January 03, 2013
The Republicans blinked and now they are toast. There is an old saying in business: If you aren't willing to get up and walk away from the negotiating table then you're just begging.
Obama refused to negotiate and basically said it was OK with him if they went over the fiscal cliff. We'll never know if he was serious because House Speaker John Boehner and Senate Minority Leader Mitch McConnell panicked. Whether or not Obama would have gone over the fiscal cliff is academic at this point because he did what good negotiators do – he convinced his opponents that he was willing to go over the cliff if they didn't agree to his terms.
The negotiations by McConnell with Vice President Joe Biden got the small concession that taxes would be raised on families with incomes over $450,000. Obama wanted it to be $250,000, but it doesn't matter because Obama got the Republicans to support tax increases.
And it's not just a tax increase on those making over $450,000, it's a tax increase on over 70 percent of Americans. So Obama got the Republicans to vote to raise taxes on most Americans – something they said they wouldn't do.
Not only did Obama get Republicans to support tax increases, he got them to agree to raise spending. The deal that McConnell and Boehner voted for raises spending by nearly $4 trillion. The deal includes $1 in tax cuts for every $41 in increased taxes.
If the Republicans were going to cave like this, why bother to wait until the last minute?
The huge problem is that this leadership is done. The Democrats now know that they will cave. The Democrats have to wait until the last minute, but in the end this Republican leadership team doesn't have the intestinal fortitude to hang in there.
It's astounding how badly Obama beat the Republicans. First he got them to agree to this fiscal cliff deal a year ago, which was brilliant. He pushed the showdown out past the election. Obama will never run for anything again, so he really doesn't have to worry about public opinion. Plus, he does have the media on his side. So no matter what Obama does he knows that he has the full support of the mainstream media and it will work overtime spinning everything in his direction.
However, despite the unquestioning media support, pushing the face-off out past the election gave Obama a huge advantage. The Republicans were no doubt hoping they could beat Obama at the polls in November, but they didn't come close.
With the fiscal cliff looming and no election to worry about, Obama had a strong hand. The fiscal cliff raised taxes on everyone, something that Obama wants to do, and this way he could do it and blame it on the Republicans. The cuts included by going over the fiscal cliff may have been devastating, but half were to military spending, which Obama also wanted to do, and once again by going over the fiscal cliff he could blame it on the Republicans, which is what the press was doing.
So Obama could sit back with confidence and say, OK, either agree to my terms or I'm willing to jump off that cliff. The Republicans lost any bargaining power they might have had when they admitted to being horrified to go over the cliff. The negotiating tactic that might have worked would have been to agree with Obama that going over the cliff would not be bad and discussing how to deal with the issues that would arise, like a recession.
You've got to convince the other guy that you are willing to walk away from the table, and in the negotiations the Republicans convinced Obama that in the end they would cave, and they did.
Obama in the end gave up almost nothing. It doesn't matter where you put the limit on tax increases on the wealthy because the point is not to raise money. It's just politics. Obama has been saying that the rich don't pay their fair share. He doesn't give facts and figures to back this up; he just says it over and over again until people start believing it. Obama says the rich don't pay their fair share so he wants to raise taxes on the wealthiest Americans.
The Republicans have for 20 years opposed raising taxes. The Republican argument is that the problem is not that the government doesn't have enough money, it is that the government spends too much money. The way to solve the fiscal mess according to Republicans is to reduce spending and reduce taxes. You reduce spending to lower the deficit and you reduce taxes to stimulate the economy.
Even Obama admits that reducing taxes stimulates the economy. What he hasn't explained is why he wants to raise taxes if reducing taxes stimulates the economy. But Obama got to raise taxes on the wealthy like he wanted, and he got to increase spending by nearly $4 trillion. But he also got to raise taxes on most everybody else and to extend unemployment benefits for another year. Extending unemployment benefits encourages more people not to work, which is not what is best for the economy. But it sure is a great way for the Democrats to buy votes.
It was a win all the way around for Obama. Then he got to get on Air Force One, fly west and wake up in Hawaii. Talk about having a good week. This one is going to be hard for Obama to beat.
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Considering the way the votes tallied in the House the deal could have been made weeks ago. If the Republicans were going to pass a fiscal plan by mainly using the votes of Democrats, they didn't need to do all of this negotiating.
Only 85 House Republicans voted for the plan and 151 Republicans voted against it. So the plan lost in the Republican caucus by an almost 2-to-1 margin. But 172 House Democrats voted for the plan and only 16 Democrats voted against it.
Once again it is as if Obama had Democratic majorities in both houses of Congress.
The most interesting part of the House vote is that Boehner was one of the 85 who voted in favor of the compromise, but the number two House Republican, Rep. Eric Cantor, voted with the majority of Republicans against it.
Members of the House are sworn in on Thursday and a new Congress takes over. This complete and utter defeat may mean that Boehner doesn't have the votes to remain speaker, which would be a great thing for the Republican Party. As long as Boehner is in charge Obama knows he just has to wait him out and Boehner will blink.
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At the end of the day Obama said he would not negotiate the debt ceiling increase that will be needed in February. The government has already borrowed up to the $16.4 trillion limit and the ceiling will have to be raised in February for the government to continue to function. Obama says Congress has to pay the bills it has already run up and he isn't negotiating.
Obama knows that he doesn't have to negotiate because in the end the Republicans will cave. So he's right. He shouldn't have to negotiate, unless the Republicans elect new leadership that is willing to let the government go into default on payments if Obama is not willing to make concessions.
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Once again the Republican Party manages to prove beyond a shadow of a doubt why it is called the Stupid Party....continued on page 2