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Thursday, 03 January 2013 11:03

How the Disastrous “Cliff” Deal Got Done (a Historian’s First Take)

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In order to understand the “Cliff” deal, one must know its background in the broader Republican effort to gut Social Security, Medicare, and Medicaid:

Barack Obama had earlier driven Nancy Pelosi and Harry Reid to fits with his back-door efforts to gut such “entitlements,” as when he had appointed the conservative Democrat Erskine Bowles to serve opposite the extremely conservative Republican Alan Simpson as being the two co-chairs on the White House’s “bi-partisan” federal debt commission concerning entitlement “reform.” (The Commission produced recommendations that congressional Democrats roundly repudiated for slashing entitlements, and that Republicans condemned for increasing taxes.) Obama had set this Commission up to deal with the soaring federal deficits that had been caused by Bush’s 2008 economic collapse, by their using those federal deficits as an excuse to slash entitlements and thus produce even more suffering for the poor, at the same time as Wall Street was being bailed out. (Bowles was supported by the very Wall Street banks that were being bailed out by taxpayers. Simpson was a born conservative who followed in his father’s footsteps as Wyoming’s Republican U.S. Senator. His father had been quite extreme: “one of six Republican senators who voted against the Civil Rights Act of 1964.”) So, that was a wolf-in-charge-of-chicken-coop type of operation, which congressional Democrats opposed. Republicans opposed it because it would have meant increasing taxes – it wasn’t conservative enough for them. Thus, on the very same day, 28 March 2012, when Bowles-Simpson was finally dashed in the House, the House passed instead the Paul Ryan budget, which Mitt Romney ran on, against Obama. The 2012 “election” had been between two conservatives, one of whom pretended not to be.

At the end of 2012, Obama was making his final settlement with the Republicans on the key related issue of taxes, and he seemed to be just as willing to hand unearned gifts to Republicans as he had done back then, and as he had done by his having ditched the public option from his health plan as soon as he won the 2008 election.

On the last day of 2012, December 31st, Paul Krugman blogged at his “Conscience of a Liberal”: “The World’s Worst Poker Player,” and he asked, “Is it really possible that Obama still doesn’t understand?” Krugman expressed his concern about “many reports in the past hour or two [this was posted at 11:40 AM] suggesting that Obama is about to cave on the fiscal cliff.” Krugman, even at this late date, hadn’t figured out that Obama was a fake progressive. This had been Obama’s game-plan all along. If he had instead held out and let the “cliff” come, then the Clinton-era tax-rates would have been restored automatically starting January 1st, and Democrats would then immediately push, and Republicans would have been politically forced to vote for, restoring the Bush tax-cuts for all income below $250,000. But that wasn’t really what Obama wanted – it was just his feint – so he didn’t do that. His bad-poker-player front was just for liberal suckers. Could it still continue to fool liberals, even now? Krugman seemed to be still buying into the progressive mask.

Noam Scheiber the same day at tnr.com headlined about Obama’s deal, “Democrats’ Cliff Compromise Is Bad; But the Strategic Consequences Are Disastrous,” and he said: “I think the president made a huge mistake by negotiating over what he’d previously said was non-negotiable (namely, the expiration of the Bush tax cuts on income over $250,000). ... Obama has already shown his cards on the parameters that will define his negotiations with Republicans throughout his second term. And there’s no one to save us from that.”

Washington Post reporter Suzy Khimm blogged on the 31st, “Obama’s Wrong: The ‘Cliff’ Deal Still Raises Taxes on the Middle Class,” and she reported that, “anyone who earns $50,000 a year will still be hit with a $1,000 higher payroll tax burden,” since that tax-cut had originated with Obama, and the cliff-deal pertained only to Bush’s tax-cuts. The cliff-deal permitted that tax-cut to expire, because it was Democratic, not Republican. Republicans wanted it to expire. They got their wish. It hit the poor. Obama didn’t really care about the poor.

At daybreak on January 1st, David Rogers at the Republican site Politico headlined “The Price Tag: $4 Trillion Added to Deficit,” and Rogers failed to note that the tab would have been a half trillion dollars less if Obama’s original $250,000 cut-off had been used instead of the $450,000 limit. Glenn Thrush at Politico then bannered “Fiscal Cliff: Obama’s Legacy Trap,” and he wrote: “One staffer for a senior Senate Democrat, summing up the view of several other aides interviewed by POLITICO, called the potential deal a ‘cave.’” This Republican reporter himself characterized it very differently, saying of Obama: “His first post-election decision sought a moderate, middle course that triangulated between the extremes of both parties.” The lie there was that there were any Democratic extremists at all, to balance out the extremists on the Republican side. That was the standard Republican lie pumped in order to justify the extremists who actually controlled their own Party, the Republican Party.

This was, however, indeed Obama’s deal, a deal of his making, which the Republicans accepted, and not the other way around. Major Garrett of CBS News headlined on January 1st, “The Art of the ‘Fiscal Cliff’ Deal’,” and he reported that the President had set the deal’s parameters, including the $450,000 income threshold for tax-hikes (although Obama had consistently promised to veto any bill that didn’t have the $250,000 cut-off.) VP Biden served as the deal’s go-between, because Senate Republican leader Mitch McConnell – the key negotiator on the Republican side – wouldn’t deal with Obama personally. McConnell did a big favor for his wealthy donors, by giving them an extra $200,000 of additional non tax-increased annual income, and this gift came courtesy of Barack Obama, but McConnell refused to deal directly with that man.

