Hoyer Pushes Plan to Pass Obama Offer With Bipartisan Mix

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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.

NRA’s LaPierre Calls for Armed Guards in Schools – You Know, Like at Columbine

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In a bizarre press conference, NRA Chairman Wayne LaPierre called for the immediate placement of armed guards in all public schools. This is classic “fighting the last war” thinking, along with a dash of “think of the children” policymaking.

Just quickly, because you shouldn’t even dignify this with much of a response. One, it would cost $5.5 billion a year to put a guard in every public school in America. If that could come out of NRA dues or a tax on bullets, maybe we can talk. I don’t think that’s what LaPierre had in mind. Second, gun violence doesn’t only happen in public schools. WHILE LAPIERRE HELD HIS PRESS CONFERENCE, four people died in a mass shooting in Altoona, Pennsylvania, where the gunman just ran up and down a rural road. Presumably LaPierre’s response wouldn’t be “armed guards on all rural roads,” but we’ll see what he says at next week’s press conference. Finally, there was an armed guard at Columbine High School when two students shot up the school. He left for lunch when the shooting started, and returned in time to miss the target. The idea that you can place a security blanket around America is ridiculous, aside from the civil liberties degradation.

The speech itself was completely insane, and we do an injustice by even paying a second’s worth of attention to it, something I’ve already betrayed here. But it does show the magical thinking that allows the NRA to maintain power. Reportedly, some Democrats expected conciliation out of LaPierre at this press conference. He disappointed them. And with a substantial chunk of the House in his hip pocket, he has no reason not to disappoint. The “armed guards in schools” bit sounds like a classic wedge issue that Congress would leap at the chance to waste money on, especially if the NRA decides to score it. They successfully shut down debate on the gun issue for well over a decade. Maybe Newtown will provide a tipping point, though I question whether it should (that’s not an argument against gun safety, it’s an argument against the kind of “think of the children” policymaking I expect in the aftermath). But the NRA’s run a good game for a long time, and they haven’t been given a reason to stop yet.

NRA’s LaPierre Calls for Armed Guards in Schools – You Know, Like at Columbine

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In a bizarre press conference, NRA Chairman Wayne LaPierre called for the immediate placement of armed guards in all public schools. This is classic “fighting the last war” thinking, along with a dash of “think of the children” policymaking.

Just quickly, because you shouldn’t even dignify this with much of a response. One, it would cost $5.5 billion a year to put a guard in every public school in America. If that could come out of NRA dues or a tax on bullets, maybe we can talk. I don’t think that’s what LaPierre had in mind. Second, gun violence doesn’t only happen in public schools. WHILE LAPIERRE HELD HIS PRESS CONFERENCE, four people died in a mass shooting in Altoona, Pennsylvania, where the gunman just ran up and down a rural road. Presumably LaPierre’s response wouldn’t be “armed guards on all rural roads,” but we’ll see what he says at next week’s press conference. Finally, there was an armed guard at Columbine High School when two students shot up the school. He left for lunch when the shooting started, and returned in time to miss the target. The idea that you can place a security blanket around America is ridiculous, aside from the civil liberties degradation.

The speech itself was completely insane, and we do an injustice by even paying a second’s worth of attention to it, something I’ve already betrayed here. But it does show the magical thinking that allows the NRA to maintain power. Reportedly, some Democrats expected conciliation out of LaPierre at this press conference. He disappointed them. And with a substantial chunk of the House in his hip pocket, he has no reason not to disappoint. The “armed guards in schools” bit sounds like a classic wedge issue that Congress would leap at the chance to waste money on, especially if the NRA decides to score it. They successfully shut down debate on the gun issue for well over a decade. Maybe Newtown will provide a tipping point, though I question whether it should (that’s not an argument against gun safety, it’s an argument against the kind of “think of the children” policymaking I expect in the aftermath). But the NRA’s run a good game for a long time, and they haven’t been given a reason to stop yet.

