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Reich writes: "The White House has started the bidding with substantial concessions on tax increases and spending cuts. Haven't we been here before? It's as if the election never occurred - as if the Republicans hadn't lost six or seven seats in the House and three in the Senate, as if Obama hadn't won reelection by a greater number of votes than George W. Bush in 2004."

Portrait, Robert Reich, 08/16/09. (photo: Perian Flaherty)
Portrait, Robert Reich, 08/16/09. (photo: Perian Flaherty)

Deja Vu All Over Again

By Robert Reich, Robert Reich's Blog

30 November 12


o the bidding has begun.

According to the Wall Street Journal (which got the information from GOP leaders), the President's opening bid to Republicans is:

  • $1.6 trillion in additional tax revenues over the next decade, from limiting tax deductions on the wealthy and raising tax rates on incomes over $250,000 (although those rates don't have to rise as high as the top marginal rates under Bill Clinton)

  • $50 billion in added economic stimulus next year

  • A one-year postponement of pending spending cuts in defense and domestic programs

  • $400 billion in savings over the decade from Medicare and other entitlement programs (the same number contained in the President's 2013 budget proposal, submitted before the election).

  • Authority to raise the debt limit without congressional approval.

The $50 billion in added stimulus is welcome. We need more spending in the short term in order to keep the recovery going, particularly in light of economic contractions in Europe and Japan, and slowdowns in China and India.

But by signaling its willingness not to raise top rates as high as they were under Clinton and to cut some $400 billion from projected increases in Medicare and other entitlement spending, the White House has ceded important ground.

Republicans obviously want much, much more.

The administration has taken a "step backward, moving away from consensus and significantly closer to the cliff, delaying again the real, balanced solution that this crisis requires," said Senate Minority Leader Mitch McConnell (R., Ky.) in a written statement. "No substantive progress has been made" added House Speaker John Boehner (R., Ohio).

No surprise. The GOP doesn't want to show any flexibility. Boehner and McConnell will hang tough until the end. Boehner will blame his right flank for not giving him any leeway, as he's done before.

It's also clear Republicans will seek whatever bargaining leverage they can get from threatening to block an increase in the debt limit – which will have to rise early next year if the nation's full faith and credit is to remain intact.

Meanwhile, the White House has started the bidding with substantial concessions on tax increases and spending cuts.

Haven't we been here before? It's as if the election never occurred – as if the Republicans hadn't lost six or seven seats in the House and three in the Senate, as if Obama hadn't won reelection by a greater number of votes than George W. Bush in 2004.

And as if the fiscal cliff that automatically terminates the Bush tax cuts weren't just weeks away.

Déjà vu all over again.

But if it's really going to be a repeat of the last round, we might still be in luck. Remember, the last round resulted in no agreement. And no agreement now may be better than a bad agreement that doesn't raise taxes on the wealthy nearly enough while cutting far too much from safety nets most Americans depend on.

If Republicans won't budge and we head over the fiscal cliff, the Clinton tax rates become effective January 1 – thereby empowering the White House and Democrats in the next congress to get a far better deal.

Robert B. Reich, Chancellor's Professor of Public Policy at the University of California at Berkeley, was Secretary of Labor in the Clinton administration. Time Magazine named him one of the ten most effective cabinet secretaries of the last century. He has written thirteen books, including the best sellers "Aftershock" and "The Work of Nations." His latest is an e-book, "Beyond Outrage." He is also a founding editor of the American Prospect magazine and chairman of Common Cause. your social media marketing partner


