Ideally, Dems Would Know How To Negotiate

Obama's Former Budget Director:

In the face of the dueling deficits, the best approach is a compromise: extend the tax cuts for two years and then end them altogether. Ideally only the middle-class tax cuts would be continued for now. Getting a deal in Congress, though, may require keeping the high-income tax cuts, too. And that would still be worth it.

(Emphasis supplied.) It should not require giving the wealthy and corporations a tax cut in order to give the middle class a tax cut. Only the political incompetence of Democrats and their bureaucrats would make this so. It is at the heart of the political and policy failure of the Obama Administration and the Democratic Congress on the economy. Peter Orzag's first column for The New York Times illustrates why the Dems are poised to receive a crushing defeat in November. There are other flaws in Orzag's analysis:

The beauty of extending the tax cuts for only two years is that canceling them doesn’t require an affirmative vote. It happens by default, so Congressional deadlock works in its favor. And it would essentially solve our medium-term deficit problem, reducing the deficit by $200 billion to $350 billion a year from 2015 to 2020. [. . . A] key part of this deal is actually ending the tax cuts in 2013 — and that will surely require a presidential veto on any bills to extend them after that. (Failing to follow through would be particularly problematic if the high-income tax cuts are made permanent — at a 10-year cost of more than $700 billion.) Minimizing this risk requires as much upfront clarity and commitment as possible, including a strong and unambiguous veto threat from the president.

Any tax cuts extended now will NOT be cut in 2013. Only a fool or a knave could think otherwise. As Orzag notes, the beauty of the negotiating position today for Democrats and the President is that no affirmative vote is required to end the Bush tax cuts, which were designed to expire next year.Now is the time of maximum negotiating power for Democrats and the President. Now is the time to make the deal you want to make. Deferring the negotiation to 2013, which is what a "2 year extension" would do, is simply idiotic.

Yet this idiocy is emblematic of the failure of political bargaining by the White House and the Dems the past 20 months.Orzag's first column is incredibly revealing and illustrative. It explains much of what went wrong the past 20 months.

Speaking for me only

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    It can't be stupidity (5.00 / 1) (#1)
    by PatHat on Tue Sep 07, 2010 at 07:35:14 AM EST
    The Administration and the Democrats in Congress must WANT this. They truly can't be that bad at politics, can they?

    I'm with you (5.00 / 1) (#4)
    by Militarytracy on Tue Sep 07, 2010 at 07:48:19 AM EST
    this has got to be all smoke and mirrors to attempt to hide what they really want.  Nobody who is part of the Obama team could be this weak and this stupid.

    Anything meaningful (5.00 / 2) (#2)
    by Militarytracy on Tue Sep 07, 2010 at 07:46:47 AM EST
    that wasn't stripped from HCR was deferred until 2014.  The few items we did get are already being successfully circumvented by insurance companies and now they are going to bring this argument to the table about "the beauty" in this B.S.?  Could they be any weaker or any more detached from reality?  And the rich aren't going to have their giant tax cuts expire but they will likely "tweak" Social Security as soon as the midterms are over.  Are they intentionally trying to implode the Democratic party in much the same way that Bush did Republicans?

    There is definitely a difference (none / 0) (#5)
    by MO Blue on Tue Sep 07, 2010 at 08:01:52 AM EST
    Are they intentionally trying to implode the Democratic party in much the same way that Bush did Republicans?

    There will not be a nice Obama-like Republican politicians to rehabilitate the Dems in less than two years.  


    Telling both parties (5.00 / 3) (#3)
    by the capstan on Tue Sep 07, 2010 at 07:48:07 AM EST
    to 'go jump' in 2010: roaming thru morning news reports I found this from South Carolina: a teacher is going to run as a write-in candidate for senator, giving voters a chance to protest against both parties.  As he said, the republican candidate is destined to win since the oddity A. Greene won the democratic primary.  People who object to current 'uncivil' political discourse (or lousy governance) can register opposition by voting for him.  I like the idea--wish it would spread.

