"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.         

This & That!

-The “New York Times” is running a fascinating investigative piece on the burgeoning role government subsidies play in the world of business.  NYT reporter Louise Story details how cash strapped state and local governments are paying billions in incentives and subsidies to lure businesses to their communities with nothing to show in return.  Local communities find themselves cutting public services in order to afford these huge incentives.  For example, the amount of money New York City spent last year in tax credits to lure filmmakers to the city equals the cost of hiring 5,000 public school teachers.

The three part piece: “Unites States of Subsidies” runs Sunday-Tuesday.

-There are exactly four weeks left until the country plunges off the proverbial fiscal cliff.  Lawmakers return to the Hill today to resume their political dance.   Republicans are still flabbergasted by  Democrats having the nerve to offer a left leaning proposal that includes $1.6 trillion in new taxes, $50 billion in new stimulus and a provision that gives the president unlimited power to raise the debt ceiling.  After all Democrats usually start these types of negotiations by giving Republicans 70% of what they want and then in short order caving in on the remaining 30%.  But elections have consequences and 51% of the people told the president to raise taxes on the rich.

We don’t expect much to get done on this until next week.  That is when the lawmakers’ spouses will start pressuring them to get off their ass and cut a deal so they can be home for the holidays.  One thing lawmakers don’t want to do is return to Washington the week between Christmas and New Year’s.  It is always interesting to watch how deals of this magnitude suddenly come together when the procurement of available airline tickets becomes an issue.

-The Republican Caucus finally appointed a woman to a chairmanship position.  Still red faced over the optics of 19 pasty faced white guys serving as new committee chairmen for the newly “inclusive” Republican Party, the caucus appointed Rep. Candice Miller (R-MI) to head…wait for it…the House Administration Committee. 

“I’m not sure which is worse...” said one Democratic official…”refusing to have any women chair a legislative committee or only appointing a woman to chair the Congressional Housekeeping Committee.”     

            

The Shoe Is On The Other Foot

In spite of the seriousness of the situation…this is actually pretty entertaining.

Treasury Secretary Timothy Geithener went to the Hill yesterday and delivered the president’s tax and spending proposal to Republican leadership.  The proposal includes $1.6 trillion in tax increases, $400 billion in spending cuts and $50 billion in new stimulus spending.

To say that Republicans are less than enthused by president’s proposal would be an understatement.  In fact they are apoplectic.  The only thing infuriating them more than the proposal is the president leaving Washington today to take his case to the people instead of closeting himself in negotiations with them. 

Elections have consequences and the Republicans cannot get their head around the fact that the president won.  After four years of being obstructed by Republicans at every turn, President Obama is using his newly elected status to his advantage.  He is negotiating from a position of strength.  The president might choose to quote his predecessor, George W. Bush (remember him...Republicans are trying to forget…) who once famously said: “I earned political capital in this election…and now I’m going to spend it.”

Republicans are boxed in a corner.  If they cave in to the president’s demand for tax increases for the wealthy they risk a Tea Party/Grover Norquist led primary challenge come next election.  If they stand firm on their “no new taxes” pledge they risk taking the country over the impending fiscal cliff.  And polls show that an overwhelming majority of Americans will blame Republicans if the country takes that plunge.

This election brought us so much political brinksmanship and kabuki theatre that it often became difficult to understand where certain candidates stood on the issues at any given time.  But one thing was very clear throughout this campaign; the president consistently said he wanted the wealthiest Americans to pay a little more.  The voters agreed.  So it should come as no surprise that the president intends to raise taxes on top earners while maintaining the status quo for the middle class.

Republicans like to point out that they won the House and that they were sent to Washington by their local districts to hold the line on government spending.  That may be true.  But while Republicans in the House may have carried their local districts by overwhelming margins, the fact is their party lost the in the national election; and in this country the will of a majority of ALL the people rules.

Republicans need to calm down.  This is the president’s opening offer.  Make a counter offer! 

Or after four years of just saying “no” have Republicans simply forgotten how to negotiate.      

      

      

There Was An Election On November 6th...

Republicans seem to have missed the fact that there was an election on November the 6^th…

…and they lost. 