The Fiscal Slope Exposes Deficit Scolds as Cowards

Maya MacGuineas, one of the deficit scolds responsible

Let’s just stipulate something for the record. If the Congressional Budget Office were asked to step in and score John Boehner’s “Plan B,” it would score as an increase to the deficit by about $4.9 trillion over ten yeas. If CBO scored the Obama plan, it would score as an increase to the deficit by about $4.1 trillion over ten years. That’s because current law dictates that America goes over the cliff and stays there. It doesn’t contemplate any changes to the law. And if America went over this cliff, the resulting austerity would be so great that it would swing the economy into recession. It would also virtually wipe out the long-term deficit gap, even while it would probably increase it a bit in the near term, because of increases in automatic stabilizers. But over the long-term, the deficit would essentially be wiped out.

The fact that everyone in Washington, everyone on Wall Street, every economic analyst in America is freaking out over this possibility should tell you what you need to know about the importance of reducing the deficit. Both sides are trying their best to cut taxes from current law to avoid the near-term consequences of austerity. The debate comes from whether to cut taxes by $4.1 trillion or by $4.9 trillion. Both sides basically want to keep the spending cuts from the 2011 debt limit deal relatively intact, just shifting it around a bit.

The CBO also publishes an “Alternative Fiscal Scenario,” where they try to guess at what policies will get extended and what policies won’t. But that’s nonsense. They might as well consult a fortune teller. CBO’s job is to explain the consequences of current law and proposals to alter it. If they were honest, they would explain that Congress and the White House are currently negotiating over how much to increase the deficit.

This article covers a lot of this same ground. But it focuses on the case for doing a deal in January. I’m trying to explain the case for telling “deficit hawks” to shut their damn mouths. They’ve been exposed by this entire process as complete cowards, unable to deal with the consequences of their own rhetoric. They’ve demanded, in the most apocalyptic terms imaginable, a “deal on the debt” that led to the political construction of this cliff, which nobody can seem to figure out how to avoid. There’s nobody more responsible for the economic hardship in the aftermath than the likes of Pete Peterson and Maya MacGuineas. And the sad thing is that they won’t feel it. They’re incomparably wealthy, and they won’t face any challenges if a recession CAUSED BY THEIR ACTIONS hits. It’s the average working man and woman who will suffer.

Kerry Finalized as Secretary of State Nominee

Sen. John Kerry (D-MA)

Former Democratic Presidential candidate John Kerry will become the next nominee for Secretary of State, replacing Hillary Clinton and creating another Senate vacancy.

President Obama will formally announce the nomination today at the White House, according to sources. He is not expected to face much resistance in the Senate for confirmation. Kerry will likely recuse himself from the confirmation hearings, since they would take place at the Senate Foreign Relations Committee, which he chairs. But there’s no word on when or if Kerry will step down from the Senate, the timing of which triggers a series of vacancy laws in Massachusetts.

Those laws are made to be rewritten, and as I noted the first time this nomination became clear, there is no reason why the Massachusetts legislature will live with a situation where they have to hold a special election for Kerry’s seat within 150 days of him stepping down. On two prior occassions, the mostly Democratic legislature changed their Senate vacancy law for maximum partisan advantage – in 2004, when they reacted to Kerry’s potential elevation to the Presidency and Mitt Romney’s opportunity to name a replacement by creating the quick special election process, and in 2009, when they reacted to Ted Kennedy’s death by allowing for a gubernatorially-selected interim replacement, so Senate Democrats could pass health care. The legislature could simply move out the special election to the time of the next general election in Massachusetts, in this case 2014. That would eliminate the possibility of a quick-strike, short-term campaign, where soon-to-be-former Senator Scott Brown, a Republican, would probably have the advantage, especially if Democratic Governor Deval Patrick did not run. A 2014 election would give time for Democrats to build a campaign with another candidate, and would put the election at the same time as the gubernatorial election and House elections in the state, which would probably change the turnout model. I fully expect this to happen, and Governor Patrick told a local radio show recently that he would sign such a bill.

