The President’s newfound “hardball” stance, where he led with a strongly lefty opening offer and waited for House Republicans to counter (also known as “negotiation”) continues to flummox John Boehner. He’s finally released an offer, and it’s at least pointed at the issue, sort of, but it’s still fundamentally backwards:
Boehner now says he would agree to raise the debt ceiling for one year and to establish a higher marginal income tax rate on people earning over $1 million if Obama will agree to serious cuts in domestic “entitlement” spending.
This is a fairly conservative proposal, essentially where the House GOP has been since before the election, but that need not be a problem. If this were a just an opening bid, the two sides could work towards the middle from there, like haggling is supposed to work.
But there are two big problems here. First is Boehner trying to sneak through some concessions for raising the debt limit (which has nothing to do with the fiscal cliff); the president has been firm in refusing to negotiate over that, as is probably wise. About the only negotiation worth having over the debt ceiling would be to abolish it altogether—that would be worth something, but Boehner isn’t suggesting it. The second is that, for the umpteenth time, there are no specifics about which social insurance cuts the Republicans want. One suspects that House Republicans just want the Dems to propose social insurance cuts so the GOP can blame them for it during the midterms, as happened in 2010.
David Dayen makes a good related point:
This also puts the lie to the idea that you could create a “grand bargain” that will finally put these budget issues to rest. Boehner’s deal, if it went into motion, would reduce the deficit by $2 trillion. That’s on top of $1.5 trillion from the debt limit deal last year. Add in savings from ending the wars in Iraq and Afghanistan, and you’re at $4.5 trillion in deficit reduction, past the targets set by most bipartisan commissions on this point. And Boehner’s only assurance on this score is that he would not hold the government hostage for more spending cuts until late 2013. No negotiation will end these fights, as long as Republicans can find a political advantage in continuing to press them.
Overall, at this point the president would still be well advised to negotiate after January 1st, when the landscape will be more favorable.