    Scary (5.00 / 5) (#8)
    by lilburro on Tue Sep 07, 2010 at 09:10:10 AM EST
    Why does this combination make sense? The answer is that over the medium term, the tax cuts are simply not affordable. Yet no one wants to make an already stagnating jobs market worse over the next year or two, which is exactly what would happen if the cuts expire as planned.

    Really?  You know what would've helped the jobs market, a bigger stimulus.  A dedicated jobs bill.  All this stuff still could.  But instead we get this BS about not letting the Bush tax cuts expire.  What a complete waste of the fruits of the 2008 elections.

    I guess Extend and Pretend is a (5.00 / 3) (#18)
    by Anne on Tue Sep 07, 2010 at 11:36:36 AM EST
     pretty good description of a lot of Obama-era policy; we've seen it with HAMP - a terrible, terrible program that is pushing more and more people over the edge rather than pulling them back from the brink.  We're seeing it with Gitmo and detainees and warrantless surveillance and state secrets: extend the Bush policies and pretend we're doing something better.  Afghanistan: extend our involvement and commitment and pretend it's going to work this time because everyone knows that only Obama can solve the pressing problems of our time.  We're seeing it on health care: extend insurance to all and pretend that's the answer to the problems of cost and access.  

    And here we are with the Bush tax cuts: extend them and pretend (1) that they are going to help the economy go into turbo mode and (2) that they can make the cuts magically go away later.  Suuuure.  

    Extend and pretend: what a legacy, huh?

    I fear the kinds of conversations that are taking place in DC these days, especially the kind that involve keeping existing tax cuts while at the same time preparing to cut Social Security and other safety-net program benefits.

    Put a few extra dollars in my pocket and it's going into the bank or under the mattress; it's not going to go retail, we aren't going to take a cool vacation or splurge on a bigger TV for football season.  We are going to store it like squirrels store nuts for the winter, because we don't have any trust or confidence that these savvy advisors give a flying fig about us.  

    Employers are not going to hire until their pared-down staffs cannot handle the demand for goods and services; those of us who still have jobs are not going to complain about being overworked and underpaid because we are too grateful to have jobs and there are too many who would be happy to do what we do for less, just to have a paycheck again.  

    No amount of roof-raising, fist-pumping speeches about how much Obama has done and how well it's worked is going to get people to believe something other than what their bank accounts and job situations are telling them.

    Sure, extend the Bush tax cuts to the wealthy - that will play so nicely against the double gut-punch of Wall Street bonuses and Cat Food Commission recommendations just in time for the hap-hap-happy holiday season.

    Since I don't believe it's possible to be this dumb, the only conclusion I can reach is that this is the plan.

    Hear hear (none / 0) (#22)
    by PatHat on Tue Sep 07, 2010 at 12:18:23 PM EST
    Eventually the "us" vs "them" won't be conservative vs. liberal, it will truly be the "haves" vs the "have nots", and that's when it can get violent.

    What a negotiating position. (5.00 / 1) (#21)
    by KeysDan on Tue Sep 07, 2010 at 12:17:09 PM EST
    Out of the gate, a nice compromise:  we will renew All of the Bush tax cuts, including the Warren Buffet-types, for two years,  in exchange for letting All of the Bush tax cuts, including the Carl the Carpenter-types, end for good in 2013.  This scheme depends on a presidential veto, if, perchance, the Bush tax cuts are, once again, renewed.

     All of this in the face of a probable Republican Congress and maybe a Republican president.  Or, President Obama will veto this bill to end tax cuts for most Americans standing up to those big, bad old Republicans.  Of course, it is a thinly veiled cave or desired outcome (I go with the latter) for keeping All of the Bush tax cuts. And why not, when we have the Catfood Commission hard at work in the fertile  area of non-defense, discretionary spending.

    And the record with Obama et al starting from a (none / 0) (#27)
    by jawbone on Tue Sep 07, 2010 at 10:13:09 PM EST
    compromise is yet further compromise to the right.

    I'm sick of these people. Can't Obama just resign to spend more time with his family? Hasn't he done enough damage?

    Biden would be more of a Democratic than this DINO.

