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Power Play 12/3/2012

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    Going nowhere fast on 'fiscal cliff,' 'cliff' jumpers delight and debt ceiling complicates 'cliff' talks.

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Bugs flabbergasted.

I like them as he can't be serious.

Put it I just never -- -- like it Dillon got several weeks between Election Day.

And the end of the year.

And and three of those wait weeks have been wasted though with though this month's -- -- you you've heard them.

For the first time I think in two decades now acknowledge that they're willing to have revenues grew up as part of balanced plan that's a good first step but they have to tell us.

What they're -- -- do rates and revenues that's going to be here are Republicans.

And that was house speaker John Boehner.

With -- your power play word of the day flabbergasted.

It's expressing his flabbergasted meant.

At the offer from President Obama calling from one point six trillion dollar.

Tax rate increase fifty billion dollars in stimulus spending.

To avert the fiscal cliff.

And that was Treasury Secretary Timothy Geithner.

Saying that it is well it is good that Republicans acknowledge that rich people should pay more taxes it matters very much.

How they -- -- not that's not enough.

That they pay more with close loopholes but that the -- have to rise and this is you -- very special brinksmanship addition.

A power play and and Chris tire wall.

And and when Washington went to bed on Saturday that belief was still pretty strongly.

That they fiscal cliff would not be jump to that this was a lot of bluff and bluster.

That in the end what would happen would be that there would come up with a deal so complicated.

An awful in many ways that it would defy easy definition and will allow the president in the house speaker to both claim victory.

And that we would muddle through to another thing.

But then on Sunday yesterday we heard the clearest most definitive statement yet.

That the president's not going anywhere until the Republicans admit defeat on tax rates.

It's kind of a semantic argument but it's the place that the president's chosen to hold -- -- so are we gonna go off the -- we'll talk about that.

If we -- go off the cliff what happens we'll talk about that too.

And we will also.

Talk about the -- -- -- we will talk about that lovely complicating little nugget.

That is out there too is that we're about out of borrowing authority for the administration.

And they would like the Republicans to give them some more of that too.

We will do all of that and we will begin.

Our task today but David Drucker he is of roll call.

He is quite excellent and I think the best reason for you to follow him at David Drucker.

On the -- twitters is this David does not ball down in the minutia.

Who back and forth and he is capable of doing something very few people in Washington journalism do.

Which is give -- perspective so that's what we need today for -- -- we need a little perspective obviously that I can do OK so the question is this.

The president has -- wrote it.

The discussion on this -- one -- before -- with the Republicans are like trying to add stuff into the discussion.

The president has been -- very clearly said no we're not gonna talk about any day.

Until you agree to a tax rate increase and it's not about how much money it's about that the rate actually has to go up for the top 2% of earners.

He can't climb down from that so are we now headed -- the -- Very possible -- and what I haven't figured out yet it is whether or not the parties involved.

Or one or the other of them really wants.

A deal meaning both sides kids but both sides -- or whether both parties are one of the other -- the other guy at a point.

And if we've got two people one person who wants the other side of blank we're going over the cliff and it's going to be a nice little slide and and and other markets react.

The wanted to keep in mind here Chris is that even successful.

Negotiations in Washington big game of brinksmanship and -- There's a rhythm to it -- starts out both sides and you know in their corner screaming at each other and we all think it's all over.

And then one day all of a sudden there's a deal -- him.

But of course the deals a blow off.

-- also begin the same way right -- and I think what we have to figure out -- the most what is happening at the staff level because there are.

Aides for each party in a room trying to do the math trying to figure out different things that might work.

And there's like two -- we should point out there's like two tiers of staff negotiation that goes out.

So you have like the principles of staff that get together here you're talking about somebody like Jack -- the chief of staff or -- chief of staff Mike Summers people write that.

That they can get in the room to let a -- bubble up but on the lower level you have back and forth about hey what about this what about that they're tossing stuff back and forth at each other.

Correct but -- Mentally it is about principles right they they will call the shots mean invaders -- he won't be able to call.

The only shot he wants he's gonna have to take it back to his members if for no other reason -- if he doesn't.

-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- So you the president to make any deal he wants in my view I think whatever the president wants.

The Democrats will go along with that includes Harry Reid that it Harry Reid and the majority Democrats in this.

