John Boehner’s Moment of Truth

By :: July 12th, 2011

In July 2000, under immense pressure from President Clinton, the Israeli government made Yasser Arafat a remarkable offer: It would recognize a Palestinian state that included Gaza, more than 90 percent of the West Bank, and a big chunk of Jerusalem.  But Arafat, who had worked all his life to create a Palestinian nation, walked away from the deal, unwilling to face down rejectionist elements of his own movement.

Today, House Speaker John Boehner (R-OH) is having his own Profiles in Courage moment. Congressional Republicans, through tenacity and discipline, have dragged President Obama far to the right. The White House seemed ready to give Republicans a long-term budget agreement they could only dream about when they won control of the House last fall. Not only would this fiscal plan mirror the GOP’s vision of smaller government, it would effectively force Democrats to abandon two of their most powerful political weapons--Medicare and Social Security.

All the GOP needed to do was declare victory and pop the bubbly. Yet Boehner lost his will, unwilling to face down rejectionist elements of his own party.     

Recall that Obama began debt limit negotiations by demanding a clean extension of federal borrowing authority with zero deficit reduction. He had ignored the recommendations of the chairs of his own deficit commission. And he had proposed a 2012 budget that would have added $3 trillion in red ink over the next decade.

Yet, by last week Obama had staked the full authority of his presidency on a plan that reportedly would have reduced the projected deficit by $4 trillion—with perhaps two-thirds coming from spending. He had agreed to significant cuts in Medicare and Medicaid and changes in Social Security. He had seemingly agreed to make permanent nearly all of the 2001 and 2003 tax cuts.  And while Obama was insisting on about $1 trillion in new revenues over a decade, most would come from reducing or eliminating tax preferences rather than raising rates.

In all, Obama’s offer was far more ambitious than what his fiscal commission chairs, Erskine Bowles and Alan Simpson, proposed. The president would have reduced the deficit by roughly as much as the House Republicans, whose plan Democrats had ridiculed as absurd just weeks before.

And for a few hours last weekend, Boehner seemed ready to take the deal. But, in the face of stiff criticism from his own caucus, Boehner now sits mute while the hard-core anti-tax faction of the GOP speaks for the party. House Majority Leader Eric Cantor (R-VA), who covets Boehner’s job, insists that not only must no new revenues be included in any fiscal agreement, there is, in fact, nothing to talk about as long as taxes are in the picture.  As one GOP freshman congressman told The Washington Post,   “Cantor’s just being very clear that we’re not going to get drawn into any negotiation.”

Heaven forbid that politicians should negotiate.

Boehner is in a tough spot. He has about 80 “young gun” House members who dream of the day the government loses its ability to borrow.  And he must represent the interests of GOP presidential candidates whose political fortunes might vastly improve if the Treasury defaults. Yet Boehner also seems to understand the catastrophic economic consequences if he fails to cut a deal.   

Of course, much of what we are hearing and seeing on both sides is theatrics. Still, within the next few weeks, Boehner must decide whether to try to sell a budget agreement that many fellow Republicans will consider a failure. And he may have to put his job on the line to do it.

It is worth noting that Arafat died just four years after rejecting Clinton’s plan, his capital in ruins. Israel elected a far more conservative government than it had in 2000, and chances for a solution to the Middle East mess are more distant than ever. You don’t need to be a fan of Arafat or his methods (and I am not) to learn a lesson from his failure of will: There is something to be said for taking yes for an answer.

7Comments

  1. Ralph H  ::  4:07 pm on July 12th, 2011:

    I believe John Boehner and Barack Obama are both very responsible individuals who will somehow work out a compromise. The problem is that they must get at least half of their respective representatives to sign on. As a result, we will not get the “best” solution, but will “hopefully” get a very good one. It will have to include no rate increases, but possibly some revenue enhancements by indexing change or removal of preference items. The closed room bargaining must have fewer people and be led by the two golfing partners. The ultra partisans (Pelosi and Cantor) must be silenced.

  2. Steven Woolf  ::  5:18 pm on July 12th, 2011:

    Arafat “never missed an opportunity to miss an opportunity.” One can only hope that the debt ceiling negotiators don’t follow that course.

  3. Michael Bindner  ::  6:35 pm on July 12th, 2011:

    Obama may or may not have gotten Pelosi to go along with him, so in the end it was likely not an honest offer. I suspect a deal starting in the Senate that Pelosi and Obama District Republicans will vote for, rolling the Tea Party again. Boehner may yet keep his seat if he agrees to a vote to avert the “constitutional option.” The Arafat analogy is delicious.

  4. AMTbuff  ::  8:32 pm on July 12th, 2011:

    At http://keithhennessey.com/2011/07/12/left-of-bowles-simpson/ Keith Hennessey has an excellent new post refuting the premise of this article and showing that the disagreement is over long-term spending, not taxes:

    President Obama has been unwilling to make any of these [Bowles-Simpson] changes, and yet suggests Republicans are being unreasonable for not agreeing to net tax increases. The President refuses to discuss changes to the trillion dollar new health entitlement he and Congress created last year. He refuses to discuss changes to Social Security beyond a CPI correction. He insists that top tax rates go up. He attacked Paul Ryan for his long-term Medicare reform and refuses to consider it.

    At least as important, Bowles & Simpson offered a long-term fiscal solution in exchange for this net tax increase, under which spending would never have exceeded 22% of GDP and deficits would have quickly dropped below 2% of GDP and eventually reached balance. That’s too much spending (and too high taxes) for my taste, but it’s qualitatively different from and far superior to the President’s proposal, which is to trade permanent tax increases for only a temporary slowdown in government spending growth and budget deficits.

    I agree with Hennessey that the lack of a long-term solution is the deal-breaker. I’d go for almost any deal that guarantees balance in the long run, since that’s what the bond market needs to see. We’ve had more than enough temporary patches. It makes no sense to use our remaining revenue slack without getting permanent balance in return.

    I will repeat myself for emphasis, since this is the central point that progressives continually disregard:

    It makes no sense to use our remaining revenue slack without getting permanent balance in return.

    Permanent balance. That’s the key that will open the door to a tax increase.

  5. Brinkmanship! | Daily Forex Stock, Market News and Analysis  ::  3:51 am on July 13th, 2011:

    […] This post, created in “thriller style” has a good “prologue” and is value reading in full: In Jul 2000, underneath measureless vigour from President Clinton, a Israeli supervision done Yasser Arafat a conspicuous offer: It would commend a Palestinian state that enclosed Gaza, more than 90 percent of a West Bank, and a large cube of Jerusalem.  But Arafat, who had worked all his life to emanate a Palestinian nation, walked divided from a deal, reluctant to face down rejectionist elements of his possess movement. […]

  6. Alejandro  ::  3:17 pm on July 13th, 2011:

    Thanks for the piece. I disagree with the opening example, however.

    Arafat had international law on his side. Israel illegally holds claim to the West Bank and Jerusalem. They were not part of the 1948 borders. You can’t steal something, offer back most of it and then artfully express outrage that the rightful owner isn’t accepting your offer.

    Yes, Arafat and Boehner both accommodated the most intransigent wings of their parties, but the former did so because to have done otherwise would have been to implicitly and incorrectly acknowledge Israel’s right to the territories in question. Arafat’s inflexible allies, in this example, took a righteous and lawful stance. Boehner’s “young guns” simply don’t like paying taxes.

  7. AMTbuff  ::  12:27 pm on July 14th, 2011:

    Howard or any other page administrator: I have a link-containing post awaiting moderation for over 36 hours now. Please approve it.