize those positions correctly; missteps like 48 and 120 undermine you and your efforts.
—

Thanks for the advice on how to argue. I will ask my employer at Obot HQ if I can take it into consideration.

Is there any reason to think the Woodward document actually reflects the position of the Obama administration as a whole? It is clearly a draft (with placeholders used for various figures throughout), and could easily have been created by one or more administration individuals as a proposal to the President, not as a final offer. For all we know, Obama could have asked more than one person to each create their own proposal so he could choose between them (didn’t he buy into the whole Lincoln “cabinet of rivals” stuff?) Alternatively, it could have been a last-ditch contingency plan if all other methods to increase the debt ceiling failed – it would be a crappy deal, but quite possibly better than a U.S. default on the debt.

Josh G.@130, those possibilities make sense to me.

However, there are a lot of sources that claimed Obama had offered a raise in the Medicare eligibility age as part of a deal. In addition, it seems to be something other Democrats are okay with–Rep. Van Hollen said he would consider it a couple of days ago. A lot of constituencies would be happy with it (e.g. current retirees, insurance companies). It has a superficial plausibility to it–people are living longer, right? That it would be highly regressive (not everyone lives longer) and concentrate a great deal of fiscal pain on a vulnerable slice of the population is getting a disturbingly small amount of attention, especially now in the afterglow of electoral victory.

Here, btw, is Dean Baker pointing to evidence that the long term fiscal problem has been greatly exaggerated–

link

However, there are a lot of sources that claimed Obama had offered a raise in the Medicare eligibility age as part of a deal.
—

As I pointed out before, in order to believe that such an offer (if it was made) was substantive you would have to believe that the GOP would have accepted major tax hikes on the wealthy and corporations – or that Obama believed they would. Do you hold either belief?

@129 ” All of the Bush tax cuts would be kept.”

Where do you see that?

Your dismissal of people’s arguments by their past “track records” at 32, 40, 45, 64 is ad hominem. (
—
No. Look up the definition.

“Who said “your argument can be discarded”? ”

Ha ha. What is it with the bad faith parsing?

“It would have cut individual and corporate tax rates even further–how are you supposed to cut rates without keeping the rate cuts we already made?”

You did not read the Woodward document. You just assumed it supported your forebodings. Circular reasoning is dull.

To summarize the argument: Obama said he wanted a grand bargain, the GOP wants the grand bargain to eviscerate the social safety net without changing a tax system that generates wealth inequality, since we believe the GOP to be strong and principled and the Democrats to be weak and unprincipled – WEEEP WEEP.

Same fucking litany over and over again. The HandWringing Party at work.

“No. Look up the definition.”

Yes. Look up the definition. You did not point out a logical error in the argument, you just attacked the person making it.

And that was only one of the examples I listed (and I got sick of re-reading your nonsense halfway down).

“What is it with the bad faith parsing?”

That wasn’t parsing, it was quoting. I quoted one of many instances on this thread in which you attributed words to people they didn’t say. Who said your argument can be discarded? You repeatedly called people, including me, (not just their argument, but the people making them) stupid or naive, and discarded their argument, including mine, for that reason. Ad hominem describes most of your writing in this thread.

“You did not read the Woodward document.”

No, you didn’t. Go the the “Expedited Process for Consideration of Further Deficit Reduction”, Section 2, first and third bullet point.

You were too damn busy singing the praises of lower discretionary spending caps and Medicare cuts up above to bother reading it.

rootless (root_e), your credibility is zero. Don’t ask me to look things up for you again. The definitions of words, the text of leaked documents, even your own words up above–you’ve baldly lied about all of these. I’m getting pretty sick of going on your wild goose chases.

Another point, btw, from way up above.

Second, Don Berwick’s departure statement from Medicare included the claim that 1/3 of Medicare spending is wasted or stolen. When Obama speaks of possible medicare cuts he always insists on cuts to providers not in benefits

No, when Obama speaks of his past Medicare cuts (e.g. the ACA) that is how he speaks of them. He has not promised that this is how future Medicare cuts will go.

Indeed, that wouldn’t really make sense–it’s doubtful that we can cut provider payments much more without providers leaving the system (hence the recurring “doc fixes”) and the Republicans are already waging jihad over the IPAB “death panels” so building something more substantive in that direction is unlikely.

Given that, future Medicare cuts are will be in reduced eligibility or benefits, higher premiums, or (unlikely) some kind of vouchers or “premium support”.

