Saturday, December 22, 2012

Barack Obama's Christmas Wish

Or John Boehner's gift to Barack

Or the fiscal cliff is coming and you better be nice. Or we're all getting coal for Christmas. Or the Senate wants in on what may end up a Christmas with no gifts, at all. Or the Senate doesn't really want any part of Christmas. Or something.

To recap. Obama told Boehner that he is willing to settle for tax increases on households earning $400,000 or more, and might be willing to adjust cost-of-living increases for Social Security, maybe.

Boehner, thinking that he couldn't sell such an agreement to House Republicans, decided to test his own leadership by proposing legislation that would maintain most of the Bush tax cuts and increase taxes only for households making one million dollars or more. Feedback from his caucus persuaded Boehner that he would suffer legislative defeat on the proposal, a definite embarrassment for the speaker. So, he decided to humiliate himself by pulling his proposal without a vote and go home to Ohio. His last words were something like "let Harry (Senate Majority Leader Reid) do it."

Maybe that is Reid's Christmas wish, but it didn't sound like it when his Democratic colleague, Sen. Charles Schumer, said, "we're not going to want to come to a deal if we know Boehner isn't going to move it in the House."

Anyway, Senate Republicans have the filibuster to use against any deal. And, in comments reported by the Washington Post on Saturday, Senate Minority Leader Mitch McConnell sounded like he agreed with Schumer's statement. No enthusiasm for leadership there.

Still, though it seems improbable, there might be enough Republican votes in the Senate to shut down a filibuster. It would take seven Republicans to do so and, probably, a fiscal cliff deal that doesn't protect the wealthy as much as Boehner has sought to do, reduces some scheduled cuts to the Pentagon budget, and cuts Social Security COLA increases a bit (maybe including protection for low-income recipients). To complete the deal would then take support from all House Democrats and 17 House Republicans, or some mix of the two caucuses that adds up to 218 votes in the House.

Not only does such a deal seem improbable, it would leave larger budget cuts, stimulus spending, further revenue increases, and an increase in the authorized national debt to be negotiated by the same parties in January. Failure to address everything on the table in a satisfactory way means reduced unemployment benefits for long-term unemployed, tax increases for low- and middle-income earners and steep cuts for social programs. The Obama administration can take certain steps to put off the impact of some tax increases and spending cuts, but those steps likely will not do much to keep the stock market from tanking, or to prevent business investment and hiring from dropping significantly, or to avoid dropping back into recession.

So what seems likely to be the outcome of all of this? One of the following, I think:


1. Obama turns out to have been more clever than most people thought. Polls show that a significant majority of Americans will blame Republicans more than Democrats for failure on the fiscal cliff. This may well be a large part of Obama's willingness to hold out for a deal that protects low- and middle-income households, extends unemployment benefits and includes new stimulus spending. He gets some of this stuff in a proposal that passes the House and Senate between Christmas and New Year's and enters 2013 looking like a leader with an ability to get more of what he wants from demoralized Republicans.


2. Obama turns out to have been more of a compromiser than Democrats want and gets Republican votes in the House and Senate for a deal that gives up too much on entitlements and leaves extreme right-wingers in Congress feeling like they can still wag the dog. He enters 2013 with little chance of protecting social spending from further cuts and having to give in further to get congressional Republicans to raise the debt ceiling.


3. Obama holds the line and we dive over the cliff, causing a certain amount of economic panic as we enter 2013. Republicans will get the lion's share of the blame for the damage, but will be consoled by the ability to vote for tax cuts as part of any eventual agreement. It will be too late to prevent the collateral damage that will fall primarily on working folks and communities of color in the first quarter of the year.


4. Right-wing Republicans continue their zealous campaign to cripple the federal government throughout 2013 and turn the legislative session into trench warfare, insuring deeper recession and, likely, the longest mid-term election campaign in history. Even a shockingly large Democratic victory in the 2014 elections will do little to immediately relieve the longest and deepest economic downturn in American history. European and Asian economies will suffer even worse.


5. Mutated combinations of some or all of the above are possible. The actual outcome could be an either more or less disastrous hybrid and almost certainly a sterile one.

Merry Christmas, or something.

1 comment:

  1. I can't resist the urge to comment on my own post, to wit:

    Without Obama, the actual reality would be a true horror. And I really do think he is playing this whole situation decently well.

    I also think that Republicans will continue self-destructing and Democrats will get their own house in improved order over the next four years. And another four years, at least, for a Democratic successor in the presidency is a decent possibility.

    Think of the damage that could be addressed over eight years, or more. Think of the Supreme Court justices that could be appointed, the Citizens United decisions that could be overturned, the financial transactions taxes that could be implemented, the budget sanity that could develop, the public school systems that could be restored, and all the happy so-ons and gratifying so-forths that could evolve.

    I will blog further about such things, but, for the moment, there is certainly a rough beast slouching toward Bethlehem.