Boehner he hasn't been waiting cut a deal but he still has to go back to his members.

And shopping around and any other thing I'd point out is that if you if you really want -- sort of look it.

Some of the different dynamics here is.

Are they look for deals simply to keep taxes from going off.

For some subset of Americans on January 1 or are they gonna trying to get a deal that includes other things.

Like entitlements and spending and the debt ceiling at all -- they gonna push that off in the next year which they can do.

Right anything well all but as you -- that you alluded to the markets.

These are there the concern.

That if you go over the class.

And people say you know what these guys can't if they couldn't -- deal then why we believe that they're going to be able to do a deal later.

That the pressure on the White House increases to not just on the Republicans but that -- becomes greater pressure on the president to get something done.

Well what I believe is that at some point there would be pressure on the president but that initially.

All the -- is going to be on the Republicans.

-- the president just has a bigger megaphone he's been able to sell his idea that his approach is it is fair balanced if you will.

And in the Republicans given that if it's a legislative body.

And speaker of the house never has as much of of a bully pulpit as the president.

Indeed are in a little bit of a quarter however.

I believe that over time.

Something like that that dynamic would change if we really went over the cliff if the markets reacted poorly.

If if we actually went into a double the perceptions recession at some point people would say look you're the president.

Lead and you know that but that but it's still a tricky proposition for Republicans I would say this about house Republicans.

Initially they've got.

Two choices and they're both bad right right the first choice is the president.

Gives them a deal they really can't refuse a lot of spending cuts and entitlement reform is -- -- you really gonna say no to a rate increase on the top murders that we want.

But they would probably do that and then there be a lot of screaming -- people will get primary end and there'd be more problems -- problems.

But but there's there's there's no worse option.

And there's there's a less bad option in a weird way so the president offers only what he's just offered you know -- flabbergasted.

There's no way Republicans can take that deal they can't.

So they go over the cliff but at least the party is unified you don't have any internal warfare -- really.

You just you know they have a period of time where the country thinks they're being intransigent.

Right but you don't have the internal problems and they're holding fast and unified in the end even though some of them.

Moderate Republicans that are left some of the pragmatist particularly in the senate are really worry you don't have the kind of but the potential for intra party warfare.

That you're gonna do if if the president gives them a deal they can't refuse which.

You know many people that would be good for the country the markets all that well that's not good for the country -- It was.

It was -- period for house Republicans and percent of Republicans where they have to explain to their base right why they relented on something that is so philosophically.

Ingrained you know Republicans are against these tax hikes.

This same way Democrats are committed to that.

An end by Democrats are in particular committed to understand is they finally feel after several years they have leverage to get -- in my opinion it may not signed a pledge.

But it's irrelevant they want to.

Just as bad a rather subdued David -- I notice -- no pockets so there is invest in the suit but rather subdued by -- for -- and standards to.

I would say from your fashion.

Well you know what happened it's really embarrassing.

It's slipped.

We all have an off today even.

-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- You have it it won't come in this -- printed out format but you can have it.

Digital you can evident pixels is by following the -- -- -- walk on Twitter -- which will enjoy for a host of reasons but chiefly that.

We're gonna take a quick break but when we come back.

We'll talk about this question about.

Well this like look like on the other side -- -- we will continue to explore this how serious would it be what's the big deal we'll talk about that when we come back.

-- -- -- I'm -- this if he did the president's plan and -- -- for this house and senate.

He would get very few votes for his plan.

That was South Carolina senator Lindsey Graham he's a Republican.

And he was on face the nation is.

CBS the Columbia broadcasting system and this power play welcome back.

From what senator Graham.

Who is a more moderate flavor of Republican.

Was suggesting was that the president's plan which calls for one point six trillion dollar tax increase over the next decade coupled with the short term stimulus spending package of fifty billion dollars still a lot of money I mean even in Washington so a lot of money.

Is not serious because it couldn't even pass the senate.

And eight under democratic control.

And what brand is positive is what an increasing number of folks in Washington -- -- the president actually would like to get beyond the fiscal cliff because if he did it.

Then he would have more leverage to get more of what he wanted you think that's true you should tell you should send -- look at that.

But people who will have a very well informed ideas about the subject.

