"What Can You Live With?"

The Republican’s have provided the president with their counteroffer to his debt reduction proposal.  It offers steep spending cuts and modest revenue increases but does not allow for any increases in the tax rates.

Like the president’s initial offer…it is a non-starter.

Most Republicans understand that the president successfully campaigned on the issue of raising taxes on the wealthiest Americans.  They know that he cannot walk away from this deal without some sort of increase in the marginal tax rates for the rich without appearing weak.

The president knows full well that Republicans in the House were sent to Washington to kill any measure that includes an increase in taxes.  He knows that if they cave in to his demands they run the risk of a primary challenge in their next election.

Yet, in an effort to cover their political flanks they present proposals that leave the other side no other option but to just say “NO.”

What is missing here is the one thing that the voters most want to see coming out of Washington…compromise.

The key to any successful negotiation is to find a way to get what you want while at the same time giving the other party something they can live with.  Both parties need to feel good about the end result in order to allow for productive talks on future issues.

Perhaps the president could agree to substantive cuts and comprehensive entitlement reform that would help to ease our long term debt.  In exchange Boehner might offer a flat 30% minimum tax for millionaires along with a modest increase in the top marginal tax rates to 37% instead of the 39% currently on the table.  Increased revenue + spending cuts = compromise.   

Compromise…”What can you live with?”  That is what is missing in Washington. 

Boehner is a reasonable guy.  So is the president.  Our guess is that if the two of them were allowed to craft a deal by themselves it would be done in 24 hours.  That is the easy part. 

The difficulty comes in selling the deal to their prospective caucuses.  The Democrats will whine but they will go along with whatever deal the president makes.  However Boehner will have a difficult time in selling any tax increase to his Tea Party base. 

We’ve seen this movie before.  Boehner and Obama reached a “Grand Bargain” on revenues and spending cuts in 2010 only to have it fall apart when Boehner could not rein in his base.

Boehner and Obama need to reach a compromise that is good for them and good for the country.  If the Tea Party folks won’t go along then Boehner needs to gather the votes he can and leave the Tea Party behind.

“What can you live with?”  That’s the key. 

The country should not be held hostage by those who refuse to compromise.