Tick tock on the on the fiscal cliff negotiations...

 Politico has an interesting tick tock on how the fiscal cliff negotiations played out over thelast several weeks. Utilizing numerous interviews from White Houee and Congressional leadership staffers, the article walks the reader through the entire process from the last two months.

From trade-offs from all sides to John Boehner telling Harry Reid not once, but twice no less to "...go fuck yourself," its a compelling portrait of how this legislation got made and the fiscal cliff was avoided.

It is worth your time to read this...Great work by Politico's John Breshahan, Carrie Budoff Brown, Manu Raju and Jake Sherman. 

Click here for the entire piece...

Source:

http://www.politico.com/story/2013/01/the-fiscal-cliff-deal-that-almost-wasnt-85663_Page2.html

Obama’s evolution: Behind the failed ‘grand bargain’ on the debt - The Washington Post

(Terrific read from the Washington Post. by Peter Wallsten, Lori Montgomery and Scott Wilson.)
President Obama had just arrived home, walking across Lafayette Square after attending Sunday services with his family at St. John’s Church. In the West Wing, Obama ducked into the spacious office of his chief of staff, where he found his negotiating team huddled with two leading Republicans and a passel of aides.
To the outside world, it looked like a do-nothing summer Sunday, a disturbingly quiet reminder of government dysfunction. The prevailing theme on the weekly political talk shows was things falling apart. In two weeks, the government would be unable to pay its bills. Where were the administration and congressional leaders who might work out a compromise to avert the looming disaster? No meetings were taking place at the White House that day, one network host said.
The reality was quite different. Around 11 a.m. July 17, John A. Boehner, the House speaker, and Eric Cantor, the majority leader, had slipped through a side entrance, out of view from the bank of television cameras stationed near the front gate off Pennsylvania Avenue. The on-and-off secret negotiations were on again. They had resumed with a Friday meeting at the Capitol. And they seemed to be going so well by the time Obama returned from church that he invited Boehner and Cantor into the Oval Office to talk, just the three of them.
The sermon the president had heard that morning was a stirring Old Testament account of Jacob dreaming of a ladder that stretched to heaven. Sometimes, the pastor had said, “the best adventures occur when we venture into unmarked terrain.” Obama was in a similar frame of mind. Against the vehement advice of many Democrats, including some of his own advisers, Obama was pursuing a compromise with his ideological opponents, a “grand bargain” that would move into unmarked territory, beyond partisan divides, pushing both parties to places they did not want to go. Now might be the moment.

Click below to read a fascinating account of the negotiations of the "Grand Bargain"


Obama’s evolution: Behind the failed ‘grand bargain’ on the debt - The Washington Post:

Dems/GOP struggle with budget talks. Take a page from fantasy baseball...

Like many middle aged men, I love sports.

For years I've competed against other like minded individuals in rotisserie baseball leagues. Annually, a group of us will review statistical trends of hundreds of players, read scouting reports on the hot prospects coming up and try to assemble a better team than the other league members can. We'll check how our players are doing whenever possible. Our cell phones come in real handy. A few of us have mastered the art of pulling up the MLB.com website to check the scores/stats without even taking the phone out of our pockets. We take it very seriously and its up there with sex and eating for enjoyment.

Its very normal for a General Manager to decide he needs some of what another team has. Maybe its a starting pitcher. Perhaps a shortstop. Usually, but not always, that GM will look to other teams who have an abundance of starting pitchers or shortstops and try to figure out what they could use. Let's say they need a catcher, (Everybody in fantasy baseball needs a catcher) and I have an extra one who is better than the ones they currently have. Voila! A win-win. Time to send a trade email!

  To: John Boehner-GM of the Republican Rattlers


  Barry here from the Democratic Dazzlers. I'm looking for help at pitcher and noticed you have some pretty talented guys on your bench. I, on the other hand, have Mr. Muscles, a catcher sitting on mine because I already have Mr. Universe in my lineup. I can send Muscles your way if you could let me have Bazooka arm Bob to help my pitching.  Let me know...


 John will now weigh the advantages vs. the disadvantages of making this deal. Sometimes, its so reasonable and fair that its a fairly quick yes. Little to no haggling. Other times, its not so easy. Some guys low ball their offers from the start to give them wiggle room to graciously upgrade their offer during further negotiations. Some guys always ask for more no matter how generous the original offer was. (I call them the "...and your Mother" guys.) A better player, a draft pick, cash, etc... Sometimes the offer is just so far out of left field, you just reject it immediately. If its really dumb, you make a mental note to be wary of this certain GM's future offers.

