Part 1 - Fiscal Cliff Open Forum: http://loudmouthelephant.blogspot.com/2012/11/open-forum-fiscal-cliff-friday.html
Part 2 - Speaker Boehner's Offer/Proposal to the President: http://loudmouthelephant.blogspot.com/2012/12/speaker-boehners-letter-and-fiscal.html
And now Part 3 - Trying to discover what this is truly about. I pose what I think is a very real question:
"Mr. President (and, by association, democrats), would you accept a GOP-sponsored proposal IF it raised the exact same revenue as your proposal but did so by cutting loopholes, deductions, etc., and not raising tax rates?"
Can everyone see where I'm going with this? It's philosophical, sure... but it gets at the heart of this negotiation.
The first issue to discuss here is the issue of compromise. I've said this a few times: Compromise is NOT bargaining to get 100% of what you want. Team X wants A and can give B, and the Team Y wants C and can give D. It must also be understood that a "compromise" is not the attempt, nor the result to get all of the other side's object(s) of concession. A compromise is not, as a condition of the compromise, saying, "I will do some of what you want, if you do ALL of what I want." With this simple letter-based anecdote, a proper compromise means the first side gets some of A while giving up some of B, and the second side gives up some of D in order to get some of C. With the President, however, this doesn't seem to be the case. He has said that the only way for the republicans to get some of what they want, they must submit, in method and execution, to ALL of what the president wants: http://www.latimes.com/news/politics/la-pn-obama-rejects-fiscal-cliff-offer-20121204,0,3064040.story. He clearly says, “We’re going to have to see the rates on the top 2% go up. And we’re not going to be able to get a deal without it." This isn't, "we aren't going to accomplish a deficit-reduction goal without it," no, he clearly states that the deal itself depends on the GOP submitting to precisely what he wants. This is compromise? Ummm, in my opinion, it's not even close.
To outline this briefly, using the simple "letter" arrangement described in the previous paragraph, Team D is composed of the democrats. Their "A" is revenue increases, and their "B" is spending cuts. Team R is composed of republicans. Their "C" is spending cuts and their "D" is revenue increases.
Pretty simple, right?
Now with both the spending cut side and the revenue increases side, there's more than one way to accomplish these things. With a real compromise, Team D would get some revenue increases and would give up some spending cuts, and Team R would get some spending cuts and would give up some revenue increases. Yes... that's a compromise. But again, that's not how President Obama, as seen in the aforementioned statement, thinks it should work. He wants Team R to give him ALL their item D. They must submit to agreeing to the President's method, amount, and execution of revenue increases. This is not, by any stretch, a compromise by the president Conversely, the willingness of the GOP to consider some form of revenue increase shows they're game for an actual compromise. Granted, the democrats have hinted at being open to spending cuts, but that's only one fourth of the deal. Again, this isn't about, "I'll give you some of what you want if you give me ALL of what I want." By holding the position the President is holding, it's clear this is the "deal" he is playing with.
That being established, we're now back to my original question: "Mr. President (and, by association, democrats), would you accept a GOP-sponsored proposal if it raised the exact same revenue as your proposal but did so by cutting loopholes, deductions, etc., and not raising tax rates?"
Why is this significant? Well first, as me and many economists, democrat and republican alike have shown, raising taxes via the President's desired means (increasing tax rates on the wealthy) does virtually nothing to decrease the deficit. This is a side note, and it doesn't play into the actual compromise issue, but it is something that must be taken into account on a matter of pragmatism. Regardless, the president holds to this, in spite of its lack of efficacy in accomplishing its deficit reduction goal. In total, the President is pushing for $180 billion in revenue increases per year for the next 10 years. This is a simple "drop in the bucket" with respect to our yearly federal deficit. But through this negotiation process, he certainly holds on to the need to raise revenue in the way that he does.
But why? Is there an ideological wall here? As my question asks: if it truly was about the revenue, and the GOP plan accomplishes this WITHOUT raising tax rates, why still push for a tax rate hike?
Hmmm. Think about it. It's quite simple:
- The President wants more revenue.
- The President wants this to be accomplished via tax rate increases (the means should be relatively irrelevant if the revenue goal is met, especially since the GOP is increasing revenues without touching the middle class - something the President does want).
- The GOP does not want revenue increases.
- In an act of compromising, the GOP has said they will consider a plan that generates more revenue.
Ding ding ding! The president will get what he wants. More revenue! Isn't that what he says we need? So why isn't he happy? Why is he holding on to it being done with a tax RATE increase? Is he calling the GOP liars? But why would they lie? Why would they submit a proposal that doesn't effectively raise the revenue they claim it will? The President has said that he doesn't think the GOP plan goes "far enough" in raising revenue, but that's not the point here. If the GOP did have that plan, one that matches the revenues of Obama's tax rate increase plan (which the GOP says it can), would the President accept it? Again, this is philosophical/rhetorical, but it's quite relevant. This really isn't a matter, however, of "my plan is more 'real' than your plan." Anyone who thinks it is is mistaken. Each side can only take the other side at their word. If the republicans say their plan has enough revenue in it, or if the President's plan has enough in spending cuts, the opposing side must go along with those notions. So, assuming the GOP plan does raise the same revenue as a tax rate increase plan, why not go along with it? Why still hold out for an increase in tax rates? Why not... compromise?!
Will someone please answer this? :-)
I believe it's part of an ideological plan or protocol. To me, it's clear. If he got the revenue increase he asked, regardless of how the GOP does it, and especially because it does not affect the middle class, the President's rejection of this plan and the adherence to an increasingly-progressive tax-the-rich one shows where the President truly falls on the ideological spectrum. If he rejects the GOP plan, though it accomplishes the same goal as his plan does, then he is, in a sense, promoting class warfare. I don't see how this could be looked at any other way.
I am personally upset at the GOP for even considering revenue increases as part of a Fiscal Cliff avoidance plan, but in the spirit of compromise, a true one where neither team gets all, and neither team gives up all, I do appreciate their willingness to at least "meet somewhere in the middle." But what is president Obama's motive? If the revenue side is met, why push on the means? Wouldn't a compromise on his end be getting what he wants with respect to revenues, but not necessarily getting it ALL or getting it 100% in way the way he wants? Just as the GOP wants large spending cuts, they shouldn't get ALL that they want in the way they want it (yes, republicans, you do have to examine defense spending... I'm talking to you).
Does anyone else notice this? Am I wrong? Please share your thoughts below (or, of course, respond in any of the previous Fiscal Cliff posts).