As for an interim replacement, the intriguing possibility is retiring House mainstay Barney Frank. But there are a number of other options.

I would refer back to my earlier comments about Kerry’s expected performance at the job. He’s a mainstream Democrat who will offer a mainstream, establishment perspective to diplomacy and foreign policy. I don’t see it changing the outcomes all that much.

Corporate Loans to Highly Leveraged Companies Proliferate

This seems like a great time for banks to start loosening their lending standards. After all, household balance sheets are strengthening, and with mortgage rates so low, they can better afford the loans. Oh wait, you’re not talking about banks loosening their lending standards to individual homeowners? Only to corporations? Never mind.

Regulators are concerned that banks are loosening their standards for one of the riskiest forms of corporate lending, a trend that harkens back to perilous practices common in the run-up to the financial crisis.

In the past 18 months, banks have relaxed the criteria they use to determine whether to issue loans to highly indebted companies, a type of borrowing known as leveraged finance, according to a report on risk released Thursday by the U.S. Office of the Comptroller of the Currency.

The agency, which regulates national banks such as Bank of America and JPMorgan Chase, is noticing more institutions allowing companies to take on higher levels of debt. Banks are also signing off on deals that provide limited lender protection if the borrower fails to keep up with payments.

Welcome to the Bain Capitalization of America. These are precisely the kind of deals seen in leveraged buyouts from private equity firms. They’re supported by demand from institutional investors like hedge funds, which capture the high yields. But they threaten the livelihoods of the companies thrown into debt in these games. And this gets enabled, by the way, by the tax preference for debt over equity. Private equity firms can lard up debt on the companies they buy and strip them of wealth, without much concern for the workers involved or whether the company survives.

These loans are approaching pre-crisis levels. And a lot of the deals are – wait for it – getting securitized, and sold off to investors. It’s like nobody learns anything. And considering how Wall Street bounced back after the crisis, why should they?

In ten years, Glenn Hubbard will give a deposition about how the leveraged finance loans were no different than other loans in the same time period…

Glenn Hubbard’s Hilarious Deposition on Behalf of Countrywide

Glenn Hubbard, Dean of the Columbia University Graduate School of Business

General business has kept me from reading the deposition Matt Taibbi writes about here, but it sounds amazing.

Anyone who’s seen the movie Inside Job will recall the stupendously angering scene in which (Mitt Romney advisor Glenn) Hubbard pissily snaps at his interviewer for asking about his outside relationships with financial services industry […]

“This isn’t a deposition, sir,” he hissed. “I was polite enough to give you time, foolishly I now see. Give it your best shot.”

Again, there’s just nothing like karma. If your answer to a perfectly sensible question is going to be, “Screw you, this isn’t a deposition,” exactly how long do you think it’ll be before you end up actually getting deposed? And forced to answer, under oath, just how much your opinions cost?

A couple of years, as it turns out.

Hidden among the reams of material recently filed in connection with the lawsuit of monoline insurer MBIA against Bank of America and Countrywide is a deposition of none other than Columbia University’s Glenn Hubbard. And boy, is it a wild deposition. It’s like Inside Job, only Hubbard has to answer the questions he doesn’t want to answer. Reading it is like watching a man try to avoid breathing in a gas chamber.

Wow, just wow. The deposition is right here. As Taibbi notes, Hubbard testified for Countrywide in the lawsuit. This is one of the bigger mortgage-backed securities cases out there. MBIA is suing Countrywide over misrepresentations and fraud in the underwriting process that caused them to lose lots of money on securities they insured for investors. Hubbard apparently endorsed the view that Countrywide’s loans were of the same quality as other mortgage lenders, and thus they didn’t owe the insurer, or investors, any recompense. The losses stemmed from the financial crisis, according to him.

