Jim VandeHei and Mike Allen report today that the fiscal talks appear to be going poorly on the surface, but “behind the scenes,” top officials seem to agree that the “contours of a deal … are starting to take shape.”
The argument over taxes appears to be the most straightforward. President Obama will not budge from his position of higher rates on income over $250,000, and Republicans realize they lack leverage on the issue.
But to complete a larger bipartisan agreement, Republicans will demand “specific cuts to entitlement spending.” What kind of cuts? No one has the foggiest idea, and even behind closed doors, GOP leaders won’t say.
A top Democratic official said talks have stalled on this question since Obama and congressional leaders had their friendly-looking post-election session at the White House.
“Republicans want the president to own the whole offer upfront, on both the entitlement and the revenue side, and that’s not going to happen because the president is not going to negotiate with himself,” the official said. “There’s a standoff, and the staff hasn’t gotten anywhere. Rob Nabors [the White House negotiator], has been saying: ‘This is what we want on revenues on the down payment. What’s you guys’ ask on the entitlement side?’ And they keep looking back at us and saying: ‘We want you to come up with that and pitch us.’ That’s not going to happen.”
This is critically important, in large part because the fate of the talks hinge on whether Republicans get the entitlement cuts they want – which means they’ll have to figure out which entitlement cuts they want.
Some of this is the result of a noticeable lack of Republicans with real policy chops. GOP officials have some relatively clear ideas about ending Medicare and replacing it with a voucher scheme, but since that’s not going to happen, the party opens its file named “Our Other Medicare Ideas,” and finds it empty. They want Obama to go first because, beyond knowing they want cuts, their own vague wish list is superficial and lacking even hints of depth.
And the rest of this is the result of Republicans being able to read polls as well as everyone else.
GOP proposals to cut entitlements are very unpopular, and the more they stand up in support of their own agenda, the more they risk alienating the American mainstream (even more than they already have).
Part of any negotiating process is participants willing to strike a deal, but just as importantly, participants who actually know what they want and are prepared to put their ideas on the table.
As Ezra Klein explained, we haven’t reached that point yet.
The solution [Republicans have] come up with, such as it is, is to insist that the Obama administration needs to be the one to propose Medicare cuts. “We accepted this meeting with the expectation that the White House team will bring a specific plan for real spending cuts — because spending cuts that Washington Democrats will accept is what is missing from the balanced approach that the president says he wants,” Boehner spokesman Michael Steel said in regard to the most recent round of talks.
Democrats find this flatly ridiculous: Given that the Obama administration would happily raise taxes without cutting Medicare but that Republicans will only raise taxes if we cut Medicare, it falls on the Republicans to name their price. But behind their negotiating posture is a troubling policy reality: They don’t know what that price is.
Greg Sargent added some additional context that’s worth keeping in mind: “[T]he White House actually has made an opening offer of sorts on entitlements. The Obama budget contained $340 billion in Medicare cuts over 10 years, mostly targeting drugmakers, providers, and high-income beneficiaries. The White House has reiterated that those are on the table. For the left, hitting middle and low income beneficiaries with higher costs will be unacceptable. If Republicans don’t think the White House’s proposed cuts are enough, that’s fine, but it should be on them to say what they want.”