Its not unlike the dance that the Democrats and the GOP are doing currently with the budget talks. The Dems want to increase money coming into the Government and are luke warm to reducing spending. The Republicans want to reduce spending and are very luke warm to the notion of increasing revenues. Both want to reduce the deficit. If this were fantasy baseball the Dems would be flexible on cutting spending while the GOP would show flexibility on increasing revenues. Some acceptable middle ground would be hammered out to their mutual benefit.

The interwebs this morning are running stories about the Obama Administration/Dems showing a willingness to cut two of the biggest entitlement programs, Medicare and Medicaid to the tune of more than 100 Billion dollars over the next ten years. In all, the total amount of reduced spending is projected to be 3-4 trillion dollars if the GOP will meet them part way. That by itself will come with a price tag within the Democratic voting population who often can't accept any cuts to these entitlements. Obama seems prepared to deal with that. Its a rational step. Its a serious offer. In return, the Administration wants some thing equally appealing coming its way. Except that it wouldn't be equal. They're willing to accept roughly just $1 in revenues for every $3 dollars of cuts they provide.

Three for one is a pretty serious offer and a fair one. Spending should be expected to carry a larger portion of the load than new taxes might be. Reign in the spending, get serious about reducing waste and fraud and yes cut out some of the silly tax loopholes that are costing the Government much needed revenues. See how far that gets us and then build your case if you can for increasing taxes.

If this were fantasy baseball, you might think the Dems are overpaying or the GOP is underpaying considering the return. When a trade goes through that's so unbalanced, the rest of the league shakes its collective head. We also file it away for future reference...

The budget talks aren't supposed to be a game. Seems to me that the Dems are being serious about taking meaningful steps to address the problem. Are the Republicans holding out for even more? Reasonable people agree spending needs cut, no question. They also think deals and negotiations...even in Congress...and perhaps especially in Congress...should show good faith and skin in the game from both sides.

To: Barry Obama-GM of the Democratic Dazzlers


Looked over your offer and its unacceptable. We want both Muscles and Universe coming our way. We can use one as our designated hitter. If you accept our demands, we're willing to send you Willie Noarmleff. Sure he's struggled a tad this year but we're confident he'd fit your needs. To keep it fair, we'll also toss in our current catcher, Chubby "Big" Mack to help you out. 


Deal?


JB/Rattlers


C'mon guys....yes both of you Dems and GOP-sters...

Play ball!

Promises, Promises...

What did he say?

Mitt Romney said he said it...

Michelle Bachmann said he said it...

Tim Pawlenty said he said it...

John Boehner and Eric Cantor said he said it...

Sean Hannity said he said it...

Glen Beck said he said it...

But....

President Barack Obama never said it...

The question is did President Obama actually promise if Congress approved his stimulus package back in 2009, that unemployment wouldn't go above 8%? 

Obama never said those words. Look it up...

I'm hearing it quite often these days from the GOP candidates as they take the first steps on their long walks to the Republican nomination. Its a juicy sounding claim to say the President lied about how high unemployment would go. Its just not true.

Fact is, two of his advisors made that statement, along with plenty of caveats and disclaimers. Christina Romer,  chairwoman of the President's Council of Economic Advisers, and Jared Bernstein, the vice president's top economic adviser. It was from a joint effort called the "Job Impact of the American Recovery and Reinvestment Plan. 

From Politifact: 

"It should be understood that all of the estimates presented in this memo are subject to significant margins of error," the report states. "There is the more fundamental uncertainty that comes with any estimate of the effects of a program. Our estimates of economic relationships and rules of thumb are derived from historical experience and so will not apply exactly in any given episode. Furthermore, the uncertainty is surely higher than normal now because the current recession is unusual both in its fundamental causes and its severity."

There's also a footnote that goes along with the chart that states: "Forecasts of the unemployment rate without the recovery plan vary substantially. Some private forecasters anticipate unemployment rates as high as 11% in the absence of action."

The Administration has acknowledged its projections were wrong. Just like the non partisan Congressional Budget Office (CBO) projections were wrong as well. 

Words matter. Obama had been office a very short time and his team came up with a set of projections they felt were credible. They warned through the report that the estimates were prone to fluctuations, given the volatility  of the financial markets. There's no debate they were under estimating how high unemployment would go. It is fair to say they should've had a better projection. (Although the people that do budgets, cost estimates, etc. for a living also blew it...) To suggest however, that Obama is a liar because he "promised" unemployment wouldn't go above 8% is simply untrue. 

This election cycle like those before it will have an endless supply of unfair allegations like this one. To the average Hannity or Beck listener/viewer, it sounds plausible. Its certainly something they'd be inclined to agree with and share with their like minded friends. It grows and grows. There will many more by the time November 2012 arrives. On both sides. As interested voters, its our job to fact check everything that we hear. Trust no one. Not Fox, not MSNBC, or whoever you prefer. 

