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June 28, 2011 8:00 AM Debt talks going nowhere fast

By Steve Benen

The bipartisan debt-reduction talks broke down last week when Democrats asked Republicans to consider a compromise. According to the Wall Street Journal, participants were eyeing a package that would cut $2.4 trillion over the next decade, and Dems proposed a deal that leaned heavily in the GOP’s favor — $2 trillion in cuts with $400 billion in increased revenue.

It was, in other words, a roughly five-to-one split — for every dollar in increased revenue, Democrats would cut about five dollars in spending. In response, Republicans refused and walked out. The deal, apparently, just wasn’t sweet enough.

Yesterday, President Obama tried to get the talks back on track, holding separate Oval Office meetings with Senate Majority Leader Harry Reid (D-Nev.) and Senate Minority Leader Mitch McConnell (R-Ky.). How’d it go? Let’s just say this phase of the process is off to a slow start.

As President Obama welcomed Senator Harry Reid of Nevada, the majority leader, and Senator Mitch McConnell of Kentucky, the Republican leader, to the White House for separate budget negotiations, his spokesman, Jay Carney, said Republicans must be willing to consider tax changes, including the elimination of “loopholes” that benefit corporations.

“It’s the only way to get it done if you want to do it right and you want to do it in a way that is fair and balanced and ensures that the economy continues to grow and continues to create jobs,” Mr. Carney told reporters.

But even before Mr. McConnell met with the president, he dug in deeply against proposals for new tax revenue, suggesting that the deal should be struck mainly by cutting spending.

Among his other pronouncements, McConnell argued yesterday, “It’s time for Washington to focus on fixing itself. It’s time Washington take the hit, not the taxpayers.”

It’s an odd argument. Who, exactly, does McConnell think will be affected by his sweeping spending cuts? Yes, the federal government will have fewer resources, but it’s “the taxpayers” who will “take the hit” in the form of fewer services and benefits. The Minority Leader may be confused about how government works, but when people pay federal taxes, the money goes to finance programs that benefit the public. When those services — education, health care, public safety, environmental protections, etc. — are curtailed, it’s not “Washington” that suffers; it’s those who need and rely on the assistance.

In the meantime, White House Press Secretary Jay Carney went into a little more detail about the kind of revenues the president is looking for.

These include a repeal of oil and gas subsidies, an acceleration of the depreciation on private jets, a limit on deductions for the wealthy, and a change in how businesses value their inventory…. “Do we perpetuate a system that allows for subsidies in revenues for oil and gas, for example, or owners of corporate private jets, and then call for cuts in things like food safety or weather services?” Mr. Carney said.

Republicans seem to have an answer to that question: yes, we should perpetuate a system that allows for subsidies in revenues for oil and gas, as well as owners of corporate private jets, and then cut things like food safety and weather services.

As for the exact GOP position on revenue, an administration official said, “There’s genuine confusion about the Republican bottom line.” There’s some evidence that GOP leaders seriously believe the deal shouldn’t bring in so much as a penny in additional revenue. There’s also some evidence that Republicans could accept some new revenue, so long as tax rates remain the same.

Until Republicans figure out which of these lines is their position, the talks probably aren’t going anywhere.

Steve Benen is a contributing writer to the Washington Monthly, joining the publication in August, 2008 as chief blogger for the Washington Monthly blog, Political Animal.

Comments

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  • DAY on June 28, 2011 8:07 AM:

    Taxes are the lowest in half a century. How's that workin' out for us?

  • c u n d gulag on June 28, 2011 8:15 AM:

    "...It’s time Washington take the hit, not the taxpayers.”
    Yertle the Turtle's statement it telling, I think.

    He feels that the bottom half of the people don't pay any taxes, and that the top half pays all the rest.

    And so, the little people have to take the hit, not the top-earners.

    This is mistakenly based on gross annual Fed Tax rates, and the fact that the poorer people get a refund - forgetting that they pay state and local taxes, and pay into the Federal Tax every paycheck.
    Yertle - it's just that they don't earn enough, so they get a refund. They get it because THEY ARE POOR!

    And as DAY said, personal taxes are the lowest in half a century.

    My bet is that corporate taxes are at their lowest since even longer.
    Can anyone look into that?

  • voncey on June 28, 2011 8:19 AM:

    McConnell is not confused at all. He knows that the media is too lazy to look into exactly what services and benefits would be cut under the GOP proposals. By lumping it all into "Washington spending" he's using the Frank Luntz-approved terminology that all tax dollars disappear into a black hole of "waste, fraud and abuse".

  • mr. irony on June 28, 2011 8:22 AM:


    and...

    the gop says lower taxes raise revenue..

    how's that working out for us?


  • FRP on June 28, 2011 8:28 AM:

    Taxes are like laws they are only taxes when they are paid .

    Captcha is just like a mystery , entertaining and captivating , except when it ain't . As a mystery then it is often beyond any further reduction . For other entertainments of equally irreducible fun there is always hope for a Dowd-Breitbart collaboration produced by J Abramov , with promotional talent provided by Tucker Carlson's Bow tie .

  • Anonymous on June 28, 2011 8:38 AM:

    "As for the exact GOP position on revenue, an administration official said, 'There’s genuine confusion about the Republican bottom line.'"

