Thursday, March 29, 2012

Obama and Boehner Debt Negotiations

A good article in the NYTimes magazine on the Obama/Boehner debt negotiations. 

Two points stand out for me.. 

1) Obama unilaterally changed the previously agreed framework of $800 bn/10 yr new revenue to  instead demand $1.16 tn/10 yr revenue. In doing so he ambushed Boehner and showed that he was not willing to engage in realistic negotiations.

2) Compared to the looming medicare cost curve explosion, the medicare savings that Obama was offering were extremely low - $1.05tn/20 yr savings. From my perspective, a serious deal would have required at least 50% more savings on that time frame and more realistically, probably double that amount. Democrats can try and claim that the President was offering terribly hard ideological sacrifices, but the state of medicare's finances demand that real, substantial savings can be found.

It is true that elements of the Republican Party lack a realistic attitude that accepts the need for compromise. However, Obama and Boehner had a deal and Obama reneged on it. The suggestion that even after the President's antics, Boehner considered the possibility of offering higher revenues, should be taken as an indication of how serious the Speaker was in his desire to reach a deal. 

In the end though, it is pretty hard to deal with someone who doesn't accept fair and honest negotiation.

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