Yesterday began with President Obama’s base grappling with how to interpret the new concessions he’d offered House Speaker John Boehner in their fiscal cliff negotiations.
There was – and is – serious question over the left’s willingness to abide the framework Obama proposed. After demanding that tax rates be restored to their Clinton-era levels on income over $250,000, the president is now willing to accept a $400,000 threshold. He’s also willing to let the payroll tax holiday expire – at a cost of $1,000 a year to the average family – and to agree to a modified form of chained-CPI, a less generous method for calculating Social Security benefit payouts. Measured against what would happen if there’s no deal at all before January 1, there’s good reason for liberals to wonder if Obama is giving away too much in pursuit of a bipartisan accord. There are conflicting signals from leading Democrats about whether the party would go along with this plan.
But all of that may be moot because of what’s now playing out on the other side of the aisle. While it appeared that Obama had ceded considerable ground to the GOP, especially relative to the leverage he enjoys, the reaction from Republicans on Monday was jarringly negative.
First came Boehner’s declaration that Obama’s terms were unacceptable and that he would begin pursuing “Plan B” – a House vote simply on extending the Bush rates for all income under $1 million. This wouldn’t help resolve the standoff, since Senate Democrats say they’d never act on Boehner’s plan. There are also doubts about how much support Plan B has among House Republicans, more than two dozen of whom apparently spoke out against it at a GOP conference sessions yesterday.
Not that Republicans are any warmer to Plan A. The Heritage Foundation, which Tea Party icon recently left the Senate to head up, on Monday ripped into the most recent blueprint Boehner presented to Obama – the one that Obama was working off of when he made his offer to Boehner Sunday night. The framework that was emerging from that back-and-forth is also apparently opposed by influential conservatives on Capitol Hill, most notably Paul Ryan.
There are two ways of looking at what Boehner is now doing with Plan B. It’s possible that it’s all posturing; that he recognizes how hard it is to sell any compromise to the House GOP and that he really needs to convince conservatives he’s exhausted every last means of avoiding giving ground to the president. He could, in other words, just be putting on a show, with the hope that more conservatives will speak up to encourage a deal with Obama as January 1 approaches.
But, as Ezra Klein wrote on Monday, it’s also possible that Boehner has simply concluded that he doesn’t – and won’t – have the latitude he needs to sell the kind of deal he and Obama seemed to be inching toward earlier this week. This wouldn’t exactly be unprecedented; it’s what blew up the “grand bargain” talks between the speaker and the president last year. The current showdown was supposed to be different, because of Obama’s supposedly superior bargaining position, but as Klein points out, conservatives have lately been fixating on the debt ceiling, which we’re due to hit in a few months, believing they can use it to counter Obama’s leverage.
This complicates Boehner’s position. If his members are convinced they can use the debt ceiling to extract major concessions from Obama, then why would they sign off on any deal now that isn’t light on tax hikes and heavy on spending cuts, especially to the safety net? And if this is where things stand, it presents the White House with a dilemma: give more ground in pursuit of a deal, or stand firm and go over the cliff if need be? As Paul Krugman notes, if January 1 comes and goes with no deal, Obama could probably then get a tax package more to his (and Democrats’) liking than what’s on the table now – with no cuts to Medicare, Medicaid and Social Security. The flip side is that he probably wouldn’t be able to get an extension of unemployment insurance or any additional funding for infrastructure.
So for now, it no longer appears that a deal is imminent. Any accord will ultimately need to pass with real support from both parties, since there were also be large numbers of defections on both sides. This is a particularly tricky issue on the Republican side, given the built-in distrust many conservatives have for Boehner. Obama has a lot more wiggle room with his party than Boehner has with his.