This analysis as to what’s being discussed in the supposed “fiscal cliff” talks is somewhat speculative, but there are enough pieces in place that I’m willing to go with it and let Obama prove me wrong. (Please please, do prove me wrong.)
But reading the signs, I don’t think I’m far afield. In fact, I think I’ve found the key. The trick in understanding the fiscal cliff deal is to not assume Obama is compromising. He’s playing for a double win instead. That’s the only explanation that makes sense of his refusal to simply let the 2001-2010 tax cuts expire. Read on.
The deal is carefully crafted, with a “raise taxes” piece and a “cut benefits” piece
Let’s assume the deal as sussed or leaked by Ezra Klein represents the Obama goal. (Prove me wrong, sir; sign a different deal.) If that’s true, we know the following for sure.
On the Obama side, the deal he wants does not contain a compromise — a piece he likes and a piece he doesn’t like. We do ourselves a huge disservice to think of him as compromising.
Instead, Klein’s Obama offer contains two pieces — both of which he likes — and is designed to avoid the one outcome he wants to avoid, letting the 2001-2010 tax cuts expire.
■ The first piece Obama wants is to force Republicans to vote to raise taxes, force them to be unfaithful to Grover Norquist, and break the Republicans’ back on this issue. I would think Beltway Dems love this outcome. I think they think it will insure electoral victory for a generation (or until the climate kicks everyone’s butt, whichever comes first). They’re wrong, of course — Dems will lose big-time — but that miscalculation should come as no surprise. This still has them drooling.
If that’s the case — if I’m right about Obama’s goal — the size of the tax increase doesn’t matter at all. It’s the fact of it that counts.
So here’s the first part of Obama’s offer to Boehner:
a. John, I can let the 2001 tax cuts expire, the top rate goes to 39.6% (from 35% assessed at $388,351 of income), and then I come back in January and force you to vote the rates back down for all income under $250,000.
You can’t stop me and my base gets the total win they want [note, not the win Obama wants, the win his base wants].
b. Or John, you can kiss Grover goodbye, publicly, and endorse a small tax increase. I’m happy to find a rate that’s too small to care about but large enough to sell as a win to my base.
Notice that this is predicated on Obama threatening let the 2001-2010 tax cuts expire, but then not doing it in order to get something else. If he actually does let the tax cuts expire, he loses his leverage and this deal is off. In other words, if he wanted to raise taxes, he’d just sit on his hands. That’s his ace. He’s using his ace to break Grover Norquist instead.
■ The second piece Obama wants is to shrink the social insurance safety net. He’s wanted this since forever anyway, since at least 2006 by my count, when he was one of Wall Street’s favorite freshman senators (that’s Robert Rubin he’s saying “Hi Bob” to). He’d really like to get at Social Security — his 2011 offer to Boehner included that piece — but recent reaction to that part has made it toxic (thank you, progressives!).
So he’s making a run at Medicare. The Klein-specified deal takes a whack at Medicare, his surrogate Dick Durbin has taken another whack, and on and on. This is the bitter pill that Obama is hoping to force down the throats of his base — cleverly disguised as a “concession” to Boehner.
So the second part of Obama’s offer to Boehner is this:
John, I know raising taxes is a heavy lift for you. But I can make it happen anyway, and you can make it less damaging for the wealthy.
As a sweetener, I, a Democratic president, offer to start cutting the safety net. I’m doing this for you. You can hang that around our necks forever. You do your piece, and I’ll do mine. Tempted?
In fact, cutting Medicare does work as a concession to Boehner — a very tempting one indeed, as Jonathan Chait pointed out. Just as professional Democrats drool at the thought of Norquist’s demise, Republicans drool at the start of the end of all social insurance in America:
[Cutting benefits by raising the Medicare eligibility age] has weirdly disproportionate symbolic power, both among Republicans in Congress and establishmentarian fiscal scolds. Mitch McConnell and Erskine Bowles alike would regard raising the retirement age as a sign of serious belt-tightening and the “structural reforms” conservatives say they need. Meager and inefficient though the savings may be, they pack a lot of punch in delivering Republican votes.
The fact that Obama — a Democratic president — is offering to put the first knife in the back of a signature Democratic insurance program is like porn with a pony inside to many in both parties (note that both McConnell and Bowles are named above).
So this is the two-part offer from Obama to Boehner. And both parts are needed — they work as a set. Your pain, that bitter pill, is a necessary part of Obama’s offer.
That was a lot of words, however. Just in case it’s not obvious what this Obama deal actually contains, let me restate it in simpler terms.
Obama’s offer to Boehner — let’s each kill one of our own
If all of the above is right, this is Obama’s offer to Boehner in a nutshell:
I’ll kill one of my best sheep, if you kill one of yours.
The sneaky fact — Obama doesn’t really like sheep. In fact, if you got him after three or four beers, he’d tell you he’s been trying to sell them off for years. Can’t stand the little buggers.
What does that make this deal for Obama? A double win; he gets two things he wants. What’s the only thing in his way? Actually playing his ace — ending the Bush-Obama tax cuts for the wealthy — which prevents him from getting either of the pieces he’s playing for. Yes, fans, only you want to kill those upper-class cuts. Obama wants to trade not killing them for (a) Grover’s head on a plate and (b) the beginning of the end of social insurance.
Again, your pain is a necessary part of the offer.
That’s stark, I know, but no one’s making him do it, and he can stop at any time.
Your job is to tell the truth about Obama and his deal. Tell it to Democratic office-holders. Tell it to your friends.
First, watch the deal as it emerges. If it includes cuts to Medicare (or any other safety net program), make it toxic for Democrats; force them to walk it back. Senate phone numbers here. House phone numbers here. Use them. There’s information here about how to stop the deal in the Senate.
Update: CREDO action here — click to help out.
Second, if the deal does contain these cuts, tell the truth about Barack Obama:
He did it because he wanted to. He went after Medicare because he wanted to. Barack Obama placed the first Democratic knife in the safety net — because he wanted to.
He got something only he and NeoLiberal Democrats wanted, and left his people high and dry; many he left to die.
Can you do that? If it’s the truth, I think you can. If it’s the truth, you don’t need anyone’s permission — just courage.
In my view, the job of the next four years is to tell the truth. There will be other jobs, but the first job is this one. Anyone who describes Obama-Boehner (if it goes down that way) as a compromise on Obama’s part is covering for him, deliberately or not. The only way Obama can sell this to you and escape scot-free to Legacy Land, reputation intact, is to convince you to see him as “forced to compromise” — and then to tell your friends that convenient little lie.
I’ll say that again. If Obama gets something like the deal Klein detailed, and we call it a “compromise,” we’re complicit in Obama’s cover story, intentionally or not.
Sir, you can prove me wrong. Make a “fiscal cliff” deal that doesn’t contain a “bitter pill” or a knife between the shoulders of social insurance. Et tu, Brute? Make me wrong, and I will eagerly say so.
But if you don’t make me wrong, this is the story I will tell. I hope to have company telling it. (“Clear-eyed to the point of madness” right? That applies to Democrats too.)
Next up — Who’s in Obama’s Veal Pen 2.0?
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