After all: On 25 October 2010, the “Think Progress” website bannered “Mitch McConnell: I Want ... To Make Obama A One-Term President,” and quoted McConnell, from an interview with the Republican National Journal (which soon removed from its website all record of its interview), in which McConnell said, “The single most important thing we want to achieve is for President Obama to be a one-term president.” On 4 November 2010, McConnell gave a speech to the Heritage Foundation saying the same thing: “Our top political priority over the next two years should be to deny President Obama a second term.”

McConnell asked for Joe Biden instead of the President, and that’s what Obama gave him.

Obama had possessed the winning hand against Republicans in Congress, but he didn’t play it; he didn’t want to play it; instead, he compromised with those Republicans, and just gave away to them much of what they (their financial backers) wanted. He didn’t get from them any deal to prevent them from raising similar battles over the coming months and years. He let them save crucial political face; he let them avoid being blamed by the public for holding everyone hostage to extending tax-cuts on the top 2%. Instead of a $250,000 kick-in of tax-hikes, that level was raised to $450,000, as per Obama’s suggestion, even though the public was overwhelmingly opposed to that change. Instead of letting all tax-rates automatically revert back up to the Clinton levels on January 1st (remember how “anti-growth” those had turned out to be?), and then asking Republicans to vote to restore the Bush tax cuts for only the bottom 98% (which they would have had to do), Obama simply handed them the “out” that they needed, so that they could claim to have willingly granted this extension of lower tax-rates on the public, before the deadline and the cliff forced them to do so and to cave to the Democrats. Obama certainly wasn’t out to break the Republican Party, which he now could have done. Actually, he became instead their savior. Was this incompetence? Or was it complicity?

During the earlier part of the day on January 1st, it seemed as if House Republicans would block the deal. Eric Cantor, the Republican whip, came out publicly against it. But Boehner finally chose to break the Hastert Rule (which was followed only by Republicans), and to enable the bill to come to the floor at 9PM for a vote, even though most Republicans were against it – he’d allow it to be passed with mainly Democratic votes (thus breaking the Hastert Rule). He knew that House Republicans would vote for him to serve again as House Speaker on January 3rd, because he knew that they knew that his suspending the Hastert Rule for this vote would save the Party’s electoral chances in 2014. If he had refused to bring the bill to a vote unless it had the votes of the majority of Republican House members, that would have killed the deal and brought an immediate tax-hike to everybody; it would have proved to the public that Republican politicians cared only about the very wealthiest. Obama had given the Republicans too juicy an apple for them not to bite into it. And they did. It saved their Party. Michael Tomasky at The Daily Beast headlined “The End of the Hastert Rule,” and he pointed out that this was the only way available to save the Republican Party, because “only 85 of 241 Republicans backed the cliff bill” in the House. Tomasky speculated that Boehner had received phone “calls we’ll never know about, from various rich and influential people telling him to quit playing games,” and then he said “One question now is Boehner’s speakership,” but it wasn’t really in any jeopardy. The Hastert Rule was just a fascist custom, imposed by a fascist Republican House during the Clinton years, to be broken in such rare circumstances when violating it served the greater fascist (Republican) cause – as now.

On 2 January 2013, Ryan Grim at huffingtonpost bannered “Harry Reid Threw Obama Fiscal Cliff Proposal Into Burning Fireplace.” Some of Obama’s proposals were so vile that Reid didn’t want the public to be able to know what a Manchurian Candidate, or political Trojan Horse, was actually occupying the White House. There was a point beyond which Reid would not tread; that’s why Obama had sent Joe Biden over to negotiate with Mitch McConnell at the end. First, McConnell refused Harry Reid’s offer; then, McConnell refused to negotiate directly with Obama, and so Obama sent the man McConnell requested: Biden. As Grim explained it: “Negotiations shifted from Reid to Biden just days after an unusually intense exchange at the White House, right outside the Oval Office, between Reid and House Speaker John Boehner. ... As Politico first reported, when Boehner saw Reid – who earlier that morning had accused Boehner of being more concerned about his speakership than getting a deal [this being an indirect reference by Grim to the Hastert Rule] – he let Reid know how he felt about the charge. ‘Go fuck yourself,’ Boehner advised.”

Obama sent Biden as the closer because Biden would be willing to sell out the Democratic Party and the nation, whereas Reid would not. Biden would play the role of soldier, even for a man he despised – Obama, after all, had been elected President, and he (Biden) had not. Reid held higher his duty to the people who had elected him; there was no President under whom he served, and without whose election he would not be in his current office. However, this deal was the low point of Biden’s entire long career. Biden carried Obama’s deal, which Reid would not do. Ultimately, that’s why it ended up being negotiated between McConnell and Biden: Biden represented the President, but Reid had refused to. Reid, as the Senate’s Majority Leader, represented the American people, and he took that responsibility to be his non-negotiable obligation.

This was, in effect, the end of Obama’s Presidency. He handed congressional Republicans the means to stifle any future Democratic economic initiative in Congress.

Obama’s Presidency effectively ended before his second term technically even began. He should now have been renamed Mitt Obama, combining the professional deceiver, with liberal rhetoric. It would have been realistic, being not quite as fascist as the all-out fascist, but still just as much of a deceiver, only of a basically different type: a fraud, instead of an outright liar like Romney was.


Investigative historian Eric Zuesse is the author, most recently, of They’re Not Even Close: The Democratic vs. Republican Economic Records, 1910-2010, and of CHRIST’S VENTRILOQUISTS: The Event that Created Christianity.