We obviously have reams of data and documentary evidence to rebut that. But Hubbard picked up $1,200 an hour from Countrywide to lie for them. And in the deposition he reveals that, for all that money, he basically looked at Countrywide loans and then he looked at other loans from the same time frame. And not the loan files, but the failure rates. In other words, he testified to the veracity of Countrywide’s underwriting without looking at, um, the underwriting. You wouldn’t catch any variance between Countrywide and other loans if the fraud was systemic during the time of the bubble – which it was. Ameriquest and New Century and all kinds of other fly-by-night lenders, all of them now defunct, had the same business model – write as many loans as possible, regardless of the quality. Hubbard just compared this crap against one another rather than reality. This part of the deposition that Taibbi highlights is hilarious:

Q. Did you make any inquiry into how Countrywide actually originated its loans?

A. I’m not sure exactly what you mean by that.

Q. You understand there was a process by which Countrywide originated the loans that it included in the securitizations?

A. Yes.

Q. And there was also a process by which Countrywide examined the loans that it purchased from other originators inclusion in securitizations?

A. Correct.

Q. Did you make any factual inquiry into the nature of either the process of origination or the process of due diligence by Countrywide?

A. I’m not an underwriter in this proceeding, so neither of the assignments that I told you would require such.

More than half of the loans Hubbard “studied” came from lenders being sued by other entities for fraud in their underwriting process.

It’s pretty incredible that Hubbard, an academic, thought he could throw this fastball by lawyers involved in MBS litigation for years and years. And it’s almost a shock that Countrywide got so little for their money.

I’m going to have fun curling up with this deposition sometime soon.

Glenn Hubbard’s Hilarious Deposition on Behalf of Countrywide

Glenn Hubbard, Dean of the Columbia University Graduate School of Business

General business has kept me from reading the deposition Matt Taibbi writes about here, but it sounds amazing.

Anyone who’s seen the movie Inside Job will recall the stupendously angering scene in which (Mitt Romney advisor Glenn) Hubbard pissily snaps at his interviewer for asking about his outside relationships with financial services industry […]

“This isn’t a deposition, sir,” he hissed. “I was polite enough to give you time, foolishly I now see. Give it your best shot.”

Again, there’s just nothing like karma. If your answer to a perfectly sensible question is going to be, “Screw you, this isn’t a deposition,” exactly how long do you think it’ll be before you end up actually getting deposed? And forced to answer, under oath, just how much your opinions cost?

A couple of years, as it turns out.

Hidden among the reams of material recently filed in connection with the lawsuit of monoline insurer MBIA against Bank of America and Countrywide is a deposition of none other than Columbia University’s Glenn Hubbard. And boy, is it a wild deposition. It’s like Inside Job, only Hubbard has to answer the questions he doesn’t want to answer. Reading it is like watching a man try to avoid breathing in a gas chamber.

Wow, just wow. The deposition is right here. As Taibbi notes, Hubbard testified for Countrywide in the lawsuit. This is one of the bigger mortgage-backed securities cases out there. MBIA is suing Countrywide over misrepresentations and fraud in the underwriting process that caused them to lose lots of money on securities they insured for investors. Hubbard apparently endorsed the view that Countrywide’s loans were of the same quality as other mortgage lenders, and thus they didn’t owe the insurer, or investors, any recompense. The losses stemmed from the financial crisis, according to him.

We obviously have reams of data and documentary evidence to rebut that. But Hubbard picked up $1,200 an hour from Countrywide to lie for them. And in the deposition he reveals that, for all that money, he basically looked at Countrywide loans and then he looked at other loans from the same time frame. And not the loan files, but the failure rates. In other words, he testified to the veracity of Countrywide’s underwriting without looking at, um, the underwriting. You wouldn’t catch any variance between Countrywide and other loans if the fraud was systemic during the time of the bubble – which it was. Ameriquest and New Century and all kinds of other fly-by-night lenders, all of them now defunct, had the same business model – write as many loans as possible, regardless of the quality. Hubbard just compared this crap against one another rather than reality. This part of the deposition that Taibbi highlights is hilarious:

Q. Did you make any inquiry into how Countrywide actually originated its loans?

A. I’m not sure exactly what you mean by that.

Q. You understand there was a process by which Countrywide originated the loans that it included in the securitizations?

A. Yes.

Q. And there was also a process by which Countrywide examined the loans that it purchased from other originators inclusion in securitizations?

