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So, it looks to me like the president is beginning to break the Republican will on taxes, which is directly due to his hardline negotiating position. Assume the GOP grants the White House a clean middle class tax extension. Most Republicans vote against it, but enough join with the Democrats to pull it over the line. What is there to negotiate over now? The president wouldn't put himself in the position of vetoing a middle class tax extension because it doesn't include a Grand Bargain. Therefore, he will most likely sign such a bill (which as I've argued is the GOP's best strategy).

So, what should the White House do after ending up in such a scenario?

One, the White House could negotiate. They'd get bogged down in negotiations that strictly focus on spending and entitlement. Such negotiations would probably center around the debt ceiling and the adminsitration wont be able to deal with the tax issue since it would have already been taken care of to their satisfaction. We've been down this road before. Democrats would probably get a bad deal from a beaten and angry Republican Party.

Second, the White House could cave on everything but Social Security. This would basically mean mostly capitulating to Republicans on Medicare, Medicaid, and spending overall. Essentially this would involve turning the President on his base to convince us to take the bad medicine after having won a tax increase on the wealthy. It will mean the inverse of what happens during these negotiations: convincing moderate Democrats to join with the Republican majority and allowing progressives vote against it.

Third, the White House could simply cut off negotiations (by stonewalling). Now, there would be a political cost to cutting off negotiations among the Washington punditry. The president would take a pounding from the media. He'd lose some points in popularity for sure. But the president would have two opportunities to reset the debate around effectively cutting off negotiations: the inaugural address and the state of the union. These would have the effect of raising the price of a clean debt ceiling vote. Essentially, this involves stabbing the Republicans in the back on promises of future tax and spending reform made to get the middle class tax cuts extended. Those Republicans who vote for it will get demolished and the president will be called a backstabber. You know how I feel....fuck em.

I like how things are playing out.

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Comment Preferences

  •  The President Is Going To Let All Tax Cuts Expire (5+ / 0-)

    "Don't Let Them Catch You With Your Eyes Closed"

    by rssrai on Thu Dec 06, 2012 at 03:38:09 PM PST

  •  Well, they have to undue to seques or Thug corps w (3+ / 0-)
    Recommended by:
    USHomeopath, a2nite, semiot

    ill go apecrap on them (defense spending) and real people will be hurt by the domestic cuts.  

    So, they're going to have to keep negotiating.

    But, the Thugs have leverage only if BO plays the debt-ceiling game, and he's already siad he's not going to do so.  And he doesn't have to: the debt ceiling is unconstitutional, as it is not new spending but paying for old spending and there is nothing in Constitution that says Congress can refuse to pay the bills due for $ already spent.  He should just ignore the debt ceiling, have Treasury issue new debt as needed and let Congress either sue him (which they will almost certainly lose) or impeach him (which will almost certainly cost Thugs the Congress in 2014).  The only real problem is 'uncertainty', but that dissapears once Treasury says it will keeps issuing Tbills and paying debts.  Hell, we didn't even have a 'debt ceiling' (or statute re: same) until 1917 and got along just fine before then.  

    Its not like Thugs will or can refuse to pass new appropriations (which debt ceiling doesn't affect at all, and which are constitutional and required to be spent as passed under the impoundment cases) and shut the government down.  That worked so well for them in 1994, right?

    Thugs think they have 'leverage'.  In reality, they. got. nothing.

    P.S.: I suspect this calculation is exactly why BO said he's "not going to play that game again" about the debt ceiling.  DOJ and the best legal minds of America been anaylzing this thing since 2011 and feel pretty sure they'll win in the courts.

    •  Well, the constitution explicitly says that only (4+ / 0-)

      Congress has the authority to borry against the credit of the United States. Pretty clear on that point. What is debatable is does Congress implicitly authorize the President to borrow by passing spending bills that didn't sufficiently match revenues.

      Either way, you've got a constitutional crisis on your hands over debt. That's a surefire way to get our bonds rated as next to crap.

      I don't think it will come to that. The GOP will extend the debt ceiling before it comes to that.

      •  The trillion-dollar coin should come before crisis (2+ / 0-)
        Recommended by:
        claude, semiot

        The president can take the debt ceiling hostage out of Republican hands by using the power of coinage given to the Treasury to mint as many trillion-dollar coins as he needs to, until Republicans figure out they don't have that hostage anymore.  Then he should insist on abolishing the debt ceiling, by having Congress declare that spending bills give consent to borrowing funds to cover the spending.

        I think Obama ought to engage in tit-for-tat negotiations with Republicans after the tax cut bill is passed.  They want to increase defense spending above the sequester?  How will they pay for it with increased revenues?  If they don't want to pay for that spending, then Democrats insist on equal spending for unemployment benefits, infrastructure stimulus spending, and anything else Republicans want.  If the CBO won't certify that spending provides sufficient economic stimulus to pay for itself, revenues need to be raised in other ways.

        Land at the bottom of the fiscal cliff, then start horsetrading with Republicans about who gets what, and what they give up in return.  However it turns out, it'll likely be better than almost any other conceivable process.

        Citizens United defeated by citizens, united.

        by Dallasdoc on Thu Dec 06, 2012 at 04:30:36 PM PST

        [ Parent ]

      •  Congress borrowed when they ordered the spending. (3+ / 0-)
        Recommended by:
        PrahaPartizan, notrouble, semiot

        They can't read or add?

        If this were new spending, it might fly.  But its not.  Its $ Congress ordered spent that the Exec could not constitutionally refuse to spend.  But now it wants to order the Exec to default on already incurred debt in violation of the 14th?

        IMO the quick one-time crises which ends with the debt ceiling in the dustbin would be far better than this death by a thousand cuts that also screws up credit rating (as it did) but does so repeatedly and without ever being resolved.

  •  IMO (1+ / 0-)
    Recommended by:

    The Rs are going to let this be just a tax deal, no spending cuts at this time. I think they want out of the game, they don't even have a pair of twos.

    "The scientific nature of the ordinary man is to go on out and do the best you can." John Prine

    by high uintas on Thu Dec 06, 2012 at 04:07:34 PM PST

  •  Trade those defense cuts for everything we (1+ / 0-)
    Recommended by:


    The Republican base will kill them slowly if defense takes a big cut.

    Economics is a social *science*. Can we base future economic decisions on math?

    by blue aardvark on Thu Dec 06, 2012 at 04:46:40 PM PST

  •  And Octavian became Augustus, who led Rome (0+ / 0-)

    To it's greatest height as an Empire, and became the template of an Emperor to the world.

    "Marco Rubio es un pañuelo Rosa!" - Montgomery Burns

    by Fordmandalay on Thu Dec 06, 2012 at 05:47:31 PM PST

  •  I prefer to wait. I want to believe in the Prez, (1+ / 0-)
    Recommended by:

    but his past behavior is riddled with cave first, then cave more  strategy. I hope he's changing.

    Send conservatives to for re-education.

    by filthyLiberalDOTcom on Thu Dec 06, 2012 at 07:31:38 PM PST

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