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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33 Responses to “Obama offers a scaled-down budget plan to avert ‘fiscal cliff’”

  1. Bill_Perdue says:

    Never too late.

  2. Kim_Kaufman says:

    Uh, too late for a march. We effed up by not doing this BEFORE the election.

  3. MichaelS says:

    One great flaw in your argument — he never gets any resistance in fighting for right-wing policies. NEVER. He calls in Nancy Pelosi or Harry Reid and they have a nice chat, and the deed is done. Even Bernie Sanders, my hero, never takes it to the mat. Has any Democrat EVER filibustered ANYTHING in recent history? So it’s hard to say Obama “fights” for right-wing issues when there’s never any fight in opposition to it… you can’t “steam-roll” something that already lays down and surrenders.

    And come to think of it, that may also be why he always seems to choose a more right-wing-dominated path… it’s ALWAYS the path of least resistance and the man cannot stand to engage a political fight. JUST ONCE the Dems should grow a set and stare him down. I think you’ll see a changed leader. (We saw a hint of that with DADT… Pelosi and Reid were going ahead with repeal, with or without Obama… he had no choice but to jump on board or be left looking like an idiot.)

  4. Qwert says:

    He didn’t just let the banskters off the hook, he relentlessly pushed to halt all investigations of bank fraud at the state level, and succeeded. That’s clearly impossible to reconcile with the “fear of confrontation” fairy story we keep getting.

  5. Qwert says:

    Obama may not be progressive, but he is DEFINITELY weak. He is desperately afraid to take on any confrontation.

    Utter bull. He was able to steamroller 49 state attorneys general into dropping dropping their investigations of fraud by the megabanks (something theoretically beyond his power to do constitutionally), strong-armed Spain into dropping torture investigations of Bush officials, squashed primary challenges against conservative Dems, imposed a surveillance regime beyond anything Bush dreamed of, waged a war against the express wishes of Congress, and that’s all just off the top of my head.

    He’s not “weak” at fighting for left-wing policies, he fights for right-wing policies and is very successful at it.

  6. Bill_Perdue says:

    The indictment

    Obama cultists, by now the majority of Democrat party activists, support Obama and Pelosi’s plans to gut Social Security COLA benefits because they’re become, in effect and in practice, right wing scabs. They have no compassion for retired workers who will be squeezed and will have to choose between food and meds. Their party agenda and loyalty supersede their loyalty to working people and the GLBT communities.

    Exhibit One.

    Obama said “The truth of the matter is that my policies are so mainstream that if I had set the same
    policies that I had back in the 1980s, I would be considered a moderate Republican,” he told Noticias Univision 23, a Miami based Spanish language station. Unluckily for him, lots of people are bilingual and the English speaking press picked up the story. http://thehill.com/blogs/on-the-money/domestic-taxes/272957-obama-says-his-economic-policies-so-mainstream-hed-be-seen-as-moderate-republican-in-1980s

    Exhibit Two.

    As Jane Hamsher at FDL points out “Obama has made a deliberate and concerted effort to cut

    Social Security benefits since the time he took office. FDL reported on February 12, 2009 that the White House was meeting behind closed doors to consider ways to cut Social Security benefits,

    and that the framework they were using was the Diamond-Orszag plan, which was co-authored by OMB Director Peter Orszag when he was at the Brookings Institute. …”

    Hamsher goes on to say “I don’t know why Obama wants to cut Social Security benefits. I do know that Obama has been honest about it from the start. In January of 2009, even before he took office, he told the Washington Post that he believed Social Security was a broken system and that “entitlement reform” was something he wanted to achieve during his tenure in office: Obama said that
    he has made clear to his advisers that some of the difficult choices–particularly in regards to entitlement programs like Social Security and Medicare – should be made on his watch. “We’ve kicked this can down the road and now we are at the end of the road,” he said.
    But it’s clear that he did not arrive at the decision to “reform” Social Security and cut benefits because he is a poor negotiator, or because of Republican arm twisting. It defies all logic and reason to look at his actions
    over the years and think that the President is now “capitulating” on Social Security”


    Exhibit Three

    Pelosi and Obama support chained-CPI’s. “Burgeoning liberal anger over a plan to lower Social Security cost-of-living increases as part of a fiscal cliff deal is having little effect on top Democrats, including Minority Leader Nancy Pelosi, D-Calif. Pelosi, and others, are unlikely to push back against President Barack Obama’s embrace of the idea in his latest fiscal cliff offer to Speaker John A. Boehner, R-Ohio.” http://www.rollcall.com/news/despite_liberal_backlash_pelosi_backs_obama_on_chained_cpi-220328-1.html

    Exhibit Four.

    “Some politicians in Washington are preparing to cut your Social Security COLA for good–even after two years without getting a COLA. This COLA cut has an obscure name: chained-CPI. But it would do real damage by changing the formula used to calculate the COLA. Here’s what you need to know about it: ·It’s a benefit cut. It’s not some minor technical change to the COLA. It’s a real cut to the benefits you have earned every year into the future.

