Okay, so the Republicans were demanding big tax cuts for the rich — lower income tax rates, and keeping in place the tax breaks that most benefit the rich, thereby insuring that the burden of any higher revenue would fall on the non-rich. Obama, incredibly, agreed to that….
The incredible thing is that even this offer was not enough.
Republicans also demanded that the $800 billion in higher revenue largely come from assuming that lower tax rates would cause the economy to grow. This is a theoretically possible outcome, but a highly dubious assumption…. The Republican position was that its higher revenue, in other words, had to be imaginary, theoretical revenue. Now, the story suggests that Obama did not agree to this demand. But he didn’t reject it out of hand, either. Instead, Obama was so desperate for a deal that he decided to proceed as if this all could be ironed out — that $800 billion in mostly imaginary revenue was really pretty much the same thing as $800 billion in real revenue. Bill Daley is quoted in the story saying, “We walked away feeling that we were 80 percent there. But no doubt about it, like any negotiation, the final 20 percent is always the most difficult.” But the difference between imaginary revenue and real revenue isn’t 20 percent of the question, it’s the entire question….
Note, of course, that the Republicans, in this account, didn’t even agree to the spending cuts plus $800 billion in largely imaginary revenue while protecting the rich. The story reports that the Republicans said they “might have a deal.” Might!
Now, let’s return to the Post’s version…. The Post places great emphasis on the fact that, in the middle of trying to get Republicans to a fantastically generous deal, a bipartisan group of Senators announced their own deal. This one included $2 trillion in higher revenue — in real money…. At this point it occurred to Obama that he might have a wee problem with his base. “We’d be beat up miserably by Democrats who thought we got out-negotiated,” recalls Daley. (Ya think?) So Obama briefly backtracked, and asked Boehner if he would give him a little more revenue — $1.2 trillion, still far less than all the other bipartisan deals — in return for deeper cuts to Medicare. Boehner refused to respond. Obama responded to the silence by calling back and offering to take Boehner’s previous offer. Boehner replied, “We don’t have time to reopen these negotiations.”
The Post’s story explains that Obama’s final capitulation failed because “by then it was too late.” But why was it too late? Because Boehner said it was too late. It didn’t have to be too late….
The Post also, hilariously, extensively quotes Republicans castigating Obama for having praised the Senate Gang of Six deal. “His appearance that day,” reports the Post, “caused more problems by increasing suspicions among conservatives about the group’s framework — and boosting their distrust of any bipartisan dealmaking.” How? Well, conservatives really hated the Gang of Six deal, and while they might have been persuaded to accept the $800 billion — really, the “$800 billion” — Obama’s praising of a different deal forced them to turn against the Obama-Boehner agreement, too.
Obviously this makes no sense whatsoever. If Republicans wanted to approve the deal negotiated between Obama and Boehner, they would have….
The obvious reality is that there never has been any way to get House Republicans to agree to a balanced deficit deal. Even the capitulation Obama offered — $800 billion in semi-imaginary revenue, all raised from the non-rich — was too much for them to agree to. Locking in that low level of revenue would have required huge cuts in spending, making a decent liberal vision of government impossible. The Post is making the case that there was a potential deal, and Obama blew it by failing to properly handle the easily-spooked Republican caucus. What the story actually shows is that Obama’s disastrous weakness in the summer of 2011 went further toward undermining liberalism than anybody previously knew.