WASHINGTON, DC, December 28, 2012 — Making a last lackadaisical effort to avoid the “fiscal cliff” before midnight on Monday, President Obama met with Senate Minority Leader Mitch McConnell and Majority Leader Harry Reid, Speaker John Boehner, and House Minority Leader Nancy Pelosi.
The 3 p.m. Oval Office meeting was the first time the four Congressional leaders sat to discuss the fiscal cliff with Obama since mid-November. It comes at a time when the two parties, the two chambers of Congress, and the White House are trying to avoid being the first to make a concrete proposal.
House Republicans have said that the ball is in the Senate’s court, and they also argue that it’s up to the President to lead. Reid argues that the House should move to vote on a bill already passed by the Senate to keep the Bush tax cuts for everyone earning under $250,000.
Republicans respond that tax bills are constitutionally required to originate in the House, and the Senate should vote to amend any tax bill already passed by the House, completely revamping it as they see fit and then sending it back for a House vote.
The President has decided to task Reid and McConnell with leading the Senate to a deal that will pass the House with the help of Pelosi and the Democrats, if only Boehner will allow it to come to a vote.
And so the principal parties to these negotiations continue to play political games, attempting to avoid appearing responsible for any bill that will be unpopular, Obama hoping that GOP unpopularity will hold and allow him to avoid taking the blame for failure, and Republicans arguing that Obama should be more like Lincoln and take command of (hence responsibility for) the situation.
This is a battle of political ideologies, not economic principles, and it’s a battle that the American people are going to lose.
Who in the Oval Office meeting could get a deal done?
Mitch McConnell (R-KY) has been Minority Leader of the Senate since January 2007 and is the senior US Senator from Kentucky. Because of the rules of the Senate, he has enormous power to block legislation that he doesn’t like. Because he’s up for reelection in 2014 and comes from a state that could present him with a strong conservative primary challenger, he won’t like much that conservatives in the party don’t like. He’s spent the last weeks taking the temperature of his GOP Senate colleagues, but hasn’t been observed attempting to move them in any particular direction. His game is wait and see, and remind everyone that Harry Reid is responsible for whatever the Senate votes on.
McConnell is seen as an effective dealmaker, and if he is on board with any deal forged with Reid, he will probably get most Senate Republicans on board with him.
Nancy Pelosi (D-CA) is the Minority Leader of the United States House of Representatives. She served as the 60th Speaker of the House from 2007 to 2011, was a lighting rod for conservatives, and was a focal point in the successful GOP attempt to retake the House in the 2010 elections.
Pelosi’s value in the talks is questionable, due both to her intransigent stance and to the fact that the House Minority Leader is much less powerful than her Senate counterpart. A single senator has the power to snarl the workings of the Senate; a single representative has almost no power at all, power in the House coming from a majority.
Pelosi tends to draw lines in the sand, saying in a recent NPR interview that she could not be swayed on the issue of raising the Medicare eligibility age. Boehner’s failure to get his caucus to approve “Plan B” gives Pelosi some clout if Boehner concludes that he can’t get any fiscal cliff bill through the House with just Republican votes. He might try to peel away some centrist Democrats, but Pelosi keeps House Democrats on a tight leash. This is both her strength and the reason Republicans were able to make the 2010 elections partly about her.
Pelosi’s hard line against ANY spending cuts or ANY increase in the Medicare eligibility age tells the President, “This is what is important to my caucus and you will only get the support of my caucus if you do what I demand.”
The outspoken Pelosi’s real value to these talks is her ability to get in front of the cameras to praise Obama while vilifying the GOP.
Harry Reid (D-NV) is the senior Senator from Nevada, and the Senate Majority Leader since 2007. Reid has been vocal in his feeling that Boehner is more concerned about holding on to his job as House Speaker than in resolving the fiscal cliff.
Reid is the most powerful man in the Senate, but he can’t act unilaterally, and he can’t deliver senators in his caucus who don’t want to be delivered. Like Pelosi, he’s good at vilifying Republicans, but he doesn’t have the same hold on his caucus that she has on hers.
John Boehener (R-OH) is the 61st Speaker of the United States House of Representatives. He and President Obama are the two most powerful players in this game, the only ones whose opinions really matter. The failure of Plan B showed that Boehner’s power is attenuated, however.
He can decide what comes up for a vote in the House, but he can’t deliver the votes if he calls for one. He’s been accused by Democrats and Republicans alike of weak leadership. He’s no Tip O’Neill or Nancy Pelosi.
Boehner faces a President who is flanked by two of the hardest line politicians in Congress and is unable or unwilling to negotiate around them.
So what can we expect after today’s historic meeting of titans?
Why, we’ll go over the fiscal cliff. Payroll, income, capital gains and estate taxes will all rise, with some taxes rising for almost everyone. Taxes will rise via the Alternative Minimum Tax, which will effect 30 million households directly and delay filing for 100 million more.
The typical middle-class household will pay an extra $2-3,000 in taxes next year. And then, retroactively, we won’t, and we’ll all be pleased with how well our leaders have led.
We learn a few things from our readers. One offered this bit of perspective on the fiscal issues involved in the debt crisis that underpins this entire discussion. U.S. tax revenue is $2.4 trillion. The federal budget is $3.6 trillion. New debt is about $1.1 trillion, and the national debt is $16.3 trillion. The fiscal cliff is triggered by the “Super Committee’s” failure to find $1.2 trillion in budget cuts over the next decade, or $120 billion per year.
Now let’s lop eight zeros off all those numbers and pretend we’re talking about a household. It’s a lower income household earning $24,000 per year. It spent $36,000 last year, and racked up $11,500 in credit card debt. It now owes $161,700, and was told to come up with $1,200 in budget cuts for next year or face the consequences. It came up with $385.
Welcome to the America of Obama, Boehner, Reid, Pelosi and McConnell.
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