President Obama concessions on inflation adjustments to Social Security, and reduced tax revenues are not enough for House Speaker John Boehner who is holding the President's feet to the fire by announcing his latest back-up "Plan B" to bring a House vote on a tax cut for but those earning over $1 million a year, as reported by Lisa Macaro.
Boehner is still negotiating with President Obama so this offer is apparently intended to pressure President Obama into to "sweetening his new offer of yesterday" which is already raising opposition from Democrats based on reports it includes $130 billion in spending reductions from modifications that will reduce the cost-of-living adjustments to Social Security.WASHINGTON -- House Speaker John A. Boehner has launched "Plan B" in budget talks, announcing Tuesday that he will bring for a vote his proposal to extend expiring tax breaks for all but the wealthiest Americans who earn more than $1 million a year. ...
The Ohio Republican's decision, shared behind closed doors during a morning meeting of rank-and-file lawmakers, is an abrupt shift after he and Obama substantially narrowed their differences in the latest round of talks. ...
"We have to stop whatever tax rate increases we can," the speaker was expected to tell his troops. "In the absence of an alternative, as of this morning, a modified Plan B is the plan. At the same time we're moving on Plan B, we're leaving the door wide open for something better."
Press secretary Jay Carney has already dismissed Boehner's Plan B, saying it can not pass the Senate, so therefore will not protect middle class families. Carney also said President Obama will not accept a deal that shifts the burden for additional revenue to the middle class, instead of the wealthiest.
I wish he would say the same thing about having our bloated military spending carry the burden of government spending reductions instead of asking the elderly, poor, and sick to shoulder these cuts with the chained CPI for Social Security, especially for such a relatively small amount as $130 billion over ten years, -- $13 billion a year in defense cuts would not even be noticed, compared to the symbolic value of having the GOP set up Obama and the Democrats as having symbolically betrayed the elderly, poor, and sick. But, the chained CPI will continue to compound for the rest of the century, becoming quite substantial in out years.
Carney added that Obama "is not willing to accept a deal that doesn’t ask enough of the very wealthiest in taxes and instead shifts the burden to the middle class and seniors."
We Democrats need to map out our "Plan B," or Best Alternative To a Negotiated Agreement, aka BATNA. Howard Dean has been suggesting for some time now that the automatic sequestration cuts combined an intense campaign to force Republican to cave on the the Senate tax cut extension for those earning less than $250,000. Since even the President's latest proposal apparently already gives up an extension of the Social Security Payroll tax holiday, we could add an equivalent amount of "stimulus" by proposing a reduction of the middle class tax rates even further than the Bush tax cuts, and make up the lost revenues by adding the 28% cap on deductions.
This would require a stand off on the debt-ceiling as well, but it looks like we may do better by adopting the same "carrot-and-stick" negotiating strategy as Boehner is doing. Only in such an adversarial stand-off will we have a chance of creating so much political theatre and pressure from constituents that we might get 25 House GOP to break ranks and vote with us on the middle class tax cuts.
This is the line of thinking Speaker Boehner is trying to preempt with this Plan B proposal - so he can neutralized this threat by saying to middle tax voters that it is the Democrats who are causing your taxes to go up, not the Republicans.
It may be time to pull these negotiating out of the "darkened smoked filled rooms" and bring them out into the open, with transparency, and full public debate. A development of a "hardball" Democratic Plan B, BATNA may help.
