President Obama leaves the Oval Office early
Wednesday after the House passed legislation to retain tax breaks for
most Americans, let tax rates rise for the wealthiest, and delay action
on mandatory spending cuts.
What we have found most intriguing is the vigorous post-facto wrestling within the liberal community over what the fiscal cliff negotiations say about President Obama.
Is he a "wimp" who blinked during fiscal cliff wrangling, failing to pursue a grand bargain and weakening his future hand?
Or a pragmatist who negotiated a "big win" in securing congressional approval for the first tax increase on the wealthy in more than two decades?
The answer we've gleaned from party stalwarts and presidential historians is a resounding "yes."
Two Sides Of The Coin
"He played his hand brilliantly," says Stanley Renshon, a political scientist and psychoanalyst whose book, Barack Obama and the Politics of Redemption, took a dive into the president's psyche.
"He got the big 800-pound gorilla — a big tax increase, and all of the implications that come from that," Renshon told us Friday.
But then there's this, from presidential historian Joseph Persico, whose new book explores Franklin D. Roosevelt's leadership during World War II.
"It pains me to say this, because I support the president, but I don't think his strength is as a negotiator," Persico says, allowing, however, that "half a loaf is better than none — and this is about five slices."
Critics of the deal are disappointed that Obama looks to have squandered a good deal of his big re-election leverage with a small-ball deal.
Liberal supporters of the outcome say the president managed a deal with a dysfunctional Republican House majority, instituting higher taxes for high earners, and preserving programs that disproportionately benefit poor and middle-class Americans, unemployment insurance and tax credit extensions.
Take your pick.
Let's take a closer look at their positions.
Obama As Victor
Critics say the president should have driven a harder bargain, even going over the fiscal cliff if necessary. Not only would Republicans have borne the blame for raising taxes on the middle class, they say, but showing a measure of inflexibility now might have strengthened the president's hand in future negotiations, by proving to Republicans that there are some lines he won't cross.
Renshon doesn't buy it.
"If I were I on the left," he says, "I would quit complaining."
Obama during the fiscal cliff negotiations, he says, was at the "point of his maximum leverage," with his electoral win still playing like "Muzak in the elevator."
"Once you lose your leverage, you don't know where the ball will roll," he said, noting that GOP House Speaker John Boehner clearly wanted to get a deal done, and Republicans were "up against a wall."
"Obama's a very smart guy, and he's playing the long game," Renshon says. "And the long game is clearly that you get almost all of what you want, but by degree."
He describes Obama as a vague, but consistent, maximalist who sees himself as a historic figure — a la Mount Rushmore — and one determined to not be the president who presides over the "demise of the liberal welfare state."
Progressive strategist Robert Creamer says that there is nothing in the fiscal cliff deal not to like. "We made progress," he said. "The president just raised the top tax rates for the wealthiest Americans, and that's a big deal in terms of the American economy and its fundamental underlying problem of economic inequality."
"But what progressives are worried about is did we give up the leverage we need to address serious problems in the next round?" Creamer says.
He argues that the administration was willing to go over the cliff if it didn't get a "good, progressive outcome."
The main criticism, as Creamer sees it, is that Obama argued throughout his campaign for tax increases on a larger swath of high-earning Americans, calling for higher taxes on those with family income of $250,000 or more, which would bring in about $800 billion in revenue.
The deal forged this week lets the taxes rise only on families with income of $450,000 and above and is estimated to produce revenues of about $600 billion.
Obama Shows Tactical Weakness
Persico argues that Obama is no Lyndon B. Johnson, who knew which arms to twist and favors to call in to put together the big deal. Like the civil rights legislation.
"President Obama lacks the seasoning to have that kind of success," he says.
The fact that Obama tapped Vice President Biden, a Senate veteran, to negotiate in the final hours with Senate Minority Leader Mitch McConnell speaks to the need for that kind of seasoning.
