StanCollender'sCapitalGainsandGames Washington, Wall Street and Everything in Between



Fiscal Cliff "Negotiations": So Far Just Alpha Males Pounding Their Chests

05 Dec 2012
Posted by Stan Collender

My column from today's Roll Call points out that you can't, as House Speaker Boehner wants us to believe, say the fiscal cliff discussions have stalled because they haven't really even started yet. So far, the only thing that's happened is the federal budget equivalent of two alpha males pounding their chests in front of the other.

Fiscal Cliff Talks Aren't at a Standstill; They Haven't Started

After all of the lengthy, difficult and failed budget negotiations over the past few years, did anyone really think dealing with the fiscal cliff was going to be fast, easy and painless?

The discussions about avoiding or mitigating the effects of the fiscal cliff were always virtually guaranteed to be extremely contentious and far more hostile than friendly. For that reason, it’s hard to understand why anyone thought the statements made at the end of last week and over the weekend that the fiscal cliff discussions between the White House and congressional Republicans were already stalemated were an accurate representation of what was actually happening.

Like the extended arguments about the shape of the table that took place before serious negotiating about ending the Vietnam War began, the only action that has occurred so far on the fiscal cliff is the White House and Republicans pounding their chests, trying to be recognized as the alpha male. Like the discussions about the shape of the table, nothing will be decided about taxes and spending until this stops.

In fact, the three key elements to resolving the fiscal cliff situation are all still missing.

First, neither the White House nor the GOP has yet shown any willingness to negotiate with the other. To the contrary, they each have done little more than stake out starting positions by giving the other side what so far is an impossible-to-accept alternative. That’s demanding, not negotiating.

Second, congressional Republicans have not yet agreed among themselves what they want from and are willing to accept in a deal. The stated GOP position so far has been nothing more than having the White House do what it did last summer during discussions on raising the federal debt ceiling: negotiate with itself by offering something that is virtually certain to be rejected by Republicans. Now that the administration has shown it’s not going to do that this time, Republicans have to figure out for themselves just how far they are willing to go.

I was told this week that this intra-GOP discussion hasn’t been settled yet because there are multiple factions with Republican ranks both between and within the House and Senate. Until that’s settled, Speaker John A. Boehner, R-Ohio, will be as limited in what he can offer the White House as he and House Majority Leader Eric Cantor, R-Va., were in all of the failed budget negotiations that took place last year.

That makes this fiscal cliff a very different situation than the one that existed when Speaker Newt Gingrich, R-Ga., was negotiating with President Bill Clinton on the budget in the 1990s.

While Gingrich could cut a deal with Clinton and be relatively certain the GOP rank and file in the House and Senate would follow him, Boehner doesn’t have anything like that same assurance now. Because of that, he’s still negotiating at least as much with Republicans as with Democrats, and his public intransigence so far is both a stalling tactic and an effort to win the confidence of his party colleagues so the serious negotiations can begin.

Meanwhile, the White House will likely sit back and wait until Boehner gets that support or specific marching orders, or until some other Republican emerges who can negotiate on the GOP’s behalf.

Third, other than receiving increasingly dire warnings, nothing bad has happened yet to force everyone to negotiate seriously.

The stock market has indeed gyrated since the fiscal cliff replaced the 2012 elections as the lead story in the news. But the day-to-day ups and downs have hardly been more than what’s been typical over the past year. Multiple CEOs and corporate interest groups have issued warnings about layoffs and lower profits if the cliff isn’t avoided and have traveled to Washington to press their cases. But so far that’s been all talk and little action. And the warnings about higher taxes now come hourly rather than daily. But no one’s taxes have actually gone up, and the amounts withheld from our paychecks haven’t yet changed.

And as surprising as it might be to those of us for which the fiscal cliff has become a reason for living, there still is great skepticism from those outside the Beltway about it ever actually happening. As a result, the voter uprising that many in Washington are expecting about the tax increases and spending cuts hasn’t happened. In other words, no lawmaker and no one in the White House has yet suffered much politically from what has or, in this case, hasn’t happened. That has made it easy for the negotiating to be slow-going.

The only thing that is likely to change any of this is the calendar. Without the intense pressure of the fiscal cliff actually happening, there seems to be little incentive for any serious negotiating to take place. A market drop or significant announced layoffs before Jan. 1 might change that. So, too, would a sudden realization by those who are still skeptical that the cliff might not be avoided after all.

But until that happens, you really can’t say the fiscal cliff negotiations are at a standstill. The truth is they really haven’t started yet.

Shape of the table? The

Shape of the table? The Republicans aren't even in the room. First, they must realize that they can not negotiate over the tax increase on the top 2%--that is a done deal. Second, they must recognize that inasmuch as neither Social Security or Medicare are part of the "fiscal cliff," they cannot be included in the negotiations. Third, they must accept that the essence of the negotiations is how much less than sequestration cuts to nondefense spending they are willing to accept for Obama's acceptance of less defense cuts. It appears that they don't even have a clue.


CAP proposal

The Center for American Progress has a proposal which I think many outside DC would find attractive.

http://www.americanprogress.org/wp-content/uploads/2012/12/CAPTaxPlanRep...


1. I thought that step 1 of a

1. I thought that step 1 of a negotiation process is laying out what you want with specificity. Obama has done that. Boehner has not, apparently because he can't.

2. It's hard to imagine that Boehner couldn't locate a faction of 6 Republican Senators to block filibuster.

3. So have all factions within the House Republican caucus arrived at Step 1 yet? Can they say what they want with specificity? I've heard proposals that total $300 billion of specific cuts over 10 years. That's pretty far from the $2000 billion of deficit reduction proposed by the President. For that matter does any Republican faction have a negotiating position?


Re: Republican Opening Position

The GOP opening position is basically "Path for Prosperity". I've yet to see Simpson-Bowles embraced other than in name only.

Oh wait, there was the LaTourette plan that was put forth last year.

I liked his quote:
"“This is going to be a discussion between the top leaders of the House and the White House,” LaTourette said. “And when they signal — sort of like the pope being elected. You know, when the white smoke comes out of the Capitol, we can come back and execute the deal.




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