Are you ready for the big fiscal cliff summit?
posted at 12:31 pm on December 28, 2012 by Allahpundit
3 p.m. ET in the White House. No reporters, no cameras, just five people sitting around a table wasting each other’s time while an excruciatingly bored pundit class waits for smoke signals afterward.
This is the part of the Scooby Doo episode where Shaggy and Scoob get chased by the “monster.” I wonder how it’ll end.
Lawmakers seemed as pessimistic as ever about averting the fiscal cliff Thursday evening despite the White House scheduling a meeting with the top four congressional leaders for Friday afternoon.
The White House announced that President Barack Obama would meet with Speaker John A. Boehner, R-Ohio; House Minority Leader Nancy Pelosi, D-Calif.; Senate Majority Leader Harry Reid, D-Nev.; and Senate Minority Leader Mitch McConnell, R-Ky…
Republican Sen. Bob Corker, R-Tenn., said the GOP had expected the White House to deliver a new proposal Thursday, which never arrived, and that the meeting with the White House was originally supposed to be in the morning and was later pushed to the afternoon. Corker said that suggests to him the meeting might be more for “optics” than for cutting a deal, and he said it’s becoming more likely that the next Congress will have to deal with the cliff. The failure to address a problem two years in the making is a total “dereliction of duty,” Corker said.
Two obvious possibilities. One is that they’ll try to hash out a short-term deal that will extend the Bush tax cuts across the board for another few months while they continue broader negotiations, possibly including tax reform. Why jump off a fiscal cliff today when you can jump off another in the spring? A short-term fix might appeal to both sides since Boehner won’t have to worry about the upcoming Speaker election and O will have more Dems in the House and Senate to add to his leverage. Two is that Obama might unspool that last-minute “scaled-back” plan that people were whispering about yesterday but which never happened. According to Politico, Republicans are saying privately that they want Obama to up his offer on the new threshold for tax hikes from $250,000 to $500,000. (One Republican senator told NRO that a bill with a $500K cut-off would pass both chambers.) I don’t know why he’d do that now when he can dive off the cliff next week and then give a big speech proposing “the Obama middle-class tax cut” for those who earn less than $250K. House Democrats would support it unanimously (or nearly unanimously) and there’d likely be 30 panicked Republicans willing to join them.
Just one hitch, though: If you believe Boehner, he won’t bring any bill to the floor unless a majority of the Republican caucus supports it.
On the packed GOP members-only call, Rep. Duncan Hunter, R-Calif., asked Boehner, R-Ohio, whether he would allow Democrats to carry a bill if the Senate passed a bill to which most House Republicans would object.
“I’m not interested in that,” Boehner remarked, according to a source on the call.
The speaker’s intention to stay steadfast means a rocky final stretch before Congress plummets off the fiscal cliff. Senate Majority Leader Harry Reid of Nevada tried to put pressure right back on Boehner by asking him to take up the bill the Senate passed earlier this year that extends the 2001 and 2003 tax rates on the first $250,000 of American’s annual income.
Could be he’s lying and just saying that now in order to pressure Obama into upping his offer, but having committed to it publicly, it’d be hard for him to walk away later. Question, then: How does Boehner get Obama to come off his $250,000 offer when O will have more leverage by going over the cliff, not less? One possible answer is to sweeten the pot by agreeing to raise the debt ceiling for another year. But could Boehner get a majority of Republicans to go along with that? Supposedly he had around 180-190 votes for Plan B; how many more would he lose for a compromise bill with Obama that lowers Plan B’s threshold for new taxes from $1 million to $500K and gives O what he wants on the debt ceiling?
Exit question via Marc Thiessen: Why not let it burn instead?
Update: HuffPo’s hearing rumbles that Obama will indeed make a “scaled-back” proposal at the meeting:
House Republicans expect Obama may offer to extend the Bush-era tax rates for incomes under $400,000, as he had done previously before negotiations blew up. The president had originally argued that any scaled-back deal should set that threshold at $250,000. Republicans still may insist that it be set at $500,000.
In addition, Republicans would be granted an extension of the current estate tax, which is a 35 percent rate over a $5 million threshold. The president wants a 45 percent rate on a $3.5 million threshold but would likely be willing to bend, in part because congressional Democrats are skittish about his proposal.
The deal would include an extension of unemployment benefits and various tax breaks for businesses and lower-income workers. In a concession to Republicans, it would not include the infrastructure funding that the president has requested to help stimulate economic growth. It would also allow the current payroll tax cut to expire, meaning that individuals would see larger withholdings in their paychecks.
The deal would delay sequestration, which if left in place would result in roughly $1 trillion in spending cuts over the next decade. It would leave the debt ceiling issue unresolved.
O’s going to come off of his $250K offer and hand the debt-ceiling issue back to the GOP so that we can go through another standoff over spending cuts in the spring? I know how I’d vote on that if I were a Republican legislator. And I know how I’d vote on it if I were a Democratic one.
FLASH: President Obama’s opening offer on tax cut said to be $250,000 in income
— Bloomberg News (@BloombergNews) December 28, 2012
FLASH: Democrats said willing to consider $400,000 income threshold
— Bloomberg News (@BloombergNews) December 28, 2012