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ThePlumLIneGS whorunsgov plumline
Posted at 04:32 PM ET, 10/26/2011

Newsflash: If GOP won’t accept tax increases, there won’t be any `grand bargain’

A quick update on the Joint Select (Super) Committee: Its work marches on, with reports today that the Democrats have made a new offer for larger deficit reductions than the deficit deal required, but without increases in the Medicare age eligibility that liberals oppose. Republicans are rejecting this overture as a stunt designed to position Dems for the political battle that will come if the supercommittee fails.

Here’s what you need to know about this: There’s no reason at all to expect any deal in the end, because nothing has really changed. As long as Republicans refuse to consider any tax increases, there’s just not going to be a grand bargain.

And there’s no reason at all to expect Republicans to agree to tax increases; even if the committee did, their bill would be dead on arrival in the House. As near as I can tell, the Democrats would be willing to negotiate a deal if one were available, and even give up some liberal priorities in order to win other things, but Republicans just aren’t interested: there’s nothing they care about that they would be willing to sacrifice lower taxes on the wealthy for. Sure, some Republicans really oppose defense cuts, and if there’s no deal it’s possible that down the line the trigger will actually take effect and those cuts will happen, but they would prefer even that to having to vote for tax increases. And clearly none of them considers the federal budget deficit to be anywhere near as important to keeping high-end taxes low.

So what we’re seeing with today’s developments isn’t about bargaining, it’s about the spin both parties hope to take away from the deadlock. And for the Democrats that is once again a main course of reasonableness (they’re willing to cut a deal if only Republicans were willing) along with healthy side dishes of increased taxes on rich folks and new job creation measures. In other words, the items Barack Obama has been talking about that have been polling well for the last several weeks.

But as far as cutting a deal, we’ve seen that Republicans have some leverage when they have a sufficiently large and immediate hostage, but not otherwise. They don’t have any hostage on the Joint Select Committee, where neither side is particularly worried about cuts, since they won’t be triggered until after the election. The lack of a hostage means Dems don’t need to cave on tax hikes. The real action will occur when appropriations run out and the threat of a government shutdown returns. That’s the point at which we’ll probably get some real bargaining, and we’ll see whether Obama is going to be willing to risk a shutdown over Tea Party demands. But as long as Republicans refuse to entertain the idea of the wealthy paying a bit more in taxes, the supercommittee will just fizzle.

By  |  04:32 PM ET, 10/26/2011

 
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