December 5, 2012

Chip Somodevilla, Getty Images

So here’s the latest on the fiscal cliff talks: Republicans have edged closer to yielding on middle class taxes — but they may now swing the gun in the direction of a new hostage, i.e., the debt ceiling.

 The New York Times reports that Republican leaders, running low on options, may buckle and agree to extend just the middle class tax cuts. Then, in January, they will resume the fight to get the deep entitlement cuts they want by refusing to raise the debt ceiling again:

Republican leaders could take up legislation already passed by the Senate to extend tax cuts on income under $250,000, attach a deferral or cancellation of the automatic spending cuts, and give Mr. Obama nothing else, denying requests for increased infrastructure spending, help for homeowners to refinance their mortgages, and extensions of the payroll tax cut and unemployment insurance.

Then Republicans would demand deep concessions on spending and changes to Medicare and Social Security as a price to raise the debt ceiling a few weeks later. Republicans say any such decision to follow that course is still a ways off.

In this scenario, Republicans are simply exchanging one mode of extortion for another one. If that sounds harsh, remember that Mitch McConnell has explicitly confirmed that Republicans view the prospect of future debt ceiling battles in precisely these terms — as a perennial way to force ever more spending cuts. After the 2011 debt limit battle, McConnell said that Republicans had learned that it is a “hostage that’s worth ransoming,” because it “focuses the Congress” on cutting spending.

So here’s a prediction: If this happens, Obama will refuse to negotiate over the debt limit, just as he’s refusing to negotiate over tax rates on the rich. The message will be clear: We’re not talking, if the debt ceiling — and the nation’s economy — have a gun pointed at their head.

Now, it’s true that if the middle class tax cuts are extended, Democrats lose a key piece of their leverage, and the remaining things Dems will want — an extension of the payroll tax cut and unemployment insurance, and a rise in the debt limit — will give Republicans a basis for renewing the push for deep entitlement cuts. But there is reason to believe that this time, Obama and Democrats will tell Republicans that they won’t brook the debt ceiling having any part in the talks.

The argument is straightforward: This isn’t 2011 anymore. Last time, Republicans had won an election; this time, Obama and Democrats won. Polls show the public increasingly sees Republicans as the intransigent party and the primary obstacle to compromise in Washington. The economy is on the mend; by threatening another drawn out debt limit battle, Republicans are recklessly putting the recovery at risk. The GOP’s brand is in tatters, and the party will ultimately cave on this point rather than risk more public blame for threatening to tank the economy again. Powerful GOP-aligned interests in the business community, including the Chamber of Commerce, won’t tolerate another debt ceiling fight. Having perennial fights over whether the country will pay its bills is no way to govern, and it simply must stop. The only way to put an end to this madness is to refuse to negotiate if the GOP insists on trying it again. Therefore, no discussions over the debt ceiling. Period.

This may sound like an optimistic prediction, but this is exactly what’s happening over whether to raise tax rates on the rich: Dems are refusing to negotiate. If Republicans seriously attempt a rerun of the 2011 debt ceiling playbook, my bet is this is how things will unfold.

 * Why GOP will buckle on tax rates for rich: Doyle McManus of the Los Angeles Times has a very good overview of the situation: Republicans know that going over the cliff won’t be that damaging in the short term; they know Obama is prepared to go over it without a deal to raise tax rates on the rich; and they know they’ll have to yield sooner or later. It’s good to see more news outlets getting it right on the basic dynamic here.

 * Obama enlisting business leaders on debt ceiling: Today President will ask the Business Roundtable for help in pressuring Congress for a quick resolution to the looming debt ceiling standoff. As Jonathan Bernstein noted here yesterday, this gets at a bigger choice the GOP needs to make between its fundamentalist Tea Party wing and its pragmatic business stakeholders, one that has far reaching ramifications for the party’s future.

Also: Obama will ask corporate executives for their support in his quest to eliminate the debt ceiling entirely, as part of the fiscal cliff deal.

* Conservatives won’t let GOP leaders compromise: Some right-wing lawmakers continue to insist that even John Boehner’s proposal to raise revenue only via closing loopholes constitutes a tax-hiking sell-out. But as Steve Benen has noted, this looks like a pantomime designed to make it easier for GOP leaders to pretend their offer — which gives Republicans the tax rates and the entitlement reform they want — represents some kind of middle ground.

* Public wants filibuster reform: A new National Journal poll finds that Americans want an end to supermajority rule in the Senate by 49-42. What this underscores, again, is the modesty of the reforms Dems are pursuing. After all, they wouldn’t change the underlying ability of the minority to thwart the will of a simple majority in the Upper Chamber.

* Public wants Medicare left untouched: Another key finding from the National Journal poll, this one on Medicare:

A full 79 percent of those surveyed want the fiscal-cliff negotiators not to cut the program at all. Only 17 percent would be willing to see it cut some, and a minuscule 3 percent would be OK with it being cut a lot.

However, it does look increasingly like Dems are prepared to agree to Medicare benefits cuts in some form as part of any final fiscal cliff deal.

* Plurality favors same sex marriage: A new Quinnipiac poll finds that American voters favor same sex marriage by 48-46, a dramatic swing since July of 2008, when voters opposed it by 55-36. The clear swing in public opinion, combined with Obama’s public evolving on the issue and the legalization of it by popular vote in several more states, clearly suggest that a major civil rights sea change is under way.

* The latest legal crusade to repeal Obamacare: Jonathan Cohn brings us up to speed on still another crusade to repeal Obamacare in the name of states’ rights. This one is problematic because it is emboldening some state officials to refuse to implement the law — stalling or blocking implementation being the current route for the Obamacare dead-enders to accomplish what they failed to do via Congress, the courts, and the 2012 election.

* And no, the message of “Lincoln” was not to compromise: Historian Kate Masur nails it: “The compromises that Lincoln did not make are more significant than the ones he did.” After the 1860 election, Lincoln refused to compromise on the expansion of slavery, and after the 1864 election, he refused to compromise on dropping emancipation in exchange for peace.

What else?

 

Greg Sargent writes The Plum Line blog, a reported opinion blog with a liberal slant -- what you might call “opinionated reporting” from the left.