Obama offers a scaled-down budget plan to avert ‘fiscal cliff’

In the wake of the failure of Boehner’s Plan B (it couldn’t pass the House, and was pulled before a final vote) — and also in the wake of the near-universal rejection [by progressives] of Obama’s “Chained CPI” proposal — the president has put a new offer on the table to help avoid the so-called “fiscal cliff.”

Then everyone walked away from deficit negotiations to celebrate the holidays and catch their breaths.

Whew; it’s been some ride.

Progressives should feel proud, by the way. It’s impossible to say we caused Obama’s new offer (details immediately below), but we certainly raised a stink.

Reporting on the offer is everywhere. This is the LA Times version (my emphasis and some reparagraphing):

In the aftermath of House Speaker John A. Boehner’s defeat on his “Plan B” tax plan, President Obama offered a scaled-down, stopgap budget proposal Friday afternoon designed to avert tax increases and spending cuts due to take effect next month. Obama’s latest proposal would raise taxes on wealthier Americans, extend jobless benefits for 2 million Americans and lay unspecified groundwork “for further work on both growth and deficit reduction.” …

The new offer appeared to be a rollback of proposals Obama made in talks that Boehner broke off earlier in the week.  Obama  did not explicitly say so, but he again wants to raise taxes on all household income over $250,000 — his initial position — and to temporarily postpone spending cuts that are scheduled to begin in January. He would keep tax rates the same on the first $250,000  for families and $200,000 for individuals.


Cliff via Shutterstock

By implication, changes to Social Security (the “Chained CPI” proposal for which Obama took so much heat) is not included. The scaled-down offer includes just the items bolded above — tax increases above $250,000 (yes, that is still a very big number), postponement of the sequester, and extension of jobless benefits.

If that’s the case, if this is the entire offer, we have a win — so far.

But don’t hold your breath; the players return to the field on December 26 (or so) and there will be back-channel chatter in the meantime. (“How’s your Christmas, John?” “Sucks, I lost Plan B. Yours?” “Sucks, I lost Chained CPI.”)

So there’s much to fear. My goal has always been January 1 with no damage done. It’s only December 22; lots of time for mischief. Speaking of which, friend-of-the-rich Steny Hoyer, Pelosi’s number 2 in House Dem leadership, told the TV cameras yesterday:

Both Leader [Nancy] Pelosi and I, on behalf of the Democrats in the House, said if the President and Speaker Boehner reach an agreement, that we will do everything we can to make sure that that agreement has the votes in the House of Representatives to pass.

In other words, whatever Boehner says yes to, Pelosi will hand him enough Dem votes to pass it. So much for the rebellion from Boehner’s tea-drinking back-benchers. I counted 45 of them; apparently Pelosi has at least 45 Dems to cover the shortfall.

Boehner’s bargaining position

With all that in mind, consider John Boehner’s bargaining position. On the one hand, if he wants to be voted Speaker in January, he needs the support of his caucus. On the other hand, apparently he can ask for whatever he wants from Obama, and if he gets it, the House Dems will give it to him.

Consider also that all of Washington is filled with “fiscal disaster” talk. Everyone who mentions it, from CNN to Maddow on MSNBC, builds into their “news” talk the assumption that going “over the cliff” would be a catastrophe. This Pete Peterson–created idea — driven as it is by millionaire employees of billionaire media owners — puts enormous pressure on Obama to fold.

If it weren’t for that Speaker’s vote in early January, it might be tempting for Boehner to ask for the moon come December 26. At this point, it’s a game of chicken. Pete Peterson runs out 50 feet and draws a chalk line in the sand. Then he comes back to Obama and Boehner and says “Pretend that’s a 40-mile drop. Now start your engines; go!” And they do.

Boehner knows that Obama buys what Peterson is selling — or he knows that Obama will be reamed by the press if he doesn’t pretend that Peterson’s line-in-the-sand matters. Whatever is true — that Obama fears Peterson, fears the press, wants what Peterson wants anyway, or all three — it would be tempting to bet, if you were Boehner, that Obama will hit the brakes first.

Still, there’s that Speaker’s vote. It’s going to be a fascinating after-Christmas week.

[Update: If David Koch reiterates his approval of tax hikes and says to his AFP-financed House members, “Take the damn deal,” it could be over in the House. If so, Boehner will get enough R’s to pass Obama-Boehner, and also remain Speaker in 2013. We’ll see. (Re-edited slightly.)]

And in the Senate, there’s Harry Reid

The other news, which wasn’t treated as such, was that Harry Reid was in the meeting with Obama prior to Obama’s announcement. Back to the LA Times account:

Before leaving for his home state of Hawaii for a short Christmas vacation, the president spoke with Boehner on the telephone and met with Senate Democratic Leader Harry Reid of Nevada. Then Obama delivered brief remarks before reporters in the White House press room.

You can read this in either of two ways. Keep in mind that Reid has been good — so far — on keeping Dem mitts off of Social Security. For example, this from 2011:

“I will not support any change to Social Security for the next 20 years”

That doesn’t mean he means it; it just means he said it. Still, he could mean it. You just never know. Reid also signed Bernie Sanders’ no-cuts letter just a month ago.

With that in mind, look again at that Times quote: Obama met with Reid, then delivered his remarks. You have to conclude that Reid is on board the Obama express at this point. Is Reid the reason that Chained CPI came off the table? Or does Reid know that it’s going back on the table, and is willing to trade it away in the Senate? One of those two things is true.

What you should do

Keep up the pressure. Senate phone numbers here. House phone numbers here. White House comment phone: 202-456-1111. Don’t quit what worked so far. And do lobby those anti-Boehner Republicans.

You have to assume that Obama will fold on Chained CPI, or put some other knife in the back of social insurance, before December 31. As Jane Hamsher has recently pointed out, Obama’s been circling that prize like a fox circles the henhouse since before his first inauguration. Which means that Obama will take another run unless Harry Reid is blocking him. We have no way to know if that’s the case, so assume the worst.

Will Boehner play a strong hand? Will Obama again replay his role as the Man Who Can’t Say No? Only time will tell. And only you can stop them if they try.

In the meantime, I want to leave you with this piece of music. I personally don’t think Obama is weak; I think he’s strong and progressives are the enemy he’s playing against. But telling him he’s weak, telling him he’s acting less than fully testosteroned, might get his manly attention. It might even rub his fur the wrong way.

Enjoy the holidays!


To follow or send links: @Gaius_Publius

Gaius Publius is a professional writer living on the West Coast of the United States.

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