You want to negotiate a deal when your bargaining leverage is at its maximum, not at its minimum. This is basic bargaining. It amazes me how few people understand this point. In 1995, Bill Clinton searched for moments of maximum leverage to bargain with the Republicans. Luckily for Clinton, the GOP never played the debt ceiling card on him. But Obama should have known the GOP would with him. A good bargainer would have known not to give up his best chip (tax cuts) without making the other side take theirs (the debt ceiling) off the table.
My biggest concern with the details reported on the proposed fiscal cliff deal, other than the most basic - that we should be looking at policies to grow the economy, not worrying about the deficit (not Dem's fault, that simply was not in the cards with this GOP)- relates to the loss of the tax issue chip while getting nothing menaningful in return on the debt ceiling.
I understand the concern about UI benefits. But I do not believe it is wise to let that concern overwhlem every other issue involved in this debate. Consider the issue of spending cuts on programs such as food stamps, Mediciad, Medicare and yes, Social Security, to name just a few.
What will the President use for leverage to get good deals on these issues? The contra argument is that military spending is a big enough chip. I am skeptical, mostly because the constituency in the Congress for Defense spending is broad and bipartisan. Frankly, it is not a good "hostage" for Democrats. They will not threaten it and Republicans know they won't threaten it.
The tax issue was the maximum leverage for Democrats. In August 2011, I argued:
Now is not the moment of maximum leverage for Dems on taxes. Frankly it won't come until after the 2012 election.
Moreover, the maximum POLITICAL advantage comes for Dems who propose extending tax cuts for ordinary Americans and saving Social Security and Medicare by raising taxes on the wealthy.there will be no short term deal that will be advantageous politically to Dems. The political advantage comes from having the GOP defend the rich at the expense of everyone else. [Emphasis supplied.]
Giving up their maximum leverage while the GOP holds on to its maximum leverage points, the debt ceiling and the sequester down the road, is not a good bargain imo.
In a vacuum, the reported deal is not terrible and can be defended in isolation. But in the larger context, it gives too much leverage to the GOP for the future, this year and beyond.
I think the Madmen in the GOP will have won this round, not because the score in this round is lopsidedly bad, but because of what the set up is for future negotiations.
Reasonable minds can disagree of course.
