Thursday, February 10, 2011

A Strategy Of Giving Republicans Enough Rope?

"If the president is willing to do what I and my members would do anyway, we’re not going to say no," McConnell said at a breakfast hosted by Politico's Mike Allen on January 26th.

Mitch McConnell (R-KY) seemed to say If Obama Acts Like A Republican, We Can Negotiate With Him.

Last December President Obama and Republican leaders in Congress compromised on what to do about Bush tax cuts for millionaires and billionaires that had been set to expire this year.

The compromise was to extend Bush's tax cuts for millionaires and billionaires to 2012 - the Presidential election year.

President Obama caught a lot of flack caving to the right, particularly from his progressive base, for the tax deal he cut with Republicans to extend the Bush tax cuts in exchange for, among other things, an extension of unemployment benefits. (Under Obama Taxes Reach Lowest Level Since Truman)

On Wednesday President Barack Obama and Republican leaders in the House had a lunch meeting at the White House to find some more common ground compromises. Obama considered the meeting with House Speaker John Boehner, R-Ohio, and his top two deputies "constructive" and cited general agreement with them on the need to reduce spending and the deficit, White House press secretary Robert Gibbs told reporters.
Rep. Eric Cantor of Virginia, said the lunch discussion was "fairly robust" and that the meeting demonstrated general agreement on the need to seriously cut spending -- a top priority of House Republicans.
The day following Wednesday's meeting between GOP House leaders and President Obama’s the top news item is that Obama's proposed 2012 budget will cut several billion dollars from the government’s energy assistance fund for poor people, officials briefed on the subject told National Journal. The Low Income Home Energy Assistance Program, or LIHEAP, would see funding drop by about $2.5 billion from an authorized 2009 total of $5.1 billion.

Sen. Chuck Schumer, D-N.Y., said that a Republican proposal to cut home heating oil counted as an "extreme idea" that would "set the country backwards." Schumer has not yet reacted to Obama's proposed cut. Sen. Jeanne Shaheen, D-N.H., declared: “The President’s reported proposal to drastically slash LIHEAP funds by more than half would have a severe impact on many of New Hampshire’s most vulnerable citizens and I strongly oppose it." A spokesman for Rep. Edward Markey, D-Mass., declared similarly: “If these cuts are real, it would be a very disappointing development for millions of families still struggling through a harsh winter.” In a letter to Obama, Sen. John Kerry, D-Mass., wrote, "We simply cannot afford to cut LIHEAP funding during one of the most brutal winters in history. Families across Massachusetts, and the country, depend on these monies to heat their homes and survive the season."

Billion of dollars must be cut from the government’s energy assistance fund for poor people in large part because Bush's big 2001 and 2003 tax cuts for millionaires and billionaires were extended to 2012.

But one (perhaps unintended, perhaps intended) consequence of extending Bush's tax cuts for millionaires and billionaires for two more years seems to be emerging as Democrats start to hammer the jobs message.

The December deal seems to have taken away one of the GOP’s main talking points on the jobs and unemployment issue according to a US News Op-Ed, "Obama Tax Deal Left GOP Without Jobs and Unemployment Answers," by Robert Schlesinger:

Congressional Democrats have started lashing House Republicans about their lack of focus on jobs, noting that the new majority’s first few acts have been sops toward the base like healthcare repeals and a raft of abortion-restricting provisions. Wednesday Democrats launched a “When Are the Jobs?” website. [Read Robert Schlesinger: GOP Falling Into the Same Healthcare Trap That Snared Democrats]

But what answer could the GOP have? Tax cuts have become the alpha and omega of GOP economic policy, but they played that card even before they took control of the House when Obama agreed in December to extend Bush's tax cuts.

Having more or less gotten what they wanted with the Bush tax cuts they’re not in an especially strong position to go back to the tax cut well--especially in this fiscal environment. Still it's surprising that with an economy that remains soft they are not even making a pro forma rhetorical attempt at cutting the individual tax rate.

Instead House leadership is faced with a rank-and-file [Tea Party] uprising on the right demanding more spending cuts. While the GOP has tried to decouple tax cuts from the budget deficit, even they can’t with a straight face make a new tax cut pitch in the face of the dreaded "Obama deficits" ... not that the party can credibly claim new status of deficit hawks after their tax deal added hundreds of billions of dollars to the budget deficit.

What they’re left with is a “cut-and-grow” program that even Republicans admit isn’t selling.

Here’s the GOP’s problem: the idea that cutting government spending will necessarily lead to job growth might be a given in conservative ivory towers, but its logic isn’t obvious to most Americans.
And if they want to know how easy it is to sell notions that require more than one bumper sticker to explain, they can ask the Democrats how the healthcare reform debate turned out.
After 30 years of trying, cutting taxes to stimulate the economy and create jobs, has never worked.

But, during the Bush years Republicans cut taxes while at the same time more than doubling the size of the federal government. The Republican "cut and grow" approach to stimulate the economy turned budget surpluses to budget deficits and ballooned the federal debt to $13 trillion. Democrats are just as angry about Bush's $13 trillion federal debt as anyone marching in the Tea Party movement!

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