As bargaining terms continue to leak out over the course of the morning, I’m considering revising my morning take that the White House’s willingness to move off the $250,000 goal makes sense.
The problem isn’t that $250,000 is sacrosanct, the problem is a timing mismatch between what Democrats are asking for and what Republicans are asking for. The GOP is asking for a permanent change in the tax code. That’s very different from the 2010 lame duck deal where lots of people felt Obama got rolled, but in fact he preserved tons of leverage by making none of the Bush tax cuts permanent. In exchange, Republicans seem to be talking about giving Democrats temporary concessions in terms of Unemployment Insurance, sequester, doc fix, etc. That temporary mismatch is a bad deal.
In policy terms, note that it’s also totally different from a “barbell” stimulus proposal that spends more in the short-term in exchange for spending less in the long term because the tax concessions make the long-term deficit bigger rather than smaller.
Now the White House is apparently pointing out to people that at one point Chuck Schumer and other Senate Democrats were pushing for a $1 million cutoff for tax increases. And so they were. But by the same token, we saw that when John Boehner tried to take that up as his Plan B that House Democrats held firm against it and he couldn’t deliver enough GOP votes for it to pass the House. So it’s hardly inevitable that the White House will get rolled if they refuse to make a deal. Dealing on the $250,000 point makes perfect sense if Obama can get something good in exchange. But getting temporary concessions for permanent ones just to set the table for inevitable fights over appropriations bills and the debt ceiling doesn’t make much sense.