"What's happened here," Persico says, "is typical of the nature of our current government: There doesn't seem to be the will or the patience to deal with the essence of the problem, so they are just chewing at the edges."
It's not that Persico is arguing that failure to address the cliff would have been a good thing. He says it would have been at minimum a psychological blow to the economy.
Instead, he says, Obama could have begun a conversation much earlier, using the report of his own debt commission as a starting point "rather than have this drag on and explode."
No matter how things play out over the four years of Obama's second term, the fiscal cliff deal will be looked at as a turning point, Persico said.
Whether it will be viewed as an achievement or an opportunity lost obviously remains to be seen.
"I'm a historian," Persico says. "If you learn anything from history, if you look too far ahead, you're liable to be made to look foolish."
Obama As Obama
In his singular book, Presidential Power, first published in 1960, political scientist and presidential adviser Richard Neustadt titled his opening chapter, "Leader or Clerk?"
Conservative columnist Charles Krauthammer this week argued that the fiscal cliff deal left little doubt about where he sees Obama in Neustadt's presidential ledger.
"He's a visionary, not an accountant," Krauthammer wrote of Obama. "Sure, he'll pretend to care about deficits, especially while running for reelection. But now that he's past the post, he's free to be himself — a committed big-government social democrat."
In Krauthammer's world, that is a very bad thing. In Creamer's world, it's something else altogether.
And for Renshon, the words resonate.
"Obama is the least clerklike president we've had in a long time," he says. "The only thing holding him back from a full-fledged policy blowout that reflects where he wants to take the country is the Republican House.
"And he's learning how to neutralize it."
http://www.npr.org/blogs/itsallpolitics/2013/01/04/168632779/liberals-in-a-dither-over-whether-obama-blew-it-or-nailed-it?ft=3&f=1001&sc=nl&cc=nh-20130105
Debt Ceiling Showdown: GOP Pledges To Extract Cuts From Obama
WASHINGTON -- The just-completed deal to resolve the
so-called fiscal cliff has created an even greater cliff down the road.
By the end of February, lawmakers will have to grapple with $1 trillion
in sequestration cuts that are scheduled to take effect and the need for
a debt limit increase. Shortly thereafter, they will have to deal with
the end of a continuing resolution to keep the government funded.
Any one of these issues on its own would be difficult to resolve. Taken together, they could produce complete gridlock, which itself would have deep economic consequences.
President Barack Obama has pledged that he won't negotiate over the debt ceiling as a matter of principle. But Republicans are still insisting that they will extract as many concessions from the talks as they can.
Sen. Pat Toomey (R-Pa.) said on MSNBC's "Morning Joe" this week, "we Republicans need to be willing to tolerate a temporary, partial government shutdown" in order to achieve spending cuts and entitlement reforms.
On Friday morning, meanwhile, House Speaker John Boehner (R-Ohio) told members that he was prepared to use the debt ceiling fight as leverage to get spending cuts. According to a source in the room, Boehner showed fellow lawmakers the results of a survey by the Winston Group, a GOP polling firm, which showed that 72 percent of Americans "agree any increase in the nation's debt limit must be accompanied by spending cuts and reforms of a greater amount."
"The debate is already under way," the speaker said.
Elsewhere on Friday morning, Sen. John Cornyn (R-Texas), the second-ranking Senate Republican, penned an op-ed making a similar argument.
"I wouldn't look too much into it. I think there are three big deadlines," the spokeswoman said, adding sequestration into the mix.
A Republican Senate aide added: "We all know this deadline is coming. In regards to the CR vs the debt ceiling, a downgrade will likely occur if spending is not cut, not if Congress were to refuse to [raise the] debt ceiling temporarily."
But there would, indeed, be different consequences depending on which event is used to extract spending cuts. If, for example, Congress passes a debt limit increase but fails to pass a continuing resolution, the government can continue to borrow funds to pay its existing bills. But it would cease to operate as normal.