The president defeated his Republican challenger in the popular vote 51%-47%.  The president won 332 electoral votes.  In election parlance that is referred to as a “beat down.” 

Democrats also picked up seats in the Senate including the nationally publicized race in Massachusetts where Elizabeth Warren soundly defeated Republican incumbent Scott Brown. 

Yes, the voters did return control of the House to Republicans.  But Democratic House candidates drew 400,000 more votes than their Republican opponents.

The president won among African-Americans, Hispanics, Asians, women, LGBT, as well as the “youth” vote.  The only demographic that went for Romney was white males.  

Any way you slice it, this election was a clear sign that voters approved of the president and his policies.

Immediately after the election a majority of Republicans responded with claims of understanding and introspection.  They claimed to understand the changing demographics.  They claimed to understand that they needed to reach out to African-Americans, Hispanics, women and other minorities that they had ignored in the past.  They promised to be more tolerant, more inclusive, more willing to compromise and more accommodating to the will of the country.

As the majority party in the House, the Republican Caucus has the privilege of appointing the new committee chairs for the upcoming congressional session.  The Caucus just announced those appointments…nineteen in total…

…NINETEEN WHITE MALES…not a black, brown, yellow, red or female face in the bunch.

So much for reaching out to minorities!

On another subject…Republicans and Democrats both agree that the Bush Tax Cuts should be continued for those making under $250,000.  The president has said that since both parties agree on this aspect of budgetary reform they should sign a bill extending those tax cuts immediately and work out the other more controversial components afterward.

 The bill would freeze taxes for 98% of Americans including 97% of the small businesses that Republicans are always so concerned about.  And since the agreement would come at the beginning of the holiday season, it would encourage spending and spur the economy at a time most critical for merchants and small businesses.

Freeze taxes for 98% of Americans.  Freeze taxes for 97% of small businesses.  Help merchants and other small businesses at the most critical time of their year.  Spur economic growth.

Sounds like a win, win!

Not for Republicans!

Republicans refuse to give in on this measure…even though they agree that it is a good idea…even though they agree that it will help the all important small businesses…even though they agree it will help spur economic growth…though they agree it will help the country…even though signing the bill is EXACTLY what voters want them to do.  They refuse to sign the bill unless they get something in return.  As John Boehner told the president; “Nothing comes without a price.”

So much for being more willing to compromise!

Someone needs to tell the Republicans that there was an election on November 6^th…

…and they lost.

   

More Questions Than Answers

John McCain’s obsession with Susan Rice continues.

UN Ambassador Susan Rice met with Republican Senators John McCain, Kelly Ayotte and McCain’s mini me, Lindsay Graham yesterday in an attempt to clarify her remarks concerning the attack on the Benghazi consulate.

The meeting failed to soothe McCain’s concerns.  In fact McCain said the meeting generated more questions than answers. 

Rice appeared on the Sunday talk shows five days after the attack and stated that according to intelligence reports the attacks were a spontaneous event resulting from the release of a YouTube video depicting the prophet Mohammed as a philanderer.  Rice stressed that the investigation was ongoing  

McCain has trouble believing that a spontaneous protest involves the use of RPGs and automatic weapons.  His concerns are valid.  But his obsession with Rice is boarding on creepy.

Rice was repeating the unclassified talking points provided to her by the intelligence community; a fact verified by the CIA.  McCain has labeled Rice as “unfit” for following those talking points even though there was conflicting evidence at the time that the protest was anything but “spontaneous.”  Had she strayed from those talking points and provided what at the time was classified information; she would have been labeled as “unfit” as well.  Damned if you do…damned if you don’t.

McCain’s focus should be on what happened that night in Benghazi…not a bunch of interviews on the Sunday talk shows.  He should be harassing the CIA and the State Department…not the Ambassador to the UN.

There are those who believe that this is personal. There are those who believe that McCain's is still bitter about his 2008 loss to Obama.  They see this witch hunt as nothing more than McCain’s attempt to embarrass the president by attacking one of his closest friends.

There are those who believe that this is political.  Susan Rice is considered to be at the top of the president's list of candidates to take over Hillary Clinton's position as Secratary of State.  Mass. Democratic Senator John Kerry is also high on that list.  If McCain can discredit Rice it would pave the way for Kerry.  Kerry's senate seat would have to be filled....and the very popular  Republican, Scott Brown is waiting in the wings. 

