Thursday, December 13, 2012

The Woes of the Speaker of the House

Boehner has trouble with his caucus.  The gist of today's fiscal cliff story from Jonathan Weisman is captured in the quote from Democratic leader Chris Van Hollen:
“The biggest impediment right now is the speaker’s ability to get a decent number of Republican votes for an agreement,” said Representative Chris Van Hollen of Maryland, who is the lead Democrat on the House Budget Committee.

“I’m getting increasingly concerned that one of the reasons the speaker is deciding to, I think, string out these discussions is that he wants to wait until Jan. 3, when the election for speaker takes place,” he said.
Which makes sense.  It appears the only way that the fiscal cliff is going to be resolved in the next two weeks is if Boehner can bring something back to the House for a vote, knowing full well that by doing so he might have to rely on Democrats and not Republicans to get it passed.  According to Van Hollen, Boehner is unwilling to do this; he wants to wait until his leadership position is secure.

Officially Boehner's bargaining position is unchanged.  He opposes an increase in tax rates for the rich; accepts the need to raise revenue in the amount of $800 billion by altering the tax code to close loopholes; and is waiting for Obama to agree to a major entitlement change, e.g., raising the Medicare eligibility age.  Unofficially Boehner is reported to be willing to accept an increase in tax rates for the rich as long he gets the Medicare change and/or a COLA reduction for Social Security.

Obama has been here once before, with the summer of 2011 debt ceiling negotiations, and he got burned.  He acquiesced to entitlement cuts, got outed, and then Boehner couldn't deliver.  Obama is not stupid.  He will not make the same mistake twice.  And the reason he won't, all strategy aside, is that the facts are overwhelming regarding the enormous redistribution of wealth over the last 30 years to the top 1%.  This from an excellent story today by Annie Lowrey:
The Congressional Budget Office has found that between 1979 and 2007, the top 1 percent of households saw their inflation-adjusted income grow 275 percent. For the bottom 20 percent, it grew just 18 percent, and federal tax and transfer programs also did less and less to reduce income inequality over that period.

The mounting concentration of wealth is even more dramatic. A recent Economic Policy Institute study found that between 1983 and 2010 about three-quarters of all new wealth accrued to the wealthiest 5 percent of households. Over the same period, the bottom 60 percent actually became poorer.
As we enter the third week of December I don't see that anything much has really changed.  Because of the Mad Mullahs in his conference Boehner doesn't feel like he can deliver anything unless he has big entitlement cuts, cuts which come at the expense of a working class that has been hammered decade after decade.  It's the debt ceiling negotiations all over again; it's as if the 2012 election never happened.  The wild card in all this is the rapid approach of Mad Mullah paradise, the debt limit.  I saw an interview the other day with Jackie Calmes.   She said a stumbling block in the talks has been the unwillingness of Republicans to bargain away their vote to raise the government's borrowing limit.

So the action over the next two weeks is going to be in what gets peeled off from the fiscal cliff negotiations and passed on its own.  Pay attention because what Congress decides to deal with by December 31 is what is really important to the people in power.  An argument can be made, and there are mentions of it in the press, that the Bush tax cuts will be extended for the 98%.  It could happen.  Politicians are interested in reelection.  But I see movement foremost on the estate tax, maybe in combination with an extension in emergency unemployment benefits.

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