So Democrats have reached the bargaining phase of the fiscal slope debacle. It’s hard to say whether they’re pushing this because they think they have an opportunity to avoid the austerity bomb or because they know they have no partner on the other side, but either way, the result is the Democratic leadership, at least in the House, taking control of a plan that would, among other things, cut Social Security benefits as well as benefits for any of the 50 federal programs with a cost of living adjustment or income-based eligibility standard, and begging John Boehner to work with them to pass it.
Steny Hoyer had this to say on CNBC today.
Democratic House Minority Whip Steny Hoyer told CNBC’s “Squawk Box” on Friday he thought Republicans would be willing to work with the president. “We still need to focus on not going over the cliff,” he said. “It’s not good for the country, not good for the economy, not good for the confidence of the American people.”
He added: “John Boehner could not get his own bill through the Republican majority. What John Boehner I think can do is come to an agreement with the president and get half of his people or a little more than half of his people” to reach a bipartisan agreement.
That’s the conventional view – Boehner could abandon his right flank and join hands with the majority of Democrats on something that can pass. But on with Andrea Mitchell, Hoyer went further. He specifically said that the vehicle for such a deal could be the last Obama Administration offer, which would increase tax rates above $400,000, extend unemployment benefits, and include a process for a total of $1.2 trillion in tax increases and $930 billion in spending cuts, including switching to the chained CPI for Social Security and other social program benefits, as well as tax brackets. There are other parts to the deal as well (a permanent patch for the alternative minimum tax and the doc fix, a two-year stand-down on the debt limit), but those are the highlights. Hoyer basically said that he could bring Democrats along with half the votes for such a deal, while Republicans could get the other half.
I don’t think it’s possible for Republicans to get that other half, actually, and Boehner supporting a deal like this would spell the end of his leadership. Maybe he’s willing to take the risk but I doubt it. Still, you have to marvel at the agenda-setting power of the President, who often gets described in these budget deals as at the mercy of the other side. The President put an offer on the table, and regardless of the details, the House Democratic leadership is completely going to bat for it. The strategic considerations of a post-cliff deal versus a pre-cliff deal are completely irrelevant. Because the President wants a deal to cut Social Security benefits as part of a compromise he reaches with Republicans – it was in his campaign book, fercryinoutloud – that has become the official Democratic position in the House at this point. All of the social insurance cuts in this debate came directly from the desk of Barack Obama. Republicans support block-granting Medicaid and voucherizing Medicare. But because Obama offered increases in the eligibility age and means testing and chained CPI in 2011, they’re back in the debate in 2012. And that’s all that’s in the debate.
The numbers for passage simply don’t add up here – there’s no rump Republican caucus committed to this. The best plan continues to be to give space to Republicans to pass a pure tax cut in January, use the proceeds to avoid the sequester, freeze withholding rates and use OMB to avert the worst of the sequester until that deal coalesces, and then just refuse to negotiate on the debt limit, as the President has said all along. This is not in the strategic thinking of Washington Democrats. They want a deal, even with no partner on the other side.