A. Correct.

Q. Did you make any factual inquiry into the nature of either the process of origination or the process of due diligence by Countrywide?

A. I’m not an underwriter in this proceeding, so neither of the assignments that I told you would require such.

More than half of the loans Hubbard “studied” came from lenders being sued by other entities for fraud in their underwriting process.

It’s pretty incredible that Hubbard, an academic, thought he could throw this fastball by lawyers involved in MBS litigation for years and years. And it’s almost a shock that Countrywide got so little for their money.

I’m going to have fun curling up with this deposition sometime soon.

The Pileup Behind the Fiscal Slope, and the Consequences of Inaction

Say what you will about the 2010 deal to extend the Bush tax cuts, which helped to set up what we’re seeing this month. But there was definitely a virtue in getting it done by early December, allowing for a productive lame duck session that repealed Don’t Ask Don’t Tell, passed the New START arms reduction treaty, and several other measures. Because this entire lame duck has been consumed with fiscal slope negotiations, and really only the tax rate and social insurance part of it, bills that might have had a chance to pass through Congress if the pipeline were unclogged instead remain dormant. And unlike 2010, the bills in question in 2012 are more of the must-pass variety.

For example, the Violence Against Women Act hasn’t passed the House, and while I believe the appropriations associated with it extend into March (hey, good news, at the end of March Congress has to pass another budget), they could easily lapse, and so would all kinds of resources for victims of domestic abuse.

The doc fix ends in December, and the Center for Medicare and Medicaid Services has already begun a process which would lower Medicare reimbursement rates by 27%, under the “Sustainable Growth Rate” formula that Congress has never let go into effect.

The appropriation of emergency funds for response to Hurricane Sandy may be underway in the Senate, but it’s a shadow play until the House can put the fiscal turmoil behind them and focus. This is among the most unkind consequences, as millions suffering under the weight of that disaster will probably get no additional federal help in the coming weeks.

Oh yeah, and your milk prices will go up to as high as $8 a gallon in the event that Congress fails to pass a farm bill or an extension of some kind, and federal price supports revert back to 1949. Wheat prices are likely to soar as a result as well, and quite a few things get made with wheat, I reckon.

The wind energy sector is likely to collapse when the wind production tax credit, something litigated during the Presidential campaign, expires at the end of the year. The wind industry tried to broker a compromise of a phase-out of their tax credit after six years to provide certainty, but that’s an artifact of a fiscal slope deal.

Perhaps the most invisible consequence, the expiring tax measure that actually hits an area of strength in the economy, is the one I’ve been talking about since April, the expiration of the Mortgage Forgiveness Debt Relief Act. This would force borrowers receiving mortgage debt relief, in the form of a principal reduction or short sale, to pay taxes on the amount forgiven. The effect will be to completely end principal reductions and short sales, leading to more foreclosures and also taking a meat axe to the housing market, where as many as 35-40% of all home purchases in some distressed areas come from short sales.

