Politics & Policy

Fiscal-Cliff Negotiations

If Obama wants to act in secret and in haste, Republicans should call him on it.

Republicans had better wake up and realize that their negotiations with the White House aren’t so much about how to avoid the looming “fiscal cliff” as they are about President Obama’s attempt to cement his historical legacy as a great liberal hero by forcing them to repudiate their anti-tax pledges.

On Thursday, Treasury Secretary Tim Geithner presented the White House’s position on averting the fiscal cliff. It called for $1.6 trillion in higher taxes, a one-year postponement of spending cuts on defense and domestic programs, a brand-new stimulus program totaling $50 billion, and unspecified savings of $400 billion in Medicare and other entitlement programs. Social Security is off the table. Five major tax hikes already set to kick in on January 1 — taxes on everything from flexible savings accounts to medical devices — would become permanent. Even the New York Times noted that the proposal is “loaded with Democratic priorities and short on detailed spending cuts” and goes way beyond the “balanced” approach President Obama advocated during the campaign.

Ezra Klein, the Washington Post’s pro-Obama blogger, is exceptionally candid about what the White House is up to. “The GOP is right,” he writes. “This isn’t a serious proposal. But it’s not evidence that Obama isn’t serious. He’s very serious about not negotiating with himself, and his opening bid proves it.” He said the White House was trying to flush the GOP’s bottom-line position out into the open where it could then be attacked.

But if House Speaker John Boehner and Senate Minority Leader Mitch McConnell play that game, they can’t be assured the bargaining will be in good faith. Boehner aides bitterly complained on Thursday that a late-night phone call their boss had with Obama was leaked to the media, despite an agreement it wouldn’t be. Roll Call, the Capitol Hill newspaper, noted that Republicans now “believe the president is more interested in raking them over the coals publicly than striking a deal privately.” Duh.

President Obama knows just how much Republicans fear being blamed for tax hikes on middle-class families if the fiscal cliff is reached on December 31. Deeply ingrained in the psyche of every congressional Republican leader is the government shutdown of 1995, for which Republicans were blamed.

The actual history is more complicated. Former Clinton aide George Stephanopoulos, now host of ABC’s This Week, has written in his memoir that Democrats, until then holding out against the Republicans’ budget-limiting efforts, were close to blinking when Bob Dole and Newt Gingrich blinked first. “Whether the cause was hubris, naïveté, or a failure of nerve,” Stephanopoulos explained, “the Republicans had blown their best chance to splinter our party; from that point on, everything started breaking our way.”

Republicans must recognize that while going over the fiscal cliff would damage them politically, so too would their surrendering to Obama. Post-election Gallup polls show that only 11 percent of Americans favor tax hikes alone (basically the current Obama position) in any deal to avert the fiscal cliff. According to Gallup, 88 percent favor taking “major steps” to bolster the long-term stability of Social Security and Medicare. In addition, 92 percent of Americans believe “major cuts” to federal spending are an important priority. A full 68 percent say both sides should “compromise equally.”

But the only way the general public can tell who is offering serious proposals and is willing to “compromise equally” is for the budget negotiations to be held in public. If they’re held in secret, leaks by one side or the other could improperly frame the issue. Secret talks allow the White House to avoid having the Congressional Budget Office score its proposals and reveal them to be as phony as the last Obama budget, which not a single Democrat in the Senate voted for. A backroom deal that is then forced on rank-and-file members of Congress at the last minute would be both bad policy and bad politics.

President Obama rode to the White House in part on promises of transparency and open government. Recall his promise to conduct all health-care negotiations in front of C-SPAN cameras. He broke that pledge. Republicans should now demand that the budget talks be televised.

When Grover Norquist, the head of Americans for Tax Reform, proposed on Sunday’s Meet the Press that budget negotiations be made public, host David Gregory was openly dismissive: “That’s not going to happen, you know that.” But shouldn’t Republicans propose that anyway, if only to show which side wants to put its ideas before the American people and has nothing to hide?

Absent public negotiations, House Republicans should pass a bill preserving the status quo for 120 or 180 days, thereby delaying tax hikes and budget cuts until next year. Senate Republicans can try to force a vote on a similar measure. At least then it will be clear who wants to avert the fiscal cliff and who wants to act in haste and in secret to pass a last-minute budget deal. As Nancy Pelosi once said of Obamacare, “We have to pass the bill so you can find out what is in it.” The same would be true of any last-minute deal to avoid the fiscal cliff.

The fiscal cliff is indeed a moment of political peril for Republicans. But the outcome doesn’t have to be bad. Two years ago, during the debt-ceiling debate, Republicans held firm, didn’t blink, and won some serious spending restraint and an extension of the Bush tax cuts. Of course, Republicans are nervous about the game of brinksmanship now under way in Washington. But they should realize that, as in the government-shutdown debate of 1995, Democrats are probably just as nervous, even if that’s not apparent or well reported. The worst outcome for Republicans would be a preemptive surrender to Obama’s bullying. They would gain little in terms of policy, alienate their base, and acquire a reputation for being easily rolled.

— John Fund is national-affairs columnist for NRO.


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