    That's easy. There is no fucking bottom line. It's no revenues, all cuts all the time until there is not one dollar going towards public assistance.

    If Dems don't figure this out and start telling the public, they will end up holding the bag for a double-dip DEPRESSION.

  • blondie on June 28, 2011 8:42 AM:

    So when is there going to be a new "March on Washington" aimed squarely at the Rethuglicans? I'll go, in a heartbeat!

    Seriously, if people can't get off their a$$es long enough to fire off an email or a phone call to their representatives, I'm beginning to think they're already a lost cause.

    What was it that Ben Franklin said? That we have "a Republic - if you can keep it."

    I'd say that learned man was familiar with the end of the Roman republic ...

  • Barbara on June 28, 2011 9:03 AM:

    Here is my best guess: every time the Republicans put out another missive about no new revenue ever for any reason, they call their Wall St. friends and make it clear that they aren't really serious. At some point the president has to call their bluff. A government can't function with only one adult in the room.

  • Josef K on June 28, 2011 9:05 AM:

    Why do I get the sense McConnell (who frankly looks like he was put together with Play-Dough) isn't going to be able to deliver any deal before August 6th?

    Probably because he isn't and we're going to see what really happens when we hit the inflexible debt ceiling.

  • edb on June 28, 2011 9:08 AM:

    The Republican position is: crash the economy and make sure it looks like the Democrats did it. It is amazing to me that the Democrats don't see this and react accordingly. From the Republican point of view, they are so very close to taking it all - the big prize - it is right in front of their eyes: the destruction of the New Deal. The Democrats are not only helpless, they are helping. We are very close now. Imagine if we had a Republican President?

  • msmolly on June 28, 2011 9:14 AM:

    Who, exactly, does McConnell think will be effected by his sweeping spending cuts?

    The word is AFFECTED.

    [Thanks for the catch. I'm in a different timezone than Steve and it's easier to fix these little things when I can just peruse the comments that go up in the hour or so before I'm up and on the job. --Ed.]

  • square1 on June 28, 2011 9:14 AM:

    It really is amazing. For the past 2+ years, during every single major negotiation with the GOP, the White House has acted like a tourist in a Turkish bazaar, incapable of grasping the concept of haggling.

    I like to think that the White House is simply more conservative than Steve Benen and others believe. I like to think that the White House is partially complicit and using the GOP for cover. I like to think all that because I don't like to think that the White House is so mind-blowingly stupid as to constantly give in to 90% of GOP demands, even as here, where the GOP is simply bluffing.

    You either believe that, if push comes to shove, the GOP would fail to raise the debt limit even if it crashes the economy or you don't believe that.

    If you don't believe that, then they are bluffing and you give them nothing. Nada. Zilch. Zip. Tell them that agreeing to tax increases in principle, is a precondition to any deficit-reduction discussion. Unless everything is on the table, nothing is on the table.

    Or, if you think the GOP is truly that insane and destructive, you ignore their whining, declare the debt limit unconstitutional and move on. What are they going to do?

    What you don't do is sit down with people that you have described as "hostage-takers" and beg them to be reasonable. There is no surer way for Obama to cast aside whatever stature in leadership that he gained from killing bin Laden than for him to engage in these sorry-ass negotiations with the likes of Boehner, Cantor and McConnell. Why does Obama constantly need a permission slip from the minority to do his job?

  • km on June 28, 2011 9:19 AM:

    Democrats should be the ones walking out. The cuts/revenue split should be 50/50 or nothing.

  • Jamie on June 28, 2011 10:03 AM:

    well tax cuts don't count as much if you also lose your job.

  • Th on June 28, 2011 10:03 AM:

    Almost all government spending, even on programs for the poor, goes to middle and upper income people. Food stamp spending goes to grocery stores and food processors, Medicaid spending goes to doctors and hospitals, Section 8 spending goes to landlords, Pell Grants go to colleges, etc. Very little money goes directly to poor people.

  • Zorro on June 28, 2011 11:04 AM:

    “There’s genuine confusion about the Republican bottom line.”

    No, there absolutely is not confusion about the Republican bottom line. As McConnell, Cantor, Boehner, et al have made abundantly clear- repeatedly, loudly, and via every conceivable media outlet- the bottom line is that the only deal that they will accept is one which either leaves tax rates unchanged or lowers them.

    How anyone could be confused about this escapes me, given how explicit this position has been all along.

    -Z

  • Archon on June 28, 2011 11:58 AM:

    Just like the compromise on spending in January (where we found out it wasn't much spending cuts at all) Obama has put the Republicans in the position of agreeing to a face saving out or telling the voters and explaining to them why government is shutting down. In January it would have been planned parenthood, now it will be tax subsidies for big oil and those that travel in corporate jets.

  • Rick Taylor on June 28, 2011 12:04 PM:

    I'm not sure which I find more shockingly disappointing. That Democrats are proposing a deficit reduction plan that's more than 80% cuts, or that Republicans are saying that's unacceptable.

  • Rick Taylor on June 28, 2011 12:06 PM:

    And by the way, where are House Democrats in all this? Is it just being assumed they'll vote for whatever they're told?

  • Pea on June 28, 2011 11:53 PM:

    Square 1: AMEN!!!

  • Will on June 29, 2011 12:45 AM:

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