None of these implications have anything to do with the common set of consequences most people would describe of going down the slope, like taxes rising for every American, or unemployment checks halting for 2 million Americans, or mass furloughs of federal workers and reductions in agency budgets as a result of the sequester. I think the economy can handle the consequences of the big things for a while, especially if the Administration takes smart action like freezing withholding rates or avoiding the worst near-term effects of the sequester through evasive action at OMB. But the rest of these consequences are going to be hard to avoid. You can safely blame this Congress, the worst in living memory, for allowing such a pileup. (more…)

Where to Go From Plan B, And Why the Answer Is “Nowhere”

nowhere man

I couldn’t think of a more fitting story on my last day of blogging to symbolize the nature of our government than the aborting of Plan B, wherein House Republicans couldn’t even pass a messaging bill with no chance of advancing. Sometimes we’ve seen Speaker Boehner miscount the votes – the most notable time I can think of was an initial vote reauthorizing the Patriot Act, when some civil libertarians revolted – but not on a pure messaging bill.

In the aftermath, nobody can help but try to analyze the strategy going forward. The White House’s statement basically gave up on everything in the fiscal slope but the tax rates, saying “The President’s main priority is to ensure that taxes don’t go up on 98 percent of Americans and 97 percent of small businesses in just a few short days.” Harry Reid’s spokesman said that ”
“It is now clear that to protect the middle class from the fiscal cliff, Speaker Boehner must allow a bill to pass with a combination of Democratic and Republican votes.”

Surely, that’s the conventional wisdom. If Republicans can’t even get a bill done where they get everything they want out of the deal (including cutting Meals on Wheels, food stamps, all kinds of anti-poverty programs, and holding the military and Wall Street harmless) but raising tax rates on not even 0.5% of the population, what compromise measure could get more than token support?

But Boehner, following the Iron Law of Institutions, probably cares more about his position as Speaker than forging a deal for the country. Which means he cannot possibly put forward legislation that would get 190 Democratic votes and 20 Republican ones until he gets re-elected Speaker January 3, and maybe not even then. There’s also the question of whether a rump caucus even exists among House Republicans, especially… after January 3. Sure, there are a few lame ducks now who would commit to raising tax rates above $250,000 and going home – Steve LaTourette, Mary Bono Mack, just to name a couple. But they’re both headed home after 2012. I know that bipartisan bills occasionally get through the House – it’s how TARP got done, and the 2011 debt limit deal – but none of them raised taxes.

Then there’s the question of what’s still operative. I agree with Dan Burton (shudder) that Republicans may consent to a bill purely cutting taxes on the first $250,000 in income, after the Bush tax cuts sunset. But would the leadership say that, since the President offered the concession to raise the dividing line to $400,000, they won’t go any further than that? The only way to square this is for President Obama to publicly take his last offer off the table, saying that, given the demise of negotiations, he’s returning to his initial position and won’t sign any legislation that extends tax cuts for rates above $250,000. This is what Damon Silvers of the AFL-CIO counseled yesterday. The Press Secretary’s statement, in referencing 98% of individuals and 97% of small businesses, actually alludes to the $250,000 dividing line.

But the President is still hunting a deal, and might want his options open for something that splits the Republican caucus. But again, you get to the dead end of there not being enough House Republicans, even if you find something that House Democrats grudgingly accept, to pass a bill that raises tax rates in 2012. I just don’t see it. Nothing shows you more about how ideologically aligned against taxes that caucus is than last night. And the White House desperately needs that fig leaf of a tax rate hike to accomplish a deal, purely for public relations purposes if nothing else. Republican intransigence stopped the grand bargain again.

So these strategic considerations are I think a non-starter. So is wondering about the Obama offer, with its chained CPI and the rest. There’s no negotiating partner on the other side, and Democrats can’t pass something by themselves. That’s why I’m fairly resigned to going over the slope. Preferences are really out the window at this point; it’s what will happen.

UPDATE: Matt Yglesias offers a slatepitch that’s the complete opposite view. I really don’t see it. The bill last night represented a maximalist, Republicans-get-everything-they-want view of something with tax increases in it. Anything less than that – i.e. something that could get wide Democratic support – would be rejected wholesale by the Republican rank and file, because a) Obama wants it and b) they wouldn’t get everything they want, making the tax lift harder. There’s also a difference between sticking with leadership on a messaging vote and sticking with them on something that could pass into law. (more…)