Believe it or not, there was progress in the fiscal cliff negotiations between the White House and congressional Republicans this week. Progress was made, at least in flushing out what both sides really want.
Obama’s “offer,” taken to the Hill by Treasury Secretary Tim Geithner, was a back-of-the-hand slap at Republicans. Having won the election, Obama chose to make an offer he knew Republicans had to refuse. Starting with $1.6 trillion in increased taxes over the next ten years, Obama asked for more spending — not spending cuts — and a potpourri of increased White House power and government growth. Not only did he want unilateral permanent power to raise the debt ceiling, he wanted another “if-then” deal on Social Security, promising an eleven-month study that would supposedly produce an agreement on entitlement reform.
Real progress was made in the reactions to Obama’s Christmas wish list. As Senate Minority Leader Mitch McConnell (R-Ky.) told the Wall Street Journal about his meeting with Geithner, “He noticed that I laughed. That pretty well summed up my view of what he was saying.” House Speaker John Boehner (R-Oh) called the offer “unserious” and said that there was no way the House would give the White House unilateral authority over the debt ceiling. And that was only the beginning.
In a radio interview last week, McConnell told me that the Republicans weren’t going to fall for another “if-then” deal, a point he reiterated to the WSJ. If McConnell and Boehner stick to that resolution, and they must, whatever deal may be made will have to be on legislation that takes effect now, not later, when it comes to entitlement reform and spending cuts. Boehner, on Fox News Sunday, explicitly rejected the idea of another commission to study Social Security. He said America has a serious spending problem and “we’re going to fix it.”
So, at this point, where are we? Nowhere. Which is the good news and the bad news.
It’s good news because it will be far better for our economy for no deal to be made before the year ends than if there’s another bad deal, like the Budget Control Act of 2011, which created the mess we’re in now.
And it’s bad news, because Obama and his team have focused the media narrative on one narrow issue: whether the upper income taxpayers will suffer a tax increase. As the narrative goes, that’s the only big issue dividing the two sides.
In that radio interview, Sen. McConnell told me that if the upper income rates were raised as Obama wants, the revenue would be so small that it would only pay for six days of the government’s operations. The most important issues are twofold, and the Republicans would benefit greatly by undertaking a big media offensive to clarify them.
First and foremost is economic growth. For the economy to recover, for unemployment to drop and for the economy to be able to sustain growth long enough to even begin to make up for what we’ve lost over the past six years, economic growth has to be spurred.
Obama’s plans only increase spending and maintain $1 trillion increases in the federal debt for the foreseeable future. They do nothing to reduce spending or restore growth. And while Republican ideas don’t harm growth, they don’t focus on producing it.