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Thursday, December 6, 2012

Mr. Obama: What are These Fiscal Cliff Negotiations Really About?

Call this an open letter, a fair question, or a continuation of this blog's debate on the Fiscal Cliff:

Part 1 - Fiscal Cliff Open Forum:

Part 2 - Speaker Boehner's Offer/Proposal to the President:

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:,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).

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  1. Your position is very clear and well-stated. I agree with it wholeheartedly.

  2. I posted this earlier in the week ~
    Communist Party USA Pushing Obamanomics and Tax Increases:

    And if you haven't seen 2016 or read Dinesh D'Sousa's The Roots of Obama's Rage/Obama's America - and you want to get SOME kind of handle as to how 0's mind works - now might be the time to do so.

    His OWN book, Dreams from my Father is a chronicle of white-hatred and anti-colonialism on display for all to see.

    Bottom line (and this is NOT a conspiracy theory - it IS factual) - ALL of 0's mentors and influences, growing up and far into his adulthood to present day - were/are anti-colonialist and/or communist in their thinking, an ideology he has wholeheartedly embraced.

    His bashing of the 'rich', his total lack of concern with loading America's future generations up with debt, his expressed hope to take over American manufacturing, his unrelenting redistribution banter, etc. These are NOT American ideals - many of his slogans and tactics come directly from the Communist Manifesto.

    And like all Communists - he can't simply 'win'... he must CRUSH his opponent(s) COMPLETELY.

    In the U.S.S.R. they killed or 'disappeared' those who opposed the 'agenda'.

    This is America - they're pretty sure they couldn't get away with that (yet)... so the next best thing is to ridicule, debase, discredit and completely destroy their 'enemies'... who in this case is the entire Republican Party, the Tea Party and small government conservative thinkers in ANYONE of the 48% of Americans who were NOT 'smart' enough to vote for 'the one.'

    He does NOT want a compromise. He will NOT accept a compromise. ANY deviation from HIS agenda is NOT acceptable. Some in his OWN party have pushed back, but that won't last long. Those who do NOT tow the party, group-think line WILL be dismissed and/or removed as betrayers/traitors to the 'cause'.

    I see this going one of two ways:

    The Republicans fold - and serve up the 'rich' as sacrificial lambs to the D. Messiah.
    Taxes go up - and the economy tanks.

    The Republicans maintain their principles and refuse to sign on. Taxes go up - and the economy tanks.

    Either way, the economy STILL tanks. Either way the Republicans get ALL the blame.

    It's NOT about the economy or the middle class or the poor - it's about POWER... so either way, in O'Zero mind - he wins.

  3. A big problem with these and other "negotiations" that take place in Washington is that they are consistently skewed to the left. Most people, I think, understand the nature of negotiations. The two parties put forth their opening positions, do some posturing and haggling, and eventually settle on something somewhere in between the opening positions. The ending position might be closer to one or the other sides, but it is in between them. The problem arises when one side comes to the table with the starting idea of being reasonable and presents an opening proposal that is already a compromise, while the other side opens with a radical one-sided proposal.

    The concept of the Overton window comes into play. Over time, the range of acceptable positions is shifted toward the side that consistently offers the most outrageous proposals. In our case, the debate has been shifted from whether we should adhere to the principles of Liberty or to those of Socialism, to a debate over how quickly we should be moving toward Socialism.

    Bringing this back to the current fiscal negotiations, what we see is the Obama administration attempting to accelerate the leftward movement. Their proposals are even more radical than anything that has come before. The proper response to this is NOT to open talks with enormous concessions as the GOP has done. The proper response is to propose an even more radical move in the opposite direction -- and stick to it until the other side starts to move. The Republican opening should not have been a "good faith" offer of revenue enhancements (an insulting euphemism for tax increases), they should have proposed additional tax cuts, enormous real spending cuts, and elimination of numerous bureaucracies. And then refuse to even meet with the Democrats unless and until they put a meaningful proposal in writing.

    Yes, such tactics will likely lead to some strife and discord. Individual politicians involved risk losing their seats. But the leftists play hardball and they play to win. If you're not willing to do what it takes to beat them, you might as well just give up and join them. What concerns me most is that it looks a lot like the GOP leadership has indeed already given up.

