Skillful negotiating can begin with taking an utterly unrealistic opening stand and making it seem like you’re not. In advance of this year’s approaching budget battles, Mitch McConnell tried that strategy on Sunday.
“The tax issue is finished, over, completed,” the Senate minority leader said on ABC’s “This Week.” President Obama got his rate hike in last week’s “fiscal cliff” deal. Spending cuts must be the agenda from here. McConnell offered variations on this theme last week, but it was not clear then if he was just ruling out increasing nominal tax rates further, perhaps leaving room for raising more federal revenue through eliminating certain deductions and inefficiencies in the tax code. So George Stephanopoulos pressed McConnell. “You will not accept any new revenues in any new deal?” the host asked. “Yeah, absolutely,” McConnell replied.
“Now that we have resolved the revenue issue,” McConnell also said on Sunday’s “Face the Nation,” “tax reform ought to be revenue-neutral.”
Except “the revenue issue” is far from resolved. The fiscal cliff deal struck last week will raise a mere $620 billion over 10 years. That’s less than the federal deficit projected for any single year over the next decade. It’s also about $2 trillion less revenue than the bipartisan Bowles-Simpson commission proposed in its deficit-closing plan. To be sure, Congress must curb projected growth in entitlement spending. McConnell has every reason to insist that be on the table in any grand budget negotiation. But ruling out any additional revenue from here on would result in a budget reckoning that is either much too small or very unbalanced in favor of spending cuts.
Obama’s post-fiscal cliff rhetoric has been closer to reality. “I agree with Democrats and Republicans that the aging population and the rising cost of health care makes Medicare the biggest contributor to our deficit,” he said last week. But, he added, lawmakers must balance Medicare restructuring with more revenue from “further reforms to our tax code.” Yet the president has talked a good game before, and though he put some non-trivial Medicare cuts on the table in the abortive grand bargain of 2011, his words have not so far translated into serious renovation of entitlements.
The question over the next few months is whether McConnell and his party will back away from his rhetoric, and whether in that process Obama will live up to his own words.