HomeLatest ThreadsGreatest ThreadsForums & GroupsMy SubscriptionsMy Posts
DU Home » Latest Threads » Forums & Groups » Main » General Discussion (Forum) » Obama’s “small deal” coul...
Introducing Discussionist: A new forum by the creators of DU

Sun Dec 23, 2012, 11:39 AM

Obama’s “small deal” could lead to bigger tax increases

Obama’s “small deal” could lead to bigger tax increases

Posted by Ezra Klein

<...>

But the most important insight into the White House’s strategic thinking comes when Boehner says to the president, ”I put $800 billion (in tax revenue) on the table. What do I get for that?” Obama’s response is cold and telling. ”You get nothing,” the president said. “I get that for free.”

That, right there, is the central fact of negotiations for the Democrats and the central problem for the Republicans....The White House already has some $700 billion in the bank, as they see it. The reason to negotiate with Boehner is that an agreement with him could, in theory, push that number well above $1 trillion while stabilizing the debt and avoiding the economic pain of falling off the fiscal cliff. But there’s no reason to cut a deal with Boehner in which the White House gives up spending cuts in order to get a tax increase they can have anyway.

<...>

The talk in Washington now is about a “small deal.” That would likely include the Senate tax bill, some policy to turn off at least the defense side of the sequester and a handful of other policies to blunt or delay various parts of the fiscal cliff...Some time in the next month or so, the small deal would pass and the White House would pocket that $700-plus billion in tax revenue...But pressure would quickly mount to strike a larger deal, both because there would be another fiscal cliff coming and because the debt ceiling would need to be raised...The White House would insist that the next deal includes a 1:1 ratio of tax increases — all of which could come through Republican-friendly tax reform — to spending cuts. So a subsequent deal that included $600 billion or $700 billion in spending cuts would also include $600 billion or $700 billion in tax increases, leading to total new revenue in the range of $1.2 trillion to $1.4 trillion.

<...>

All of which is to say, if Boehner had taken the White House’s deal in 2011, he could’ve stopped the tax increase at $800 billion. If he took their most recent deal, he could stop it at $1.2 trillion. But if he insists on adding another round to the negotiations — one that will likely come after the White House pockets $700 billion in tax increases — then any deal in which gets the entitlement cuts he wants is going to mean a deal in which he accepts even more tax increases than the White House is currently demanding.

Today, Boehner wishes he’d taken the deal the president offered him in 2011. A year from now, he might wish he’d taken the deal the president offered him in 2012.

http://www.washingtonpost.com/blogs/wonkblog/wp/2012/12/22/obamas-small-deal-could-lead-to-bigger-tax-increases/

And Boehner would own them.



No one knows President Obama's negotiating style.
http://www.democraticunderground.com/10022058579

4 replies, 781 views

Reply to this thread

Back to top Alert abuse

Always highlight: 10 newest replies | Replies posted after I mark a forum
Replies to this discussion thread
Arrow 4 replies Author Time Post
Reply Obama’s “small deal” could lead to bigger tax increases (Original post)
ProSense Dec 2012 OP
ProSense Dec 2012 #1
ProSense Dec 2012 #2
Luminous Animal Dec 2012 #3
ProSense Dec 2012 #4

Response to ProSense (Original post)

Sun Dec 23, 2012, 11:52 AM

1. No comment? n/t

Reply to this post

Back to top Alert abuse Link here Permalink


Response to ProSense (Original post)

Sun Dec 23, 2012, 02:14 PM

2. Kick because

evidently, Boehner being on the losing end isn't popular.

Reply to this post

Back to top Alert abuse Link here Permalink


Response to ProSense (Original post)

Sun Dec 23, 2012, 03:12 PM

3. ".But pressure would quickly mount to strike a larger deal, both because there would be another

fiscal cliff coming."

I want to know the Dems negotiating starting point for this inevitable larger deal. And I don't want to hear about it through fucking leaks. We The People deserve to know from the get go what cuts to social service our Democratic representatives willing to put on the table.

Reply to this post

Back to top Alert abuse Link here Permalink


Response to Luminous Animal (Reply #3)

Sun Dec 23, 2012, 03:27 PM

4. "I want to know the Dems negotiating starting point for this inevitable larger deal."

It starts after $800 billion more in tax increases have been booked.

As Klein notes, it's going to be 1:1, and that puts Boehner in a bad place.

You're not going to know it until they reach the point of actually starting the process. No one knows when that will be yet.

Reply to this post

Back to top Alert abuse Link here Permalink

Reply to this thread