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April 15, 2011

Annals of Negotiation: GOP Offers None, Obama Pre-Negotiates

Posted in: Uncategorized

The news peg of the Obama fiscal policy speech is that he wanted to begin negotiations in early May on a solution, headed by Vice President Biden and including representatives of Democrats and Republicans in both chambers (did he say that he’d throw them up on C-SPAN?). Harry Reid promptly chose two representatives for Senate Democrats – the Chairs of the Appropriations and Finance Committees, Dan Inouye and Max Baucus. That’s actually less than what Obama called for – he wanted four from each caucus. But Republicans don’t want to negotiate at all, at least not in this format.

The Senate Republican leader, Mitch McConnell of Kentucky, told Mr. Obama at the White House on Wednesday that a 17-member group would be too large to be constructive, and he is considering naming just one Senate Republican instead of four, Republicans say. One said that he is considering naming Senator Jon Kyl of Arizona, the number-two Republican in the Senate who, like many Republicans, adamantly refuses to consider raising taxes for high-income Americans, as Mr. Obama has proposed.

The Republican speaker of the House, Representative John A. Boehner of Ohio, indicated to reporters early on Thursday – and privately to other lawmakers – that he might not name anyone to the negotiating group.

Maybe if Obama would only invite Paul Ryan to lunch, we could get this done in between the salad and the main course. The Applebee’s salad, of course.

The Republican argument is that the President wants to replace the deficit commission with another commission, but it’s more of a negotiation strategy than a commission. And Boehner and McConnell seemingly want to control that negotiation, which they can do easier with less members involved in it. Anyway, it looks like it won’t happen. And that’s good news for the suddenly ascendant “do nothing” strategy, which looks better with each passing day.

Alas, Obama did swoop in today to undercut his own message on negotiations, at least with respect to the debt limit:

Failure by Congress to raise the U.S. debt limit “could plunge the world economy back into recession,” President Barack Obama declared Friday, and he acknowledged that he must compromise on spending with Republicans who control the House to avoid such a crisis.

“I think he’s absolutely right that it’s not going to happen without some spending cuts,” the president told The Associated Press in an interview in his hometown, agreeing with House Speaker John Boehner’s assessment.

Obama urged swift action, saying he doesn’t want the United States to get close to a deadline that would destabilize financial markets. He said he was confident Congress ultimately would raise the limit.

In the space of one paragraph, we see everything wrong with this negotiation strategy. On the one hand, Obama says that a failure to increase the debt limit would plunge the country into chaos. This comes as even GOP hopefuls like Haley Barbour are telling their fellow Congressmen that they shouldn’t take a clean vote off the table. But in the next breath, Obama says that some spending cuts would have to be carried along with the vote.

Obama could pretty simply offer nothing and allow Wall Street to force Boehner into submission. This would be a successful strategy, as evidenced by the fact that Boehner, Eric Cantor, and everyone in the GOP insists that the debt limit will be raised. So you can only conclude that spending cuts or structural reforms will be attached to the vote because that’s what the President wants.


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