Will be any lady she's president principles and strategies which is very good idea because she affected senior advisor to Harry Reid got quest to get stuff through the senate.

And Jim Pinkerton he has a good idea because he is -- stage of the -- he isn't contributing editor and writer at the American conservative magazine Andy Fox News contributor.

We need to get your title -- I got to Detroit brought an area called out a little bit I guess I had my middle name yeah.

I would bet you -- -- so -- that here's the question similar package to what the president has on offer did not do great in the -- -- did not.

Get there and there were a lot of Democrats who said.

No this is not good making a million dollars not 250.

There there was room for discussion but the plan is constituted was not popular especially given new spending that.

Do you think the president wants to go off the -- I don't James and I are gonna disagree on that I I don't we -- I don't think he wants to see eagle putt -- He was just elected he was elected overwhelmingly in my campaign on this exact same issue and so he knows he has the majority of Americans on his side.

If you just look at your recent polling that he just over bonds' supporters.

86%.

Believe that you should raise the taxes on top 2% so he -- think he's got this momentum behind him.

Because he has the politics right on it.

It's really put down the first -- this is not going to be the end as we -- know.

There's going to be a lot more negotiations it is going to be a lot more posturing on both sides.

I assume in between you.

Christmas in New York isn't all kinds of things I know all -- I loved being here watching this unfold in the president's -- get set for having to come back from Hawaii but.

You there's there's this was the first sound announcement -- the Republicans to show kind of weird they wanted to when it went what are their -- points that they need to hit and so.

They've been reluctant they have putting finger -- and presence on their hands and say look shall we -- -- Now -- -- Many on the left you get a deal.

And it keeps today.

And it is -- -- echoing louder and louder among the president's base jump the cliff.

All the taxes going to get what you want on the rich people and then -- -- the Republicans to have to bring that tax rates for middle income people.

And you have all the advantages and also the new thinking goes.

That because of controls that the president has it did that Tim Geithner has its Treasury Department.

-- the other agencies you can actually hold these things in advance you won't -- Wall Street.

-- be in better position it's like the doctor strangelove or how I stop worrying and learned to love the cliff.

You think he wants to go off.

I do and I told Betty that in the green -- and and I said -- -- -- men that say listen if if the president if that's the -- Republicans -- -- raise taxes out there and -- -- go to -- leftist Republicans agree.

I don't think the Republicans are are gonna make that mistake at least not in the end.

I -- I think that.

Furthermore I think in the meantime since.

The president is clearly gonna win this battle over.

Going over this booklet I think it's a mistake a bad mistake for the Republicans to sit around talking about cutting Medicare.

There's simply putting advertisements in the camp for the Democrats -- fourteen and saying see him every -- every Republican on what they do but what do they do well you don't talk about 'cause you can't implement a structure -- -- -- -- and I also think that you can if it's a subject -- health care program would look back.

Thursday's USA today.

-- -- -- -- -- -- Have created very Asia advanced -- and agonizing -- yes front page and I.

Killers super bugs in hospitals and nothing's -- that I submit that that's more important to more people.

Then Medicare and -- forty.

But I am so why wouldn't Republicans hold hearings immediately long before his small sectors really hasn't had as CDC -- -- -- -- -- -- how come.

Diseases running rampant as Katrina and welcome alzheimer's is going into the having -- that I would not be sitting ramblings are -- them out of we wanna cut Medicare its members that this past the Democrats have no intention of doing -- Question the president has narrowed in -- negotiating and gambit.

When you shrink the field and what president -- -- its initial -- to one point.

And it's really this vantage point it's not how much revenue comes in from top earners it's the circumstances under which that revenue is derived -- when you shrink the playing field.

It makes it kinda hard to climb down on that point later and do a deal doesn't.

And you should see a little bit I mean where they're -- -- -- -- -- -- the -- every -- all the -- -- 39 point five -- -- -- -- -- 36 -- -- CDC -- -- -- -- -- indicate that you would not necessarily -- data what that rate will be we just know that we want to increase and there's no way we will continue to extend.

The bush tax cuts on the top 2% so it's kind of in his you know that that's kind of where they're -- -- are likely going to be so they can satisfy their own -- the same time.

-- -- it -- you -- was speaker Boehner is in a really interesting position renowned.

