Tweet
The President and Speaker Boehner met last night about the fiscal slope, but only for less than an hour. Meanwhile, White House Press Secretary Jay Carney blasted Boehner for what he described as “fantasy economics” right before the meeting.
The talks are going nowhere because all the players know what will happen. The White House and Congressional Democrats have a decided advantage on the tax issue, and either before the end of the year or shortly thereafter, they will win on that, at least partially, by getting the Bush-era tax rates above $250,000 to expire. If anything has acquired a totemic quality in this debate, it’s that, and Republicans no they have no choice but to allow it to happen, lest they want to see all tax rates go up and then have to face more headlines about holding things hostage over tax cuts for the rich.
That policy, by itself, raises $800 billion over 10 years, $1 trillion if you add in the savings to debt service. And it’s possible you could see more revenue gains out of rises in the capital gains tax rate, or the estate tax.
But increasingly, Republicans have located their strategy in the debt limit, seeking to retreat to higher ground and use that vote, and the threat of a default, to force fiscal changes. Speaker John Boehner admitted as much yesterday, saying that he wants to use the debt limit vote to “to bring fiscal sanity to Washington, D.C.” He described the vote as Congress asserting its “ability to control the purse,” which is completely illogical. Congress controls the purse when it makes appropriations. The debt limit vote merely authorizes the Treasury to pay for the obligations Congress already approved. So the proper analogy with the debt limit is Congress controlling the ability to dine and ditch if it so chooses.
This probably isn’t all that informative a post, but that’s the state of play. In a matter of weeks, the tax-side issues will get dealt with. Then Republicans will take the debt limit hostage and try to negotiate over spending and social insurance. However they want Democrats to dictate the spending cuts so they can pin them on their opponents. In addition, they really want to attack programs for the poor, rather than those for the elderly, which represents a substantial portion of their base. And hitting the poor isn’t all that popular.
The only real wild-card at this point is whether the sequester will get delayed or not.
Photo by RenoTahoe under Creative Commons License.
13 Comments
Support this site!
Subscribe to the newsletter
Advertise on Firedoglake
Send
us your tips
Make us your homepage
About FDL News Desk
I’ve been seeing some people saying that the appropriations process is where the GOP nutjobs will make their final stand. It really looks like the administration will not negotiate anything on the debt limit if they don’t get a deal now. They do have options (14th amendment, $2 trillion coin) , and there have to be at least 40 Republicans who are not a risk in a primary, but are at risk in the general if they shut down the government and careen us into another global financial mess. (This assumes that Boehner could put down a wholesale revolt from the members in gerrymandered districts who are at risk in a primary.)
By sometime around mid March (I’m told) appropriation bills will need to be passed, or programs will go unfunded (not social security, of course). There (as dday and I were tweeting about a little while ago) the administration doesn’t have options. The Republicans have to decide whether they want to pull a Newt and shut down the government. And that’s pretty much entirely up to them.
The election in November has changed nothing in D.C.; what is controlling is what do the .1%ers want? Their employees in the beltway and the MSM will support their agenda and this is just a high powered reality show where the big money is telling both sides what to say.
David. Can you hammer on this: NPR has been giving the chained CPI the trial balloon in the morning news loop. they minimized the impact of this change in the CPI formula with one of those newsy “some people think that this could lead to small benefit reductions over time.” (paraphrasing them). Hitzlik thinks that the chained CPI goes beyond the switching apples for oranges of the regular ‘substitutions’ which constitute the regular CPI.
Here he offered a correction to that.
Is there any way that you could correct the misperception that this is just forcing the elderly to switch to the store brand of cereal, (i.e. cheaper) and more that they would be forced to choose between medical care, transportation or food?
If you donate money to NPR you should demand they detail who those “some people” are.
The bogus fiscal cliff is a fiscal turd that is stinking very badly now. Quit the wars, quit sending troops into new places that are not on our continent. If other nations who are closer do not want to go in to the ‘problem’ nations, then we are being wasteful and harmful mongers going in. Quit the Pentagon going batshit for their own job security. Raise the age for all the military to retire. Military retirement currently is at age 38 or 40 and the rest of Americans get to retire now at age 67 or 68? NO, no–no way Pentagon. No way Congress. No way Obama. Audit the military with three different, private financial firms. Time to stop the Pentagon from writing their own ticket. The Pentagon is sucking the air out of our citizens. Them BSing us by saying they keep us safe is them killing us by taking health care, time and life away from us sooner. The military does the opposite of keeping us safe. The Pentagon does not care at all about American citizens. Just their own military and job security and early retirement for themselves.
The Republicans have no reason to agree to anything until after January 1st. They do not want to have to say that they voted for a tax increase so they’d rather wait until the tax rates go up and then vote for the bill that will allow tax rates for incomes under $250,000 to be “cut”. They really have no leverage in these negotiations, so the emphasis is on mitigation
This whole deal feels exactly like a TV wrestling “grudge match.” Everything has been decided. The news media just gets to run around pretending that a crisis is about to happen. It gets old.
I agree, as usual. Let’s all move along. Nothing to see here.
If you include the MIC with the Pentagon I will agree 100%.
Like your post! Glad you’re on our side.
I think I’ve heard that after the first of the year they could offer up the same tax cuts on everybody, and then blame the Democrats if they vote against it.
I think you’re right. Our government, as it is, IS just a fixed wrtestling match, kabuki show, and rigged game of “Three Card Monty”.
I am very worried about our future.
Yeah, I love these well paid people talking about how when steak goes up, people can trade down to chicken, and so forth.
What about the people who are already trying to get by on the cheapest eats? What do they trade down to?
Cat food, the canned stuff, is really getting expensive, btw, so that’s out as a choice. Sardines are pricey now too.
Ramen noodles? High sodium and low protein? Great diet, especially for the elderly.
I think the NPR MCMers (members of the Mainstream Corporate Media) are losing touch with likes of those in the lower economic quintiles.
C’mon, Obama seems to be pretty much hell bent on getting his very own Middle East war on. We’ve been setting up Syria for years now, and Obama has made sure those Salafists and other Islamist fighters are getting a free ride to Turkey or Jordan to get into Syria and kill Alawites, Christians, and any Sunnis who don’t support them. And we supply to weapons through the Gulf emirates.
Their propaganda is right out of Bush/Cheney’s play book. And getting very old. But the MCMers love it.
I mean, is no one wondering how the Syrians manage to shoot off a long-range missile of uncertain accuracy, such as the Scuds the administration is talking about, and manage to get it only a short distance away within Syria? How DO they do that? Or is just US government imaginations at work.