    · It cuts benefits more with every passing year. After 10 years, your benefits would be cut by about $500 a year for the average retiree. After 20 years, your benefits would be cut by about $1,000 a year.

    · It hits today’s Social Security beneficiaries. Politicians like to say that their cuts to Social Security will
    not affect those getting benefits today. Wrong! Switching to the chained-CPI would hit all current beneficiaries.

    · We need a higher COLA, not a lower one. The current COLA is not large enough–it does not adequately account for large health care cost increases faced by seniors and people with


    Another excellent post by GP, except that I disagree with the idea of calling the WH and Congress.

    I thinks it’s wasted effort. Back in 2008 when Obama was twisting the arms of Democrats to pass TARP and Republicans were terrified of being associated with what amounts to Grand Theft cubed, Pelosi and Reid simply shut down phone and e-mail communication to the Congress. By now, with QE 4 on the horizon, they’re used to stealing trillions and giving them to banksters to draw interest and collect unbelievable salaries and golden parachutes.

    Instead I’d like to draw you attention to the 2009 GLBT March on Washington which became an huge anti-Obama rally and drew 250,000 demonstrably angry marchers. It occurred on Oct 11, 2009. With in a day or so, after change from wet to dry clothing Pelosi and Obama got the Hate Crimes bill passed and signed on October 28, 2009. Maybe it’s time for a new march on DC.

  7. 1nancy2 says:

    What a Charade. M M and S. Sec. are Gonzo with Bronzo…We stiffs know it. It WILL happen, so get ready to bend over…………..for the rich. “Gotta” help the billionaires. They need more of our $.

  8. AnitaMann says:

    Why would they deny Boner his speakership and thus create a power vacuum? Because they didn’t come to D.C. to govern. They came to wreck and destroy or at least throw a wrench into the mechanism of government. They can’t even pass their wish list.

  9. ezpz says:

    Funny thing (not haha, actually, yes haha) is that just like last time around, it was the incalcitrent republicans who saved us from 0bama’s grand bargain, it will be the republicans and mostly the teapartiers who will come to our rescue, though not intentionally or directly, of course…


  10. BeccaM says:

    I just look at what Obama’s done over the last four years — let the banksters off the hook, expanded executive powers (including extrajudicial assassination), negotiating away pharma negotiation, importation, and public option health insurance, dragging his feet on everything gay-related, who he nominated to Treasury and his catfood commission — and I see a center-right neo-liberal conservative with authoritarian tendencies.

  11. BeccaM says:


  12. karmanot says:

    Let’s start with Max Bacchus and follow the money.

  13. karmanot says:

    I agree! The Clintonistas and Obots might as well be Republicans.

  14. NCMan says:

    Thanks. Now that all makes sense to me. So, in theory, the dems could make a deal with Boehner to vote for him if he goes along with a dem deal to make up for the bagger votes he would lose.

  15. BeccaM says:

    Because to be elected Speaker, Boehner needs not just a majority of Republicans, but a majority of all voting members of the House — 218 votes, if I remember correctly. Come January, a very small number of extremist GOPers could act as spoilers and deny him the Speakership.

  16. Butch1 says:

    5…4…3…2…1… Wait for it … CAVE!!! I can see it and hear it coming. It won’t be long now. ;-)

  17. DonS says:

    So , in essence, we’re just one ‘demand’ (from Boehner) away — probably chained CPI — from Obama folding (or getting what he wants, depending on your viewpoint) again, a shitty deal resulting.

    And BTW, what’s wrong with just raising the cap. Where is that. Why cannot Obama be for that?????

  18. JD234 says:

    The Obama weak-vs-secretly-antiprogressive question is the equivalent to the dominant question during the Bush administration: criminally incompetent, or secretly intending all that destruction. We never did answer that, although it has seemed increasingly over the years that it was a mix of both.

    GP, it would be great someday if you could lay out the evidence for not-weak-but-secretly-conservative in a series of well-linked bullet points. These arguments come up all the time, and it would be useful to build a repository of the evidence pro and con.

  19. colleen2 says:

    But why would they bother?

    They would bother because the GOP has an enormous power vacuum and a lot of folks (mainly the religious right) want to fill that vacuum. These are people who think Orin Hatch is too moderate.

  20. colleen2 says:

    The only time Mr Clinton demonstrates a backbone is when he defends himself. He and the rest of his ‘centrist’ pals concentrated on demonizing the poor and working with the GOP to destroy the manufacturing sector during his presidency. This was a man who stood up in front of the entire Nation and pretended that a single mother could raise her children on her wages from Burger King. His ‘feminist’ icon of his wife was on the board of frickin Walmart.

