The natural progress of things is for liberty to yield and government to gain ground. —THOMAS JEFFERSON, 1788

Republican counter-offer to Obama is bad for three reasons

Earlier today, House Speaker John Boehner (R-OH) released a letter to President Obama with the House’s counter-offer to President Obama’s fiscal cliff proposal. From the letter, seen at the Speaker’s website:

With the fiscal cliff nearing, our priority remains finding a reasonable solution that can pass both the House and the Senate, and be signed into law in the next couple of weeks.  The best way to do this is by learning from and building on the bipartisan discussions that have occurred during this Congress, including the Biden Group, the Joint Select Committee, and our negotiations leading up to the Budget Control Act.

For instance, on November 1 of last year, Erskine Bowles, the co-chair of your debt commission, presented the Joint Select Committee with a middle ground approach that garnered praise from many fiscal watchdogs and nonpartisan experts.  He recommended that both parties agree to a balanced package that includes significant spending cuts as well as $800 billion in new revenue.

Notably, the new revenue in the Bowles plan would not be achieved through higher tax rates, which we continue to oppose and will not agree to in order to protect small businesses and our economy.  Instead, new revenue would be generated through pro-growth tax reform that closes special-interest loopholes and deductions while lowering rates.  On the spending side, the Bowles recommendation would cut more than $900 billion in mandatory spending and another $300 billion in discretionary spending.  These cuts would be over and above the spending reductions enacted in the Budget Control Act.

This is by no means an adequate long-term solution, as resolving our long-term fiscal crisis will require fundamental entitlement reform.  Indeed, the Bowles plan is exactly the kind of imperfect, but fair middle ground that allows us to avert the fiscal cliff without hurting our economy and destroying jobs.  We believe it warrants immediate consideration.

This proposal by Speaker Boehner is eminently reasonable for a debate in Washington. Which is why it’s a totally inadequate counter-proposal, for at least three reasons:

First, while the President’s proposal was a ridiculous offer, that’s where negotiations are supposed to start in debates like this one. The left starts on the left, the right starts on the right. Unfortunately, while President Obama is starting off to the left, Boehner is already starting off with a relatively centrist proposal.

Personally, I’d advise the Speaker to start with a truly conservative plan — perhaps something like $600 billion in specific cuts plus $300 billion in eliminated tax loopholes (with concurrent lower rates), all in place by December 31, 2013, and modest means-testing of Social Security and Medicare. Cuts could include elimination of various corporate and other subsidies, fraud, inefficiency, and waste prevention, food stamp reductions and welfare means-testing, and modest defense cuts.

“That’s too conservative!” some will wail. That’s true. Which is why negotiation then may head more to the center. But starting at minor cuts and tax increases (and trusting politicians to implement them in multiple Congresses) is unwise.

Second, the Speaker’s offer assumes the elimination of tax loopholes means those loopholes will go towards deficit reduction. While it’s a nice thought, does the Speaker really trust this President to hold firm to that promise? Higher taxes will almost certainly go towards new spending.

Lastly, Boehner’s offer is a clear capitulation on the House’s power in these kinds of negotiations. The fact is that while the House is only one-third of the negotiators in these discussions, the GOP holds all the cards in that one-third. Which means that if the House leadership is truly concerned about the fiscal future of the country — a future that looks quite dim right now — it should make a conservative offer and then go home, as the President similarly went on vacation after putting his offer forward. Negotiating a weak deal will simply allow the country to sink further, while a good plan could allow for an economic rebound and hope for a future not burdened by massive debt.

I have a great deal of sympathy for Speaker Boehner. At heart, he seems like a nice guy who simply wants to negotiate in good faith. Unfortunately, the nation’s fiscal problems were partially created by such negotiations, and thus require more than centrist “good faith” compromises. Just as importantly, he is dealing with a President who clearly has no interest in good faith, and so negotiating the way the Speaker is basically is an admission of defeat. Just not a formal one.

All opinions published at Liberty Unyielding are mine, and do not represent any employers, past or present. 

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