In 24 hours the Democrats have gotten themselves tied up in knots. Speaker of the House John Boehner (R-Ohio) managed to unhinge them by suggesting that Republicans needed a “Plan B” in case the talks with the president didn’t bear fruit.
Boehner said Republicans would seek to protect as many taxpayers as possible and would therefore have a back-up bill protecting all taxpayers making less than a $1 million from the expiration of the Bush tax cuts. (“The White House offer yesterday was essentially $1.3 trillion in new revenues for only $850 billion in net spending reductions. That’s not balanced in my opinion. So at the same time that we’re going to continue to talk with the president, we’re going to also move Plan B. I think we all know that every income tax filer in America is going to pay higher rates come January 1 unless Congress acts. So I believe it’s important that we protect as many American taxpayers as we can. Our Plan B would protect American taxpayers who make $1 million or less, and have all of their current rates extended.”)
That $1 million compromise, by the way, had already been voted on by the Democratic Senate in 2010 when it was supported by every Democrat including Sens. Harry Reid (D-Nev.) and Chuck Schumer (D-N.Y.).
In his conference Boehner told fellow Republicans, according to GOP leadership:
At the end of this week we’ll take up three measures: The first will be the Senate Democrats’ tax plan [to raise taxes on everyone making more than $250,000], to show that even now, it cannot pass the House. The second would extend all of the tax rates for Americans earning less than $1 million. The third would extend the rest of the rates for all. At the same time we’re moving on “Plan B,” we’re leaving the door wide open for something better. And I have been clear about that with the president. Plan B is Plan B for a reason. It’s a less-than-ideal outcome. I’ve always believed we can do better.
You can understand the strategy here. The GOP can vote to protect everyone from a tax increase and then vote to protect only non-millionaires. What Democrats will vote against that?
Well, Reid is now in a bind, and sounded, well, incoherent. In a statement he proclaimed, “Speaker Boehner’s ‘Plan B’ is the farthest thing from a balanced approach. It will not protect middle class families because it cannot pass both Houses of Congress.” So Democrats will now vote against this? Umm, that sounds unlikely. (Granted it is imbalanced in that it would have no cuts, but that’s for Republicans to grumble about.)
So why the change in approach? A senior House adviser explained, “It became clear yesterday that [President Obama] was never going to get where he needed to be for us to pass a bill in the House. We are going to keep working at it, but unless he gets serious on lowering the revenue number and increasing the cuts, we aren’t going to get anywhere.” Obama’s offer was described to me as requiring $1.3 trillion in new revenue and cuts of just $850 billion (this was somewhat lower than the figure released Monday night). Republicans insist that the proposal is too high on revenue and too short on spending cuts. Moreover, the president, after all of this, is still insisting on hundreds of billions in new “stimulus” spending, which is unacceptable to the House. Moreover, Obama continues to demand the debt ceiling be thrown in with this agreement.
In sum, House Republicans feel that they have made significant concessions throughout this process, even in the face of stiff criticism from their base. However, the president clings to one unbalanced proposal after another. In some sense, House Republicans are now in the cat bird seat. If they pass relief for all but millionaires I doubt Democrats in the Senate can muster enough votes to defeat it. This then leaves all the spending cuts and entitlement reforms for the debt-ceiling fight when the House Republicans have substantial leverage. Not bad, considering how these negotiations began and how badly the Republicans were defeated in the 2012 election.
Maybe if the president were less greedy in his demands the House Republicans would be under more pressure to make a deal; right now however that’s not an issue.