No, when Obama speaks of his past Medicare cuts (e.g. the ACA) that is how he speaks of them. He has not promised that this is how future Medicare cuts will go.
—

You could look it up instead of assuming your conclusion.

WASHINGTON — The official in charge of Medicare and Medicaid for the last 17 months says that 20 percent to 30 percent of health spending is “waste” that yields no benefit to patients, and that some of the needless spending is a result of onerous, archaic regulations enforced by his agency.

Date December 2011.
http://www.nytimes.com/2011/12/04/health/policy/parting-shot-at-waste-by-key-obama-health-official.html

So basically, you are speaking about something that you know nothing about and relying on your assumptions about the Obama Administration’s secret plans to defund Medicare to carry you through in the absence of even a single google search.

No, you didn’t. Go the the “Expedited Process for Consideration of Further Deficit Reduction”, Section 2, first and third bullet point.

Sorry, but the key is the bullet point above that with the “make permanent 10%, … ” rates which has a glaring omission of the top rate. The points you mention are nothing to do with tax rates – so your claim ” All of the Bush tax cuts would be kept. ” is false.
Apologies will be graciously accepted or at least accepted with surprise.

149:You can argue that’s the right answer (as Krugman does)

That’s a little ambiguous. There is the question as to whether Obama should take us over the fiscal cliff (if he doesn’t get Republican capitulation), and then there is the question as to whether he will.

Now Krugman, I think, believes Republicans will cave in a short period of time, before real damage is done. Krugman should be asked if Obama obstinacy is wise in case of full intransigence and obstruction, for say a year. That would crashing into the debt limit.

I think Obama will cave on top rates, but will get something Obama supporters can defend. I won’t like it.

My preference, as always, is contradictions heightened to the moon.

@rootless,

WASHINGTON — The official in charge of Medicare and Medicaid for the last 17 months says that 20 percent to 30 percent of health spending is “waste” that yields no benefit to patients, and that some of the needless spending is a result of onerous, archaic regulations enforced by his agency.

And, as I said, we already cut provider payments and set up the IPAB to address this stuff. Hopefully they’ll find some savings, but it’s already law, the ACA already claimed the savings (and Republicans demagogued us over it, e.g. “$700 billion in Medicare cuts”) and therefore we can’t count it as savings in further negotiations with Republicans.

Sorry, but the key is the bullet point above that

No, that’s what would happen if the sequester took effect. (Which, remember, you declared that we aren’t allowed to consider @43). It’s fairly similar to what would happen now, except that middle class tax cuts are protected and the cuts to military spending are gone.

Because you assume any grand bargain must be on GOP terms.

If the GOP would have preferred a smaller bargain to a larger one, and they have to agree to a bargain for it to proceed, then, yes, insisting on a grand bargain in 2011 would have to be closer to their terms than ours.

@bob mcmanus, thinking again I’d have to agree with you. To some extent, I even want some kinds of caving–I’d prefer to see some token cuts in deductions combined with token cuts in spending and have the whole mess pushed out another year when the economy is hopefully stronger. And that’s basically because I have the complete opposite preference with respect to contradiction heightening.

As noted (and even quoted by you!): Whatever reductions there are to current expenditures, future increases or anything else due to the IPAB and other cost cutting measures in the PPACA (and I nowhere objected to those reductions), they’re already part of law, they’re no good to us in further negotiations.

Oh, and now you’ve adopted the Romney/Ryan game of distinguishing between “cuts” and “reductions to future increases”, ignoring population growth and medical inflation.

Hey, I’m sorry. Reading through your nonsense is excruciating, non-productive work. I point out your errors, you ignore that and make more errors in response. I’m not doing this anymore until the anti-Obama conspiracy/cult is ready to put me on their payroll.

So I guess that means you win!

“Hey, I’m sorry. Reading through your nonsense is excruciating, non-productive work.”

Reading your insults in defense of your “argument” is annoying. Again, I advise you to look up what ad-hominem means.

Also, this just occurred to me, but if you have high expectations for eliminating Medicare fraud, that’s a very good reason to avoid grand bargains–the CBO absolutely does not share your expectations, which is why they didn’t give the IPAB very much savings. A better strategy would be to continually kick the can down the road with smaller bargains, wait for the IPAB (or pass other legislation, good luck getting even more “death panels” through the House) to outperform CBO expectations and claim the savings then.