Column: Obama needs lessons in negotiating
I've said it before and have to say it again. President Barack Obama is a bad negotiator.
It also needs to be said that the whole lot of them involved in these fiscal dramas should be canned. Two months!? That's all they did was kick this down the road two months? Then we do it again?
Regardless whether you wish the deal had gone more Obama's way or the Republican's way, it's clear that Obama had a strong hand and played it poorly.
Imagine Lyndon Johnson in this scenario. He's just handily won re-election. He has the Senate. The House is under opposition leadership but with a reduced majority. The opposition is floundering trying to figure out how to repair their public image. If the opposition doesn't make a good offer, he simply holds out for going over the fiscal cliff. Then taxes go up, and the opposition has to negotiate to bring taxes down instead of up. Polls already show that a majority blames the opposition more for the dysfunction, and the public would feel even stronger that way if the fiscal cliff went on for long. Can you imagine Johnson getting anything less than an amazingly good, game changing deal?
Obama agreed to permanent settling of which Bush tax cuts would continue. That ended his biggest piece of leverage. He gave considerable ground on where that line is drawn. Shortly after re-election he was saying he wanted some stimulus, some infrastructure work, as part of the deal. He didn't get a bit of that. The payroll tax break couldn't go on forever, but economist have said ending that would hit the economy the hardest, yet continuing it wasn't even considered. In return for permanently settling the Bush tax cuts he got temporary patches. A temporary continuance of unemployment insurance and a five-year continuance of certain tax breaks aimed at workers. They didn't even really delay the sequesters, the big cuts expected to be a drag on the economy. They agreed to pay an amount equal to two months of sequesters by short-term cuts and a tax gimmick that will cost us later. Capital gains taxes were raised some but are now permanently set much lower than what wage earners pay, and the leverage to change that has been given up. He only got $600 billion in new revenue against $1.5 trillion in cuts given last year.
And this is a more experienced Obama. Who had leverage.
Congratulations to the GOP on this. Having lost the election, and lost ground in the House, they are well on their way to tying up Obama for his last four years with stalemates and wars over how far toward GOP goals to move, rather than doing anything he would have wanted to accomplish.
The worst thing about this is that it doesn't even address the immediate problem. By playing along in this drama, Obama validates the idea that this drama is real, as if it's not a manufactured crisis. It also takes the focus off of dealing with unemployment and getting the economy going.
Obama and the Democrats don't hold all the reigns of government so whatever is settled on does need to be a compromise. Fine. Here's a real compromise.
Get the economy going now, via infrastructure jobs programs and continued breaks that go directly to paychecks and such. Set a plan to slow growth of the debt/GDP ratio over 10 years by a balance of that economic growth, revenue increases, cuts (defense cuts would be smart), and a serious joint effort at the real heart of the problem, the cost of our health care, which is so much more than in other countries. Obama would get the economy moving now, and the GOP would get a plan for debt control.
There wasn't enough time to make a real deal between the election and the end of the year, when the fiscal cliff kicked in. They could have kicked the can down the road a year and had that time to work out details of a big deal, and have it done well before the deadline so people would know what to expect. That is, if they miraculously behaved well. The two months they've now delayed is again not enough time. It's just enough to go through a lot of drama again, keep our already shaky economy on edge and in the dark, and then still not have worked out a real deal. It's the worst of all possible results.
Give us two reasonable surrogates for the sides in this drama, give us people like Clinton and Dole, give us Hillary and Kyl, and this will be settled. Let Bowles and Simpson make their plan law and we can all move on; to immigration reform, to climate change, to better international trade, to how to remake the US the leader of what's next. This drama is... nothing I can find a polite word to describe.
Tom Cantlon is a longtime local resident, business owner and writer. Contact him at TomCantlon@TomCantlon.com.