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December 03, 2012 5:39 PM GOP Fiscal Maneuvers

By Ed Kilgore

So there are two pieces of news out today about the Republican response to the president’s so-far-very-successful maneuvers on the big fiscal issues. The first is a formal counter-offer from the House GOP leadership (with, significantly, Eric Cantor’s and Paul Ryan’s names joining that of John Boehner). It specifically calls for $800 billion in new revenues (close to what Boehner put on the table in his repudiated 2011 debt limit deal), but without rate increases. And it bites the bullet somewhat on spending by calling for a 2-year increase in the Medicare eligibiity age and a government-wide adjustment in how cost of living adjustments are calculated.

You could read this as Republicans deciding to get more specific on “entitlement reform” than on taxes (it’s extremely unlikely that you can come up with $800 billion in “loopholes” to close without hitting the middle class), or simply choosing the least inflammatory ways to reduce entitlement spending. Or—and this is my personal take at the moment—it could just be an offer meant to be refused that just gets the GOP out of the immediate problem it had with appearing unwilling to put anything on the table.

Arriving just before the “counter-offer” were a host of less formal reports that Republicans have a fallback strategy of letting an extension of the Bush tax cuts for taxable income under 250k pass without their votes, and then fighting Democrats tooth and nail after the beginning of the new year on the debt limit increase or indeed, anything else Obama wants.

I share Jonathan Chait’s puzzlement over this supposed strategy:

[Y]eah, Republicans would still have things to fight over. Obama is going to want measures to reduce unemployment. Republicans can dangle those. Obama is also going to want to not destroy the credit rating of the U.S. government for no good reason, and Republicans will threaten to do that, though it’s not clear that Obama is going to submit to another blackmailing on this.
But Republicans will also need Obama to sign a law canceling out the huge defense spending cuts scheduled for next year. If Obama is starting out with a trillion in higher revenue in his pocket (through expiration of the Bush tax cuts on the rich), and the extension of the middle-class tax cuts have largely taken the threat of a recession off the table, then he’ll still be negotiating from a position of strength. He’ll be able to offer Republicans cuts to entitlement programs plus defense spending increases in return for modest revenue increases, which don’t have to involve rate hikes, just to get to his own budget proposal.

Chait’s hunch is that Republicans are more preoccupied now with the optics of “not surrendering” on big fiscal votes than they are with actually imposing their priorities on Obama and the country. In other words, both maneuvers may be aimed at cutting losses without provoking an overt conservative backlash, and keeping—as Grover Norquist has suggested—their “fingerprints off the murder weapon” of any deal that can be described as betraying the sacrosanct “conservative principles.”

If that’s all true, it’s a strange way of exercising what Republicans claim is their co-responsibility for solving the nation’s fiscal problems after a “status quo election.” One might even reach the conclusion they lost.

Ed Kilgore is a contributing writer to the Washington Monthly. He is managing editor for The Democratic Strategist and a senior fellow at the Progressive Policy Institute. Find him on Twitter: @ed_kilgore.

Comments

  • T2 on December 03, 2012 5:48 PM:

    it's just an offer, so the TV guys can say they have one. Very little, if any, specifics (per usual).
    And to top it off, Erskine Bowles just dumped a bucket of ice cold water on John Boner's head.

  • Peter C on December 03, 2012 6:03 PM:

    Do they have 60 votes lined up in the Senate? That's what's required these days, afterall. Nothing less is really a serious proposal.

    Obama shouldn't consider it until it has passed both houses of Congress. That's what will need to happen in any event.

  • JackD on December 03, 2012 6:05 PM:

    It's just for show. They continue to refuse to say what specific tax changes they are recommending so there really is no revenue proposal on the table. They have no problem with specifying the cuts they want to Medicare and Social Security. I wonder what the problem is on the revenue side.

  • square1 on December 03, 2012 9:31 PM:

    It never ceases to amaze me that people can read anything that Johnathan Chait writes and find it the slightest bit insightful.

    It isn't just that he is wrong...about policy, about economics, about politics. It is that he is wrong in such a predictably banal and tediously boring fashion.

  • Patience on December 03, 2012 10:45 PM:

    Among many things that confuse me: let's say all the tax cuts expire in January. Won't that mean, with more revenue coming in, that the day when we'll hit the debt ceiling will be further off in the future than it otherwise would be? If the Republicans want to enact a tax cut bill, won't that bring forward the date when we hit the next debt ceiling? If I'm understanding that correctly, is there some way this can be used for leverage in a deal?

  • Cugel on December 04, 2012 12:10 AM:

    The GOP has spent the last 4 years planning the orgy of greedy looting for the top 1% that would occur once the Kenyan was removed.

    The Sequester was designed for this purpose -- so President Romney could enact the Ryan plan.

    Now that it's all blown up in their face due to the unexpected LOSS of their champion, they are forced to scramble around for a new strategy.

    That they haven't found it yet is unsurprising.

    We still have to be wary about Obama's determination to negotiate cuts to Social Security, Medicare and Medicaid as well as other social spending that would put the economy into a recession however.

    The GOP is still determined to impose Austerity in order to destroy economic growth so they can blame "Socialist Democrats".

  • emjayay on December 04, 2012 12:13 AM:

    Any mention of raising the SS or Medicare age is just appalling and disgusting. Life expectancy is up because of reduction of deaths through the whole life span and enormous medical advances for treatments particularly of older people - heart stuff, statins, strokes, etc. But 65 is 65 whether it's 2012 or 1912.

    If we want to fund SS better, simply raise the limit of income taxed for it. If Medicare needs more funding, just bite the bullet and fund it. And pursue structural reforms in medical care and prescription drug coverage.

    Anything else in saving on SS and Medicare is buying into Bush II and Ryan thinking.

  • Ron Mexico on December 04, 2012 8:06 AM:

    "preoccupied now"? "always and only preoccupied with" are the R's we've come to know and love.

    Anything else would require Boehner to control his caucus...has he ever done this, or even attempted it? This will go on for a couple more weeks and then Boehner/Cantor etc. will throw up his hands in frustration and allow enough Rs to vote for whatever they can get, and the media will treat the bipartisan package as a "Democrat" proposal, allowing the Rs to do what they've done with every major legislative effort since January 2009.