    1. Damn, I like this guy. I think it's the same Scott that posted on the Jobs report post. He has a firm way of saying things, but I like what he has to say so far.

      It appears here that he is saying to toss out public perception. If the democrats pull more to their side, the republicans should pull more to theirs, and where they will finally meet will be in the middle, and under the Overton window, a good place for the public to be.

    2. I'm more moderate and liberal leaning, scott, and it's just a sheer shock to me that you would say it's best if the GOP became more stringent in its demants? THere is a problem here: time. Time will run out. The only way to do this is to go along with waht democrats have offered. The GOP is washed out on this one.

    3. @Scott - I like you too : ) You're spot on, and I fear there are far too many R's in the House who are more interested in votes, that what's BEST for our country.

      The GimmeDats who voted for this Commie/Socialist live in the now - they just want their stuff - with ZERO thought of the consequences of our actions today - on future generations of Americans.

      @Anonymous -'The only way to do this is to go along with waht democrats have offered.'

      Much to 0's chagrin - WE maintained control of the House. Constitutionally, the HOUSE controls the country's purse strings. IF they actually DID what they were hired to do - they'd put the skids on 0's ridiculous 'plan' post haste!

      The democrats offer will bring nothing but more debt and a deeper recession.

      * America has been without a budget since 0's first immaculation.

      * He has spent MORE taxpayer $$ than ALL previous presidents COMBINED.

      * He's dumped billions (with a B) into his campaign donors failed business 'experiments' - money that our CHILDREN and GRANDCHILDREN will be saddled with.

      * ALL government welfare programs costs have doubled.

      * Housing and by default our economy is in the dumpster BECAUSE of Fannie and Freddie (The 'Affordable Housing Act) a DEMOCRAT program rammed through that ran rampant due to DEM intervention of ANYONE trying to rein it in...

      Note: That e-e-evil president Bush TRIED numerous times and was squashed by the DEMS...

      * If THIS administration were NOT fudging the numbers - unemployment would be MORE than DOUBLE what it was under that e-e-evil president Bush. And has been that way for the ENTIRE four years... DESPITE massive govt. spending and TWO failed and wasteful 'stimulus' programs.

      * And I'm not even going to mention Egypt, Libya, Syria, Turkey, Iran - etc. etc. etc. Because, yeah, 0 'got' bin Ladin - so that's all good...

      And yes, I believe the R's WILL fold.

      So YOU and the OTHER fools who voted for this monster had better get prepared to sip your koolaide - while standing in the unemployment line.

      It's not the free-fall over the cliff that gets ya - it's the LANDING.

      Hang on tight - it's gonna be a bumpy ride - straight down.

    4. Thank you, Rick and Dara. I assume that Mr. Anonymous and other liberals would not be nearly so favorably impressed. I tend to be fairly blunt in expressing my thoughts, which is why I wouldn't make a very good politician -- at least not in an environment where many if not most people seem to think that compromise for the sake of compromise is the way to go.

      Anonymous sounds somewhat like the Congressional Republicans who are getting ready to let us down again. The Democrats have offered less than nothing. Their position is "Give us what we want now, and if it causes more problems we'll blame you for not giving it to us sooner."

      I'm not sure why Anonymous considers time to be a factor here. Is that a reference to going off of the so-called cliff? My response to that is that giving in to Obama and the Democrats sends us over a much bigger cliff. I certainly understand that if no agreement is reached, there are going to be at least short-term serious consequences -- and those consequences will be much worse for taxpayers than for the government. The looming tax increases are real and onerous, while the supposedly draconian spending cuts are nothing of the sort. But put that up against where we're headed if Obama gets even a fraction of what he's proposing. His tax increases on job creators can only worsen the employment situation. His "stimulus" spending is nothing but more scandal-prone boondoggles.

      In this situation, the Republicans should stand firm. The Democrats try to claim that the Reps are willing to raise taxes on everyone in order to avoid losing tax cuts for the wealthy. They need to turn that around and assert that the Dems are the ones prepared to raise taxes on everyone if they aren't allowed to raise taxes on "the rich". The Republicans need to repeat, over and over, that *any* tax increases on *anyone* in this economic environment will be counterproductive.