There are also those who believe that this is about race.  The president’s appointments that are “of color” have had a particularly difficult time navigating through McCain and Graham’s due diligence.

We have no idea what McCain’s motivation really is.  But we are certain that his obsession with Rice’s interviews is misplaced.

Four Americans died that night.  McCain should be trying to find the responsible parties and implement procedures to make certain that this tragedy never happens again.

His endless attacks on the UN Ambassador bring his motivation into serious question.             

Payback!

This is what happens when you shoot your mouth off for political gain.

UN Ambassador Susan Rice will meet with her critics today to finally put to rest “what she said and why she said it” regarding the attack on the Benghazi consulate. 

You may recall that Ambassador Rice went on the Sunday talk shows five days after the assault on the Benghazi consulate.  She stated that based on then current intelligence the attacks appeared to have been a simultaneous event ignited by protests over a YouTube video which portrayed the prophet Mohammed as a philanderer.  She stressed that the investigation was ongoing.

Senator John McCain and his political hangers-on savaged the Ambassador over her comments.  McCain said that it was clear that the attack was the handiwork of terrorists intent on harming US interests on the anniversary of 9/11.  McCain accused the Ambassador of intentionally obstructing the truth for political purposes.  He said that he would do everything in his power to block her anticipated nomination for Secretary of State as she was clearly “unqualified” to hold the prestigious cabinet office.

We now know that Ambassador Rice was simply repeating the intelligence talking points provide by the CIA.  We now know that Ambassador Rice had absolutely nothing to do with the raid on the consulate, the level of security in place at the time of the attack or the rejection of any requests for additional security at the consulate.

We now know that McCain was simply trying to embarrass the administration in the middle of a heated election.  We now know that McCain’s ire should have been more appropriately leveled at the individuals responsible for embassy operations and security…Secretary of State Hillary Clinton and then CIA Director David Patraeus.  We now know that McCain fully understood the political fallout from attacking these administration icons so he chose instead to pick on the low hanging fruit…anticipated Secretary of State nominee, Susan Rice. 

We now know that in the aftermath of the Republican election beat down McCain’s political shenanigans are coming back to haunt him and his party.

Ambassador Rice is the one who requested today’s meeting with McCain and his Senate Armed Services Committee buddies.  She wants to publically set the record straight, unveil McCain’s blatant political opportunism and in the process expose the good senator for the grumpy old curmudgeon that he really is.

What a ridiculous waste of time.

Amabassador Rice will in all likelihood be nominated for the position of Secretary of State.  There are a host of questions about Iran, Syria, Egypt, China…we could go on and on…that should be asked of the supposed nominee.  Instead McCain and his cronies will narrow their focus on Benghazi and grill the Amabassador on matters over which she has no responsibility; all with the intent of embarrassing the administration and saving face over a political scheme gone bad.            

Elections Have Consequences

“I don’t think millionaires and billionaires are going to suddenly stop working hard and making money if we raise their taxes.”

“Raising taxes is not going to harm millionaires and billionaires.”

“I will violate the pledge (to Grover Nordquist) for the good of the country.”

“It is fair to ask my party to put revenue on the table”

“During my 30 years on Wall Street, taxes on unearned income have bounced up and down with regularity, and I’ve never detected any change in the appetite for hard work and accumulating wealth on the part of myself or any of my fellow capitalists.”

You would expect to hear comments like these coming from Democrats.  But these statements were made by Republican congressional leaders.

Lawmakers return to the hill this week facing the daunting task of avoiding the proverbial “FISCAL CLIFF.” But unlike in the weeks and months prior to the election; Republicans seem to be softening their stance on tax increases. 

The president campaigned on reducing the debt through a balanced approach that includes spending cuts and increases in revenue.  The president wants to raise taxes on the wealthiest 1%.  The voters agreed.

Elections have consequences.  Based on the quotations noted above, Republicans seem get it.

Let’s hope so.  Because the “CLIFF” is very real…and the country can ill afford another four years of Washington gridlock.