    (I'm not in a good mood. It's been hard to be in a good mood with this crew in the WH. Bush was bad, really bad, but he wasn't my party's bad. Obama is all on us, even if we didn't vote for him.)


    Dems do know how to negotiate (5.00 / 3) (#25)
    by Romberry on Tue Sep 07, 2010 at 07:00:33 PM EST
    Implying the Dems don't know how to negotiate is excusing Dems as incompetent. They aren't. Dems know what they want (regardless of what they say they want) and negotiate so that they get their desired outcome. It was the same with the health care bill. If you open negotiations by offering up what you tell people is your last ditch compromise position, then anyone with a clue knows that even your "last ditch compromise" isn't really what you want...even if you say you do. What you want is less.

    Dems aren't incompetent. They are getting what they want. I wish more people would wake up to that fact. Many have, but many are not quite there yet. Sadly, some will never be there. O-bam-ah! O-bam-ah!

    It's impossible to negotiate with nihilists. (none / 0) (#6)
    by steviez314 on Tue Sep 07, 2010 at 08:23:38 AM EST
    If no tax cuts get extended, which is the default position, who do you think will get the blame?  Republicans?  No way.  Instead, it will have been Obama who broke his promise to not raise taxes on the middle class.

    The Republicans don't care about tax cuts, even for some--they care just about destroying government (even when they are in power).

    And the American people are stupid enough to agree with them.  Look at Krugman's Sunday column--in 1938, 63% of Americans preferred lower gov't spending--IN 1938!!!  After FDR saved them.

    The more things change....

    Yes (5.00 / 3) (#9)
    by cawaltz on Tue Sep 07, 2010 at 09:51:56 AM EST
    I believe Republicans would get the blame if they voted no on middle class tax cuts that excluded the rich.

    69% wants the Bush tax cuts for the wealthy to expire.

    If the Democrats were smart they'd play the tax cut card and use it heading into an election largely based on the economy. They aren't though. Instead they'll likely give in to the minority party on an unpopular idea and then tell Joe Sixpack that they can't afford to pay his SS IOU to fix the deficit. Oy freakin' vay.


    I think Dems (5.00 / 2) (#10)
    by Warren Terrer on Tue Sep 07, 2010 at 10:36:34 AM EST
    want to extend the tax cuts and are perfectly happy to do so. It will help them get more big money donations and I think many of them believe it will be somewhat stimulative.

    Their belief is that, because the GOP wants to extend the tax cuts too, they can use this is a carrot to get concessions from the GOP on other issues that will be so awesome that the Dem base will overlook the extension of the tax cuts. DailyKos will be filled with diaries telling us that it was a necessary and useful concession and if you think otherwise you are a purity troll who wants a pony.

    But in their usual fashion, the Dems will concede far too much in return for the extension, believing that the GOP is desperate for their richman's tax cut, when in fact it will become obvious that it's the Dems who are desperate for anything they can call a victory and will give away the farm in exchange for it.


    It's funny because it's true (5.00 / 2) (#14)
    by ruffian on Tue Sep 07, 2010 at 10:53:11 AM EST

    Their belief is that, because the GOP wants to extend the tax cuts too, they can use this is a carrot to get concessions from the GOP on other issues that will be so awesome that the Dem base will overlook the extension of the tax cuts. DailyKos will be filled with diaries telling us that it was a necessary and useful concession and if you think otherwise you are a purity troll who wants a pony.

    They really do beleive that. Morons.I can just see the 'The beauty of it is....' commentary now.


    Stop it now (5.00 / 1) (#16)
    by cawaltz on Tue Sep 07, 2010 at 11:23:36 AM EST
    You're not being "pragmatic" and the Very Serious People demand pragmatism and conceding.

    We'd still be Brits if these people had been in charge of the American Revolution. There isn't an ideal they haven't met worth ceding up to and including freedom.



    Probably (none / 0) (#13)
    by cawaltz on Tue Sep 07, 2010 at 10:45:36 AM EST
    Both parties appear to have the same agenda and playbook.

    I'm hoping we hit the tipping point before our government implodes and people stop buying into the Democrat- Republican kabuki and demand real solutions from the people we are paying six figures to in order to problem solve on our behalf.