      Historically, undoing any expansion of the government is extremely difficult, usually impossible. The best time and perhaps the only time to fight an expansion is before it is implemented. Seize this as an opportunity to eliminate bloated bureaucracies that serve no economic purpose. How can you *not* make the argument that the Departments of Education and Labor, at least, are redundant, duplicating agencies that exist in every state and adding zero value. The EPA? Every state is already competent to manage its own environment. Department of Energy? Does it do anything other than interfere with domestic energy production and create scandals? Put all of these things on the table. Instead of the Republicans trying to defend their reluctance to pay for them, make the Democrats defend making *us* pay for them.


    5. There are so many things that the government does that we just don't need it to do -- and often would be better off it didn't do them. We have to start somewhere. Eliminate something. Anything. Get people used to the idea that not everything the feds do is "necessary". Move them back towards "I can take care of myself if given half a chance." Once you get the thought curve moving in that direction, then you have a chance at making the case for shutting down the Social Security and Medicare ponzi schemes. You have a shot at making people understand that that 20 percent or so of their earnings that are presently confiscated for those mandatory scams would do them much more good invested in private retirement and insurance plans at their discretion.

      What do I really expect to happen? The Republican House leadership is going to cave. They blew it with the opening salvo. By putting revenue increases on the table, they made themselves vulnerable to the lie that they're now risking across-the-board tax increases in their supposed blind allegiance to "the rich". It would be virtually impossible for them to take that offer back. They put revenue on the table, and now can only argue over who must provide the revenue. The Democrats will deploy their standard tactic -- raise taxes now and we'll pretend to cut spending later. We're screwed.

    6. Shorter Scott: If it's NOT in the Constitution - it's NOT the responsibility of the government and belongs at the STATE level : ) I agree!

      The Dems have played this game *repeatedly* over the decades - We'll gladly give you those spending cuts, later, for those those tax increases TODAY. The R's fold - taxes get raised and the cuts never come... and THEN 'they' find some NEW 'crisis' that 'they' say impels the government to create a NEW (expensive and wasteful) program or department in order to 'solve.'

      Government CREATES NOTHING; a ravenous beast, it simply CONSUMES the fruits of man's (or woman's) labor in order to replicate ITSELF.

      “Nip the shoots of arbitrary power in the bud, is the only maxim which can ever preserve the liberties of any people. When the people give way, their deceivers, betrayers, and destroyers press upon them so fast, that there is no resisting afterwards. The nature of the encroachment upon the American constitution is such, as to grow every day more and more encroaching. Like a cancer, it eats faster and faster every hour.

      The revenue creates pensioners, and the pensioners urge for more revenue. The people grow less steady, spirited, and virtuous, the seekers more numerous and more corrupt, and every day increases the circles of their dependents and expectants, until virtue, integrity, public spirit, simplicity, and frugality, become the objects of ridicule and scorn, and vanity, luxury, foppery, selfishness, meanness, and downright venality swallow up the whole society.” —John Adams (1735-1826), 2nd President of the United States

      “Government is not reason; it is not eloquent; it is force. Like fire, it is a dangerous servant and a fearful master.” George Washington

    7. Hey there Scott, glad to see another well-spoken and reasonable commentator pop up here. :)

      The ironic thing here is that, in my view, the opposite situation happened last year and this actually ended up hurting the side proposing the ‘more radical solution’ more than it helped them.

      By this, I mean that the GOP came right out the gates with a major spending&tax cut proposal while the Democrats, for the most part, failed to unite under one of their own (most of which did involve significant compromises from their original position though, of ‘no cuts whatsoever’). Which also infuriated a good deal of the Democratic base, in accusing the figureheads and Obama of ‘starting debates from the center.’

      Ultimate, yes, it did move the center of the debate towards the more radical proposal (to the right), as again the original Democratic platform was to refuse any spending cuts at all and that has long since ended. But it also painted the GOP as the more radical party, and gave a great deal of ‘ammo’ to the opposition come campaign time.