Nutter's Washington

How to Negotiate the Fiscal Cliff: Lessons from my Dad

My father was a very good negotiator. He would sit there during a discussion and not say a thing. He would puff on his cigar and let the other side negotiate with themselves. This brings to mind the current negotiation on the “fiscal cliff”. Mr. Obama is not negotiating, he simply is letting the Republicans negotiate with themselves. 

In a real negotiation, each side wants to accomplish something. In this case, the President wants to raise more taxes. The Republicans have ceded that point, although the mechanism is not clear. The Republicans also want to cut entitlement spending, reduce the bloated and dangerous deficit. However, Mr. Obama has no intentions of cutting any spending. In fact, his proposals would increase spending; increase the debt on a net basis.

So, how do you get someone to budge, negotiate, move when they have no intention to doing it. There is more wisdom for my father, who also said, “Never want something so much that you can not walk away” In other words if you cannot achieve a goal, then let it go.

I have repeatedly said this; Mr. Obama has no intention of cutting any spending. His statements to the contrary are disingenious at best. His goal is to enlarge the federal government as much as he can. He believes in class warfare and redistribution of wealth to do so. His goal is to create a country and society, which depends on its government to function, to make decisions, to allocate resources and restrict individual choice and eschews responsibility. These are harsh statements but it is hard to see otherwise.

The increase in the tax rate is a red herring. The money raised is puny. Any increases in revenue will not stop the growth of government spending, and will not make one wit against the deficit. Everybody knows it and if they think otherwise, well there is no hope for them.

 An increased tax rate for upper income taxpayers is all about politics. It is not about the economy. It is not about fairness. It about some childish power game where one side can say they won.

It may be revenue needs to be raised. Let everyone contribute to this national cause. Reform the tax code. Make it simplier, less giving. However, without addressing spending, the deficit, the debt will engulf us all. That is a certainly and it is lost on the Adminsitration either my design or ignorance, I guess 

There is one more lesson my dad taught me and that was always leave the last nickel on the table so the other guy thinks he won or at least not lost. That is the way both sides can continue to do business in the future. I surely do not see it here.

In any event, no one knows how this will play out. It is clear Democrats intend to blame Republicans for any adverse effects of going over the cliff. That is also a mistake, as no matter what, the economy belongs to the President. Failure to address the situation in the long run will be seen for what it is, a failure of leadership. Nothing new there.

If Mr. Obama does not want to negotiate, then maybe the best thing for the House Leadership, is to pass a bill with the increased rates on the wealthy, cutting out those out those nice little tax giveaways favored by the Administration and  include some simple the spending cuts then adjourn and leave it to the President to step up or step down.

 Oh, by the way, I would also make the tax increases effective for only one year as well as everything else.

 

 

Lessons of the Fiscal Cliff: What we have learned so far

The negotiations to resolve the national fiscal pickle in which the government and thus all of us find ourselves are ongoing. The leaders say they do not want to negotiate in public but that is what, of course, is what is happening. There is a meeting here and a leak, a call here and a press conference, a statement released and, naturally, a campaign appearance by the President, who by the way won the election.

I do not know what will happen to all of this, not the specifics anyway. No one does.  However, at this point with about 27 days and counting according to those ridiculous fiscal cliff countdown clocks, there are a number of things to take away from all of this at this point.