On the other hand, if Congress were to pass a continuing resolution but not raise the debt ceiling, the government would be operating on dwindling funds. Over time, the Treasury would fail to meet its obligations on salaries and wages, retirement funds and social security benefits.
And then there would be the macro and global impact. As a 1979 Government Accountability Office report noted:
Any one of these issues on its own would be difficult to resolve. Taken together, they could produce complete gridlock, which itself would have deep economic consequences.
President Barack Obama has pledged that he won't negotiate over the debt ceiling as a matter of principle. But Republicans are still insisting that they will extract as many concessions from the talks as they can.
Sen. Pat Toomey (R-Pa.) said on MSNBC's "Morning Joe" this week, "we Republicans need to be willing to tolerate a temporary, partial government shutdown" in order to achieve spending cuts and entitlement reforms.
On Friday morning, meanwhile, House Speaker John Boehner (R-Ohio) told members that he was prepared to use the debt ceiling fight as leverage to get spending cuts. According to a source in the room, Boehner showed fellow lawmakers the results of a survey by the Winston Group, a GOP polling firm, which showed that 72 percent of Americans "agree any increase in the nation's debt limit must be accompanied by spending cuts and reforms of a greater amount."
"The debate is already under way," the speaker said.
Elsewhere on Friday morning, Sen. John Cornyn (R-Texas), the second-ranking Senate Republican, penned an op-ed making a similar argument.
Republicans are more determined than ever to implement the spending cuts and structural entitlement reforms that are needed to secure the long-term fiscal integrity of our country. The coming deadlines will be the next flashpoints in our ongoing fight to bring fiscal sanity to Washington. It may be necessary to partially shut down the government in order to secure the long-term fiscal well being of our country, rather than plod along the path of Greece, Italy and Spain. President Obama needs to take note of this reality and put forward a plan to avoid it immediately.It wasn't entirely clear from the op-ed whether Cornyn was arguing for Republicans to avoid passing an additional continuing resolution (absent spending cuts), refuse to raise the debt ceiling, or both. A spokeswoman for the Texas Republican told The Huffington Post that she didn't see a distinction between the two, with respect to whether or not the GOP should use them as leverage.
"I wouldn't look too much into it. I think there are three big deadlines," the spokeswoman said, adding sequestration into the mix.
A Republican Senate aide added: "We all know this deadline is coming. In regards to the CR vs the debt ceiling, a downgrade will likely occur if spending is not cut, not if Congress were to refuse to [raise the] debt ceiling temporarily."
But there would, indeed, be different consequences depending on which event is used to extract spending cuts. If, for example, Congress passes a debt limit increase but fails to pass a continuing resolution, the government can continue to borrow funds to pay its existing bills. But it would cease to operate as normal.
On the other hand, if Congress were to pass a continuing resolution but not raise the debt ceiling, the government would be operating on dwindling funds. Over time, the Treasury would fail to meet its obligations on salaries and wages, retirement funds and social security benefits.
And then there would be the macro and global impact. As a 1979 Government Accountability Office report noted:
At a minimum, however, the government could be subject to additional claims for interest on unredeemed matured debt and to claims for damages resulting from failure to make payments. But even beyond that, the full faith and credit of the U.S. government would be threatened. Domestic money markets, in which government securities play a major role, could be affected substantially.More recently, JP Morgan's managing director outlined the consequences in a letter to the Treasury Department. Among the impacts projected were the following:
- A rise in Treasury's long-term funding costs;
- A contraction of credit;
- A reduction in the purchase of Treasuries by foreign investors on a permanent basis or even sell off exiting holdings;
- A downgrading of the U.S. sovereign credit rating;
- A possible run on money market funds;
- The destruction of market confidence.
- http://www.huffingtonpost.com/2013/01/04/debt-ceiling-showdown_n_2409656.html?utm_source=Alert-blogger&utm_medium=email&utm_campaign=Email%2BNotifications