  21. Ron Thompson says:

    In answer to the question on Boehner, it takes a majority vote to elect a Speaker. If 17 Republicans vote for someone else, he wouldn’t have a majority, and they have to elect a Speaker before the House can transact any other business, as the Speaker appoints the committees. If 17 of them were absolutely determined to destroy Boehner and damn the consequences, they could do it. But why would they bother? They’ve got his pecker in their pocket as it is.

    Am I missing something, or does the failure to raise the debt ceiling effective give Obama a line-item veto? By law, appropriations have been made, but by law the debt cannot exceed a certain amount. Doesn’t somebody have to decide which programs are cut in order to avoid further borrowing? And who could that possibly be other than the President? The Congress could pass a law, but could they override a veto?

  22. Kim_Kaufman says:

    I’ll go back to calling on Wednesday but I’m not optimistic. I read even Sherrod Brown was saying… “Chained CPI maybe not so bad.” Every out of state rep I called I said, “I’m calling from California… you know, the state where you come to raise money?” Once again, Obama’s lucky in that everyone’s talking about guns and what morons the NRA are.

  23. Ford Prefect says:

    Great points. I do think his “weakness” is a matter of perspective though. If you’re on the receiving end of his hostilities, he doesn’t come off as weak. More like “duplicitous, backstabbing weasel”.

    As for his nominees, it’s odd the way he typically abandons his “first choice” in favor of a more preferable hack afterwards. Rice is an exception, since she has a ton of enemies she earned all on her own, so that was an easy abandonment. But I seriously doubt Hagel was ever really in consideration. Obama doesn’t like people who will “tell it like it is.” He likes Yes Men/Women.

    Would Hagel sign on to interevention in Syria? Most likely, but probably not without a bunch of conditions being met. What about Iran? I don’t think he’d go for that at all, simply as a matter of the National Interest. So I don’t think Hagel was ever a serious contender, as he would be problematic when Obama decides to start a few more wars.

    I’m not as sure about “weakling” as I am about “soulless, conniving, duplicitous hack.”

  24. karmanot says:

    Because a fat head bagger counts as two.

  25. karmanot says:

    He’s Clinton without a backbone.

  26. silverkjk says:

    If Obama were serious, he would have deferred the sequestered items until it was time to deal with the debt limit, which would then given him a good negotiating point.

  27. Naja pallida says:

    Boehner only has around 25, pretty much all of them lame ducks, on his side. The rest are either Teabaggers, or scared to death of being primaried from the right next time around, so will side with whatever is the most obstructionist, imbecilic, hard right-wing position. Whether his Speakership is in danger is pretty hard to say. Nobody else has thus far stuck their neck out to suggest they want the job, because they know they will be doomed to fail just as Boehner has failed repeatedly over the last few years. Might as well just leave Boehner there to continue to be the figurehead of fail, while they continue to undermine him at every turn.

  28. NCMan says:

    I have a question in relation to the teabaggers. I was under the impression that there weren’t more than about 85 of them in this congress. There are about 240 Repugs in the house. That means teabaggers are a minority in the republican caucus.

    How does Boehner lose his job as speaker by pissing off the teabaggers? There are almost twice as many NON baggers as there are baggers.

  29. Ford Prefect says:

    Beware the head fake. It’s been something of a rule for about four years now that when Obama says things that progressives find somehow pleasing, it’s almost always a head fake. A bamboozle, if you will.

    If there’s one thing party leadership would like is for “liberals” to stop paying attention to what they are doing. If Obama has changed his tune, good. If not, we’ll just wake up one morning and find the looting has already commenced.

    It’s more than a little ironic that the GOP can manage to win by losing here. Their obstruction could prevent the looting of Social Security, for example, which would most likely help them down the road while the Dems come off looking like complete assholes (which they are). We have truly reached a bizarre place when dysfunction and incompetent obstructionism are our best hopes in saving us from the Democratic Party.

  30. MichaelS says:

    “I personally don’t think Obama is weak; I think he’s strong and progressives are the enemy he’s playing against.” Wrong. Obama may not be progressive, but he is DEFINITELY weak. He is desperately afraid to take on any confrontation. He habitually abandons friends and allies (Susan Rice, Chuck Hagel) simply because he’s afraid of the confrontation — and the opposition knows it and smells it. I truly don’t believe he wants any debt ceiling debacle, but he will give away anything in order to avoid a confrontation on that — progressive or not. He only supported gay marriage when forced to. He only supported DADT when forced to. And on and on. He’s a complete weakling.

  31. nicho says:

    Everyone involved wants to shred the social safety net, screw the middle class, and enrich the one percent. All of this is just a soap opera to convince us they don’t.


  32. Plisko says:

    Good article but I found myself wondering how exactly you draw a chalk line in sand. What can I say… OCD haunts my footsteps.

  33. Naja pallida says:

    Writing another letter to my Teabagger Congressman to encourage him to oppose anything Obama proposes, or any compromise deal Boehner offers. If I can’t let perfect be the enemy of the good, I’m damn well going to try to get the obstructionist incompetent bastards work for what I want to see happen.

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