Yeah -- nice way to say it even in deep -- dangerously close looking like Mitt Romney at the back in -- -- ironic that and you can get to the back of the plane you'll never coming back or Israel where you have that.

Then -- characters have hit.

Screaming like a little baby right before they send their daily news conference from them -- many years you know as he's going out there is saying you know complaining about the president this -- all he didn't consult me all he's he's he's put his -- has -- -- he has no plan.

He has not put forth any any paper -- to do was negotiate from -- so he's looking like it petulant child right now.

Kind of sit there saying oh don't raise my but I am a ten houses and I look back.

Impacted our it makes plain braver today -- that when when you know when mr.

secretary Geithner -- by the way when we suspended debt limit forever.

That was a unconstitutional power grab not unlike -- Doesn't those vote those -- -- there's an important packing plant which blew up.

Roosevelt's second term and give her problems that you -- in the 38 mid -- and I think it and -- gave him access.

Geithner and being gracious and very Boehner and house -- stopped me right in there so.

Mr.

sir are you telling us that you want to change the constitution and destroy the face grade -- for -- Cesar wrist phone.

Hardest power grab that yet this is yeah -- and yes.

Application -- that the and at that point you know -- their -- -- Andrews in the Mark Pryor are gonna appeal went with what we've taken we're not.

That it is in Washington limitless borrowing from that rolls up from the moment -- -- have to go -- end -- that is AS.

There there -- available here we go on the record in fourteen mid term saying I gave the Yankees going to keep.

City area.

To -- to people who know that Christmas is going to be treated this year by this process but we're glad to serve you for.

We gave you Jim Pinkerton and hopefully we thank you guys very much.

We take a quick break.

Because we have much more to do we have -- points for you we have that.

But also we have Mike Kelly one of your -- congressman from.

The Pittsburgh suburbs.

First and foremost user and his heart he'll be with us when we come back so stick around.

-- -- Congress is never gonna give up this power I've made a third of the president.

That every time we get to the debt -- Oh we need cuts and reforms that are greater than the increase in the -- -- It's the only way to leverage.

The political process to produce more change than what it would if left alone.

Silly -- that is white house speaker John Boehner called a request just discuss here.

To have -- limitless.

Borrowing limit for the federal government and to lay that aside.

And this is power play.

And I'm a big question big big question in all of this is that just after we get past this fiscal let's -- stuff.

Probably as it is the beginning of February the federal government which still -- about thirty cents of every dollar that it spends thirty or forty cents of every dollar it spends its going to be out of credit.

And getting that extended is that -- that the Republicans have Democrats -- -- -- take it away from.

Is it is it with us forever.

I tell you who probably knows Mike Kelly he is a Republican he is from Pennsylvania he's in fact from Butler county Pennsylvania to be specific.

And he is newly named to the house Ways and Means Committee congratulations congressman.

Thanks Chris and thank -- have me on appreciate -- of course in administrative action.

The best -- and so the question is this question is this.

How does let's start from the beginning.

Is there a chance of seeing the idea of debt limit increases.

Retired.

As a matter of congressional oversight.

No not in -- and can't be that way that our model of government is one that a lot of people on the world wish they had.

It is because there's limited powers they you don't want to change that balance the president wants a balanced approach I think there should be a balanced approach everything.

At doing that giving the executive -- the opportunity to raise debt limits that anytime they want to be level they want is very dangerous I mean even with us.

Sitting together trying to figure out how how for -- go to -- it was unfettered.

You where were already at a point right now we're raising the debt limit and -- -- because of deficit spending.

Spending more than you take in every year as for a long term -- -- now at some point.

You and I both know that there's gonna be little changed in the credit.

If people to start charging us more interest on the money we borrow from them and it gets the point where -- wondered -- is making interest payments you're never paying down the principal.

That's a disaster you couldn't do it in your private life he can't do it and went in our business I could never do this business is certainly the fact that you can do it.

In the in -- government is what's has led us to the situation where we're at right now we're spending way beyond our means and we have to have a really serious conversation about.

Getting in line get it done -- with the and your ability to make the payments standard that if we don't do something that's pro growth.

The -- -- -- become dynamic and robust.

The -- -- to -- the conversations -- just that it is just conversation doesn't fix the long term problem not me get to you did you do the Christmas season.