Just as important, ask yourself why does a particular person misrepresent the facts? If you consider Hannity or Olbermann to always tell you the truth, why are they actually failing you? Often on a nightly basis. If you belong to a political personality's fan club, you might be prone to accepting some pleasant sounding but factually wrong information. 

It bothers me. 

It should bother you.

Its very vogue these days to toss around quotes from the founding fathers, so consider this from Thomas Jefferson:

 If we are to guard against ignorance and remain free, it is the responsibility of every American to be informed."

Sources: 

http://www.nbc12.com/story/14190126/politifact-virginia?redirected=true

http://tpmdc.talkingpointsmemo.com/2011/07/mitt-romney-ok-maybe-obama-didnt-make-the-recession-worse.php

http://www.politifact.com/truth-o-meter/statements/2011/jan/26/michele-bachmann/rep-michele-bachmann-says-white-house-promised-sti/

http://articles.latimes.com/2010/oct/23/news/la-pn-pawlenty-obama-20101024

http://www.politifact.com/truth-o-meter/statements/2009/jul/09/eric-cantor/Cantor-and-other-republicans-say-obama-promised-s/

http://conservativeamerican.org/dems-libs-socialists/dems-libs-socialists-obama/obamas-top-10-broken-promises/

http://www.mediaite.com/tv/glenn-beck-warns-america-is-on-the-verge-now-of-a-great-great-depression/

http://otrans.3cdn.net/ee40602f9a7d8172b8_ozm6bt5oi.pdf

Speaker Boehner, we really do need an adult conversation about our Debt...

"I think it’s time for us as Americans to have an adult conversation with each other about what’s driving the debt." (John Boehner, R-OH, Economic Club of New York, May 9, 2011)


  That's fine with me, Mr. Speaker. 


  We're fast approaching the time when we need to raise our debt ceiling or face very bad repercussions around the world. We've done it before many times and now is not the time to stop. No one disputes we need to address our debt, only how. Historically, its been a combination of both cuts in spending and tax increases that have yielded the best results. 


  With your statement that "everything is on the table except for tax increases," you suggest that everything we desire can be attained by cutting expenses in a variety of areas. I don't believe you believe that. While you trot out faithfully the "the American people deserve an adult conversation" line, you drag the conversation into a different direction entirely. Perhaps less political posturing and more adult-like behavior might produce results more appealing to the American People. 


 After cutting taxes, Republican leaders, led by Bob Dole, convinced President Reagan tax increases were necessary to a recovery in the 80's. Reagan took the advice, raised taxes and helped improve the US economy. George HW Bush infamously raised taxes as well as Bill Clinton. The world did not end, the sky did not fall and we had a pretty good run after those tax increases. 


 That said, according to the Bureau of Economic Analysis, Americans paid the lowest percent in taxes since 1958. That's fifty-three years ago. In 2010, we paid 23.6% of our income in combined Federal, State and Local taxes compared to 27% which we paid between the years of 1970 through 1999. That 3.4% reduction equates to roughly 500 billion dollars for our various government coffers. 


 The decline in tax percent is attributable to two main factors. Lower tax rates and lower tax revenues caused by high unemployment of recent years. Both President Bush's (#43) and President Obama's tax cuts have contributed to this negative effect on revenues. 


  President Reagan's own Budget Director, David Stockman, has stated that trickle down economics do not work. Further, he's no fan of the Bush tax cuts whatsoever. He's got plenty of dislike for Democratic fiscal policy, as well. 


  Previous tax increases have helped in the past and they could help now. We need a smart blend of aggressive and comprehensive spending cuts AND tax increases. Surely a true "adult conversation" could convince most Americans its time to address our debt from both ends, just like they do. The average American household experiencing financial problems seeks not just to cut expenses, but they also look for ways to increase the amount of money coming into the home. Its what the Country should do. 
  
Quickly...




Sources: 


http://www.hamreport.com/2011/05/john-boehner-says-he-wants-trillions-in.html?spref=tw


http://finance.yahoo.com/blogs/daily-ticker/boehner-no-tax-hikes-pledge-completely-incomprehensible-ft-145656288.html%20?sec=topStories&pos=8&asset=&ccode=

http://www.nytimes.com/2004/06/08/opinion/the-great-taxer.html?pagewanted=1

http://www.usatoday.com/money/perfi/taxes/2011-05-05-tax-cut-record-low_n.htm

http://www.nytimes.com/2010/08/01/opinion/01stockman.html