Today, it finally dawned on the media–and the markets–that we are very likely going over the “fiscal cliff.” With the House out of town, speculation turned to the Senate and expectations rose that Reid would offer his own plan to resolve the crisis. This morning, Sen. Reid tried to end that speculation and delivered a broadside attack on Speaker Boehner. He fixed the blame squarely on the House GOP and excoriated them for not being in town “working” on a deal.
Never mind that this week the Senate is consumed debating legislation completely unrelated to the “fiscal cliff,” it was intended to be nothing more than political theater. If you are trying to reach a deal, you make phone calls. If you are trying to score political points, you make a speech. Reid and the Democrats are trying to line up what they believe is a kill-shot for the House GOP.
Hours after Reid’s stemwinder, Obama arrived back in DC. You see where this is going, right? The Speaker is out of town and Reid is in no mood to negotiate. It is unlikely the Democrats would allow Obama to return to DC just hours after Reid effectively called off negotiations and then have nothing happen. Reid has now announced an afternoon press conference.
I think the odds are good that Reid, after “talking with Obama”, will offer a final, last-ditch deal. Of course, it won’t be a real deal. To win the looming blame game, though, the Dems need to show that, up until the end, they were willing to negotiate a deal. It would be smart for them to put a final “compromise” package together and kick it to the GOP.
All the attention is on the marginal tax rate debate. Reid could offer legislation which extends the Bush-era rates for everyone earning less than $500,000–a level many Blue-state Senators support–and argue that they made a concession and put the ball back the GOP court.
Now, there are a host of other problems with what the Democrats have offered up to this point. Chiefly that most of the new tax revenue is designated for new spending. The “deal” they have offered does nothing to change the spending trajectory of the federal government, a point the GOP, ineptly, was trying to make.
The media has ignored that side of the ledger, though, and will, no doubt, trumpet the Reid “deal” as a break-through the GOP should accept.
It is almost impossible to get any package through the Senate before Monday. Not to get too lost in Senate rules, but there are no “vehicles” to attach a deal without triggering procedural hurdles. Of course, these hurdles will just be framed as more GOP intransigence.
The House GOP Leadership negotiated themselves into a corner. Obama and the Democrats will be the last people with an offer on the table as we go over the cliff. The GOP will reap the media whirlwind of blame.