    Gibbs states (none / 0) (#23)
    by Warren Terrer on Tue Sep 07, 2010 at 12:47:01 PM EST
    that Obama disagrees with Orszag and Obama doesn't support upper class tax cuts.

    Unfortunately, when you read the article closely, it's not all that reassuring. For instance, "Gibbs insisted that economists don't think the best way to help the economy recover is by keeping the tax cuts for the rich." So it's still seen as a way that could help the economy recover, just not the best way. Everything is always on the table with Democrats.


    That's an untested thesis (none / 0) (#7)
    by Big Tent Democrat on Tue Sep 07, 2010 at 08:25:53 AM EST
    BTD - (none / 0) (#11)
    by lilburro on Tue Sep 07, 2010 at 10:37:59 AM EST
    what do you think the chances are that the Bush tax cuts will expire now?  What the Obama Administration actually intends to do is unclear to me, because they aren't actively fighting for their new tax plan.

    Obama opposes extending tax cuts (5.00 / 2) (#26)
    by caseyOR on Tue Sep 07, 2010 at 07:51:01 PM EST
    for the rich, and he's going to tell us all about it tomorrow. At least that's what a NY Times article is now reporting.

    According to the Times story, Obama will not agree to any compromise that extends those cuts, not even the fake "only two years" extension.

    Well, maybe he this time he really means it. It is tempting, though, to place bets on just how long it takes before Gibbs starts explaining WORM, and a grand compromise appears.

    Prove me wrong. Please.


    They will be extended (none / 0) (#12)
    by Big Tent Democrat on Tue Sep 07, 2010 at 10:40:22 AM EST
    in the next Congress.

    I ask because (none / 0) (#17)
    by lilburro on Tue Sep 07, 2010 at 11:33:50 AM EST
    you believed that the "deficit concern" strategy was a strategy to end the Bush tax cuts.  And if they're not getting ended either the strategy didn't work or that wasn't the goal.  Or the Obama Administration is just incompetent.  

    And it's odd that Orzsag seems to assume Obama will be president in 2013.


    The "deficit concern" strategy (5.00 / 1) (#19)
    by MO Blue on Tue Sep 07, 2010 at 12:01:28 PM EST
    is a strategy to justify defaulting on the government's obligation on SS etc.

    While Orszag is recommending extending Bush's tax cuts, here in the same column:

    How much savings is plausible on the spending side? Medicare, Medicaid and Social Security will account for almost half of spending by 2015. Even if we reform Social Security, which we should, any plausible plan would phase in benefit changes to avoid harming current beneficiaries -- and so would generate little savings over the next five years. The health reform act included substantial savings in Medicare and Medicaid, so there aren't further big reductions available there in our time frame. link

    no, it wouldn't be. (none / 0) (#15)
    by cpinva on Tue Sep 07, 2010 at 11:08:02 AM EST
    And that would still be worth it.

    what would be nice is if the dems, starting with pres. obama, showed some spine, and let the top two tier marginal rate cuts expire, as planned. seems to me this would show they're "serious" about that horrible old budget deficit.

    it would also put the republicans in the uneviable position (unless they just truly don't care) of defending tax cuts for the wealthy, in public.

    The GOP (none / 0) (#20)
    by PatHat on Tue Sep 07, 2010 at 12:15:40 PM EST
    would unabashedly defend tax cuts for the rich. It is not an unenviable position for them and their supporters. The disconnect between the various GOP is huge, but apparently not a problem with their supporters.

    The thing is the tax cuts for the (none / 0) (#24)
    by masslib on Tue Sep 07, 2010 at 01:17:29 PM EST
    "middle-class" already benefit the wealthy.  Indeed, in dollar terms they fair better under them than the middle-class.

    I would much rather have all the tax cuts expire (none / 0) (#28)
    by jawbone on Tue Sep 07, 2010 at 10:14:49 PM EST
    than to have Obama et al mess up even more. Or give even more to the Uberwealthy Overlords.

    And then there will be Republicans controlling Congress.

    What a FUBAR.