President Obama put his first offer, but not his final one nor nearly his best, on the grand-bargain table. The Post reports: “President Obama will begin talks with congressional leaders Friday with a plan to raise $1.6 trillion in new tax revenue from the wealthy — making clear that, at least the outset, a wide gulf remains between congressional Republicans and the White House on the most contentious point in the negotiations.”
A senior Republican adviser on Capitol Hill reminds me that we saw this stunt before: “The President’s budget got a vote in the House and in the Senate. It received a grand total of zero votes.”
But everyone knows how the game is played. A Capitol Hill source close to House leadership brushed off the president’s opening move, writing in a terse e-mail: “All show. He has to seem like he’s fighting. … so do we.”
Those who recall the grand-bargain negotiations know that House Speaker House Rep. John Boehner (R) put a $800 billion deal on the table that did not include rate hikes. That’s the vicinity of where this deal will be made, I strongly suspect.
The danger in the president’s posturing is that his side believes he is serious and digs in on a number that House Republicans won't accept. But hopefully the president has learned something since he fumbled away the grand bargain last time. He shouldn’t be buffaloed by his own side. He should keep the negotiations all in one place (no secret deals). And he should recognize that he has more in common with Boehner (who also wants an historic deal) than with Democrats who would like another round of class warfare. (And who can blame them since it works so well in presidential election years?)
Rep. Paul Ryan (R-Wis.), back from the presidential campaign, knows where the deal is. Key Republicans are firmly playing reality politics, acknowledging revenue is needed for a deal. He told the Milwaukee Journal Sentinel today: “Yes, you can increase revenues without having to raise tax rates. Our fear is that if you raise tax rates you hurt economic growth. You hurt small businesses. So through tax reform you can get higher revenues without damaging the economy. We think that’s the better way to go.”
How much revenue can be attained from tax reform? Which base-broadeners do they look at? This remains to be seen. But in what surely must be the greatest irony of this election year, Mitt Romney’s tax plan, which the left derided as a tax cut for the rich and hopelessly vague, is now catching on with Democrats.
The New York Times reports: “The proposal by Mr. Romney, the Republican presidential nominee, was envisioned to help pay for an across-the-board income tax cut, a move ridiculed by President Obama as window dressing to a ‘sketchy deal.’ But many Democrats now see it as an important element of a potential deficit reduction agreement — and one they can claim to be bipartisan. The cap — never fully detailed by Mr. Romney — is similar to a longstanding proposal by Mr. Obama to limit income tax deductions to 28 percent, even for affluent households that pay a 35 percent rate. But a firm cap of around $35,000 would hit the affluent even harder than Mr. Obama’s proposal, which has previously gotten nowhere in Congress.”
Talk about losing the battle and winning the war.
For now the dealmakers can profit from the media’s exhaustion and distraction by the Petraeus et al. scandal. Given some room to maneuver without constant harping by the base and by reporters interested in fueling conflict and personality disputes, they just might reach an accord.