Here is President Obama’s initial fiscal-cliff-avoidance proposal he reportedly offered to Republicans:
- $1.6 trillion in new revenue (including restoration of top marginal rates, higher taxes on capital gains and a return to the 2009-level estate tax, which itself is way too generous but not as bad as today’s)
$400 billion[correction:] $600 billion in additional entitlement cuts, which when added to the almost $1 trillion discretionary spending cuts already a part of law and a similar amount of “savings” from shutting down the two wars, makes well over $2 trillion in total spending cuts
- About $200 million in additional stimulus, including an extension of unemployment benefits (which the nonpartisan Congressional Budget Office acknowledges would add 300,000 jobs) and an extension of the payroll tax holiday and some money to invest in infrastructure improvements as well as some money to help still-stressing homeowners modify their mortgages
- A delay in those pesky automatic spending cuts to Defense and entitlements for one year
- Ending congressional approval of raising the debt ceiling, a silly technical requirement that in Republican hands has become fiscally dangerous
Here is how Huff Po’s Ryan Grim reported the Republican summary of Obama’s proposal:
The proposal is based on a two-step plan that would decouple the high-end tax and capital gains rates from the middle-class rates, extending only those for the middle class. It would revert estate taxes to their higher 2009 level, and raise an additional $600 billion in taxes elsewhere, according to the GOP summary. It then proposes tax reform required to raise at least as much as the tax hikes, and entitlement reform that would trim $400 billion from the programs.
Here’s how Fox’s favorite conservative pundit, Charles Krauthammer, reacted, uh, overreacted, to the President’s proposal:
It’s not just a bad deal, this is really an insulting deal… Robert E. Lee was offered easier terms at Appomattox and he lost the Civil War. The Democrats won by 3% of the vote and they did not hold the House. Republicans won the House. So this is not exactly unconditional surrender, but that’s what the administration is asking of Republicans.
There not only are no cuts in this, there’s an increase in new spending with a stimulus – this is almost unheard of. I mean, what do they expect? They obviously expect the Republicans will cave on everything. I think Republican ought to simply walk away.
Here is that other intellectual of the Republican Party, Rush Limbaugh, and his reaction on Thursday:
This is, unfortunately, one time that we can count on Republicans not taking Limbaugh’s advice. They won’t walk away. Their greasy fingerprints—the grease courtesy of their fat-cat donors—will be all over what happens, either a deal or an adventure into short-term fiscal uncertainty.
Finally, here is Ezra Klein’s analysis of Obama’s proposal that should make liberals breathe a little—I said a little—easier, as we worry about our side’s negotiating prowess:
We’re seeing two things here. One is that the negotiations aren’t going well. When one side begins leaking the other side’s proposals, that’s typically a bad sign. The other is that Republicans are frustrated at the new Obama they’re facing: The Obama who refuses to negotiate with himself.
That’s what you’re really seeing in this “proposal.” Previously, Obama’s pattern had been to offer plans that roughly tracked where he thought the compromise should end up. The White House’s belief was that by being solicitous in their policy proposals, they would win goodwill on the other side, and even if they didn’t, the media would side with them, realizing they’d sought compromise and been rebuffed. They don’t believe that anymore.
Perhaps the key lesson the White House took from the last couple of years is this: Don’t negotiate with yourself. If Republicans want to cut Medicare, let them propose the cuts. If they want to raise revenue through tax reform, let them identify the deductions. If they want deeper cuts in discretionary spending, let them settle on a number. And, above all, if they don’t like the White House’s preferred policies, let them propose their own. That way, if the White House eventually does give in and agree to some of their demands, Republicans will feel like they got one over on the president. A compromise isn’t measured by what you offer, it’s measured by what the other side feels they made you concede.
The GOP is right: This isn’t a serious proposal. But it’s not evidence that Obama isn’t serious. He’s very serious about not negotiating with himself, and his opening bid proves it. Now that they’ve leaked his initial offer, the next question is obvious: What’s their offer?