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-8 # jlohman 2012-11-30 09:55
It is cash dollars, Bob. Corruption! Live with it.
+35 # Dumbledorf 2012-11-30 09:58
Mr. Reich, it's as if George W. Bush never left the Whitehouse. Never have I seen such pandering to the wealthy elite and wall street robbers. There has to be some way to get through to President Obama and make him understand that the American people are suffering as never before.
+9 # Milarepa 2012-11-30 10:03
Sir, hope doesn't die easy, does it. Obama isn't who he seemed to be when he got in, maybe he wasn't then. His second term will be worse than the first because people believe he is now in a position to do better. Fat chance. I believe he knows exactly what he wants, which is appear to be a great American president. He will do whatever he thinks needs to be done to look good - even to the Republicans. They love him already, anything else is just show. After all, he's doing their bidding! Together they'll work it out.
+20 # Onterryo 2012-11-30 10:06
I think that Obama is letting the Republicans "paint themselves into a corner". The middle class has realized that GOP intransigence and hubris is killing America and Americans. We will see a Democratic majority in both the House and the Senate in 2014 (assuming the economy continues to improve). Unless the Republicans adopt more moderate positions by then they will lose many congressmen and several senators.
+1 # Regina 2012-11-30 12:02
....or succeed in their multiple and nefarious schemes to curtail voting rights in "red" states. Don't presume that 2014 will be better than 2010 turned out.
+10 # Old Man 2012-11-30 11:21
The republicans are standing on the cliffs edge. The American people are sick of these pompous asses and by 2014 the Democrats will hold the majority both House and Senate....All we really need is two years to straighten things out. It's to bad we will have had to wait so long for the suicide of the republican party, for a fair and balanced America.
+12 # reiverpacific 2012-11-30 11:24
Just proves my point that Obama is not a lefty as the Rethugs keep telling us -he's right-center and looking like sliding further.
Jeezus! What is gonna take.
More and stronger occupy and mass protest to hold his feet to the fire!
Hit the streets folks.
-3 # lobdillj 2012-11-30 11:36
He's your President, not mine. Tell me again why you voted for him again? I voted for Jill Stein
+8 # Regina 2012-11-30 12:03
A lot of good that did for you, or anyone else.
-2 # RLF 2012-12-01 08:19
Obama got elected and how much good is that doing you? Keep doing the same thing and expect different results? Some say it is insanity...I say it is stupidity.
+3 # Old Man 2012-11-30 12:12
Quoting lobdillj:
He's your President, not mine. Tell me again why you voted for him again? I voted for Jill Stein

Why would you vote for Jill Stein?
0 # stannadel 2012-12-01 04:27
Because she's the better candidate and as I vote in NY I don't have to worry about my vote helping the Republicans.
+2 # fbacher 2012-11-30 15:42
Obama is our President. If Romney had won, he would be your (and our) President. Jill Stein may have made a perfect President, but had 0 chance.
+1 # RLF 2012-12-01 08:22
Tax breaks for the rich, prosecution of leakers and more state secrecy than side economics...war s still going with no hope for successful resolution, less civil rights, no mention of the arts, less SS and medicare...what is the difference except in name? Maybe a few crappy appointments of people of color...that's about it.
+7 # Helen Marshall 2012-11-30 16:44
I also voted for Jill Stein - would have voted for Rocky Anderson if he'd been on my ballot. There is no way that I could cast my personal vote of approval for a man who has broken every promise he made when campaigning, and who is even now codifying the "right" of a president to kill anyone he wants to, anywhere in the world, without any need to justify his actions to the citizens. For this we fought a war of independence and wrote a constitution and bill of rights? So long as we all go on voting for the "lesser evil" we will get evil.
+1 # reiverpacific 2012-11-30 18:25
Quoting lobdillj:
He's your President, not mine. Tell me again why you voted for him again? I voted for Jill Stein

You presumeth too much.
I'm not a citizen and so don't get to vote (the good news; I don't have to do jury duty).
I'm just an activist, legal, taxpaying "Resident Alien". So there mate.
+1 # Milarepa 2012-12-01 01:44
Hello, everybody - you ain't seen nuthin' yet!!!!!!!
0 # freeportguy 2012-12-01 12:00
"moving away from consensus".

Last year, per their own assessment, Republicans needed to get "98%" of their demands for them to agree to a deal. Sounds more like extortion to me than "consensus". Or Republicans' definition of consensus differs from mine.

Why should I expect Republicans to be any less extremists and uncompromising, or take them at their word that Obama is indeed moving away from consensus?

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