Analysis: Obama, Boehner seek cliff talks leverage

WASHINGTON (AP) — One month before the dead­line, nego­ti­a­tions between Pres­i­dent Barack Obama and Repub­li­cans to save the econ­omy from a plunge over the fis­cal cliff are still in the throat-clearing stage. Seri­ous bar­gain­ing is on hold while the two sides vie for polit­i­cal leverage.

Deal or no deal, noth­ing is likely to become clear until far closer to the year-end dead­line, when the lure of get­ting away for the hol­i­days will sharpen the focus of negotiators.

“There’s a stale­mate. Let’s not kid our­selves,” House Speaker John Boehner, R-Ohio, said Fri­day, punc­tu­at­ing the end of a week of polit­i­cal the­ater by divided gov­ern­ment. “Right now we’re almost nowhere.”

He spoke as Obama all but called Repub­li­cans heart­less louts from a Charles Dick­ens story. Their fail­ure to pass an exten­sion of mid­dle class tax cuts would amount to a Christ­mas “lump of coal” for mil­lions, Obama said in Hat­field, Pa. “That’s a Scrooge elec­tion,” added the recently-re-elected pres­i­dent, who claims a vot­ers’ man­date to extend exist­ing tax cuts for all but upper incomes.

Boehner, too, claimed a man­date after vot­ers renewed the House Repub­li­can major­ity on Nov. 6. But the speaker’s polit­i­cal hand was weak­ened — wit­ness his post­elec­tion announce­ment that the GOP would put rev­enues on the bar­gain­ing table. His con­trol seems to have eroded fur­ther in the weeks since, as a smat­ter­ing of the GOP rank and file let it be known they could sup­port the president’s tax plan under the right circumstances.

“Rate increase, if the pack­age includes sig­nif­i­cant enti­tle­ment reform that gets you to $4 to $6 tril­lion (in deficit sav­ings) over 10 years, I would vote for that,” a retir­ing Rep. Steve LaTourette, R-Ohio, told reporters on Friday.

Rep. Charles Bass made sim­i­lar com­ments. “If it gets us past the fis­cal cliff and the pres­i­dent is will­ing to con­sider mean­ing­ful sav­ings in enti­tle­ments, it’s a legit­i­mate solu­tion,” said the New Hamp­shire law­maker, who was defeated for re-election this fall.

Yet the speaker also made a little-noticed move this week to shore up his bar­gain­ing position.

He issued a state­ment not­ing that Sen­ate Democ­rats are threat­en­ing to weaken the Repub­li­cans’ abil­ity to block leg­is­la­tion in their cham­ber in the new Con­gress that con­venes in January.

“Any bill that reaches a Republican-led House based on Sen­ate Democ­rats’ heavy-handed power play would be dead on arrival,” he warned.

In the talks to date, Democ­rats have declined to iden­tify a sin­gle spend­ing cut they are will­ing to sup­port, while Repub­li­cans avoid specifics on rev­enue increases they would swallow.

Once each side moves beyond open­ing gam­bits, Repub­li­cans will have to decide whether they are will­ing to raise income tax rates on upper incomes, as Obama wants, or hold fast to clos­ing loop­holes as a means of pro­duc­ing increased tax revenue.

For their part, Democ­rats will decide how much sav­ings to pull from ben­e­fit pro­grams like Medicare, Med­ic­aid and pos­si­bly Social Secu­rity with­out cut­ting guar­an­teed ben­e­fits, a line they vowed not to cross in ear­lier bud­get negotiations.

Obama’s open­ing pro­posal, deliv­ered to Boehner and other Repub­li­cans by Trea­sury Sec­re­tary Tim Gei­th­ner on Thurs­day, calls for $1.6 tril­lion in higher taxes over a decade, hun­dreds of bil­lions of dol­lars in new spend­ing, a pos­si­ble exten­sion of the tem­po­rary Social Secu­rity pay­roll tax cut and enhanc­ing the president’s power to raise the national debt limit.

He is seek­ing new spend­ing to help the unem­ployed, home­own­ers whose property’s value is less than their mort­gage, doc­tors who treat Medicare patients and wage-earners.

In exchange, the pres­i­dent would back cuts of an unspec­i­fied amount this year, and sav­ings of as much $400 bil­lion from Medicare and other ben­e­fit pro­grams in 2013.

Repub­li­cans said they were sur­prised at the plan, and Democ­rats won­dered aloud why.

“Each side said they’d sub­mit a down pay­ment. We have. Our pref­er­ence is rev­enue. What is theirs?” said Sen. Chuck Schumer, D-N.Y.

Repub­li­cans have an open­ing offer of their own, in line with their con­ser­v­a­tive anti-tax views, much as Obama’s is designed to solid­ify his own polit­i­cal posi­tion. While agree­ing to new rev­enue, GOP law­mak­ers want to extend expir­ing income tax cuts at all lev­els, includ­ing the top brack­ets. They also want to raise the age of eli­gi­bil­ity for Medicare and cur­tail future cost-of-living adjust­ments for Social Secu­rity and other ben­e­fit pro­grams. The same adjust­ment would raise rev­enue for the gov­ern­ment by mak­ing a change in annual adjust­ments of tax brackets.

“We’re the only ones with a bal­anced plan to pro­tect the econ­omy, pro­tect Amer­i­can jobs and pro­tect the mid­dle class from the fis­cal cliff,” Boehner said on Friday.

That was a jab at Obama, who cam­paigned for re-election advo­cat­ing a bal­anced approach to avoid­ing the fis­cal cliff that com­bines higher taxes on the wealthy with spend­ing cuts.

Said the pres­i­dent: “In Wash­ing­ton, nothing’s easy, so there is going to be some pro­longed negotiations.”

Posted by Matt Echelberry on Nov 30 2012. You can follow any responses to this entry through the RSS Feed. Both comments and pings are currently closed.