It may get you do -- election cycle but you know what it doesn't sit well for the country as we go forward and we gotta get this fixed long term.

How does this go for the deaths and how -- the debt ceiling.

Factor into the overall negotiation right now the president.

Is trying to limit the discussion to just the tax rate question either you and your fellow Republicans will exceed his wishes and and allow tax -- to go up.

Where he says there will be no deal on any larger issue but we know that as we get closer to the end that field is going to broaden out.

How do you see the debt ceiling coming into these negotiations.

Well that the debt ceiling is always to be part you know my entire life and before I came to congress to appoint some months ago -- was an automobile -- in the business of my dad started 1953 a little one car -- So my entire life has been based on the ability to sit down across the table.

And put a deal together and negotiate with the person personally got to the assumption is felt that the seller actually wants to -- Something and the fire actually wants to buy something and so if you can't get to that means they'll see the -- then.

Just becomes gamesmanship and and unfortunately that's what the public is seeing right now my job at the viewership Crist was to -- -- -- in the sniper sales rep.

Has -- new car and it's a court apparently that you like can you think you wanna own is that a correct statement goes again sure so -- -- than in the problem must be.

Maybe the put the payment is right for you -- the cars -- too much of -- we're not giving up free -- the person was a short solicitous OK let me see what can I do today.

To make it possible for you to drive out of here in the car with the country needs to hear right now from the -- -- the tape was what can we do today.

To get these problems settled now the president has to be the closer he has to be the person that comes in this is listen I know we've had this going back and forth.

We haven't arrived any solution let's get serious about this because I really -- to settle this deal and I'm assuming.

Mr.

speaker that you want to two and I think the speakers have right after the election listen let's go to the table it's a stylist put revenues on there and let's start the discussion there what I have thought.

Watching this.

The -- of Simpson Bowles plan was out there now what the -- for for Paul Ryan wasn't it didn't address entitlements which is really.

The main driver of those costs what we have -- look at those metrics are gorgeous even if we don't do something.

Those programs go broke on the road.

The other thing is if we're gonna do that -- we have to look at how do you raise revenues Heidi -- with the pro growth tax program how do you look at regulations that are hitting people.

Who who would have to treat these jobs and most -- the people I work with normal build business their -- and we owned small businesses.

These are people to work every day of the week to make sure -- successful make sure.

That their associates get paid.

So if you can catch -- too much and in -- -- much they walk away.

Congressman yeah pretty good at that Gloria but you can -- we thank instrument in time for us today fewer from the keys -- you know already.

I I -- Iraq might -- They have a great day thanks congressman thank you.

Okay Internet it's Monday so that means there's -- Charles sorry good news on the hunt with Jonathan Hunt the one and only eight.

Will be up next but before we get to that let's get to this about a few power points where you know.

Today's power points and happy together.

First PowerPoint.

Two years of this really until mid terms it's going to be like this brinksmanship every day up until the end back and forth.

No patriotic grace.

Do nothing can get down the easy way Christmas must be ruined.

Every position must be very hard.

Sounds like a bummer that we have to go all the way to mid terms like this is so why.

And here's why here's your second PowerPoint Harvard upperclassmen.

At Harvard at the Kennedy school of government at Harvard University had to get together they have every year at every four years at the presidential elections didn't get together and they talk about why they -- why they lost and it was the team Romney.

And team Obama.

And in talking to some people in the -- universe they said that -- the -- -- the high handedness.

From the Obama people told them that obviously the president isn't in the mood to compromise because he thinks that he has in fact changed.

Politics he won election like no other incumbent has won before tough.

Negative from the start.

Very expensive got it done anyway and so what their feeling is there routes they feel like they should have things the way that they want because -- won an election the way that nobody said they couldn't.

At the beginning.

And a possible but here's your third PowerPoint and remember this in politics it's for everybody check your altitude.

Check your altitude is the third PowerPoint because here's the deal in politics it's been said a million times it's an aphorism and it's a good one.

Which is this.

You're never as far up as you think you are in your numbers are down -- you think you aren't Republicans after the 2004 election with the reelected George W.

Bush.

Thought they would be a permanent majority.

For two years and then they weren't any more than they lost the house and then they had a very long wilderness period.

And you never far down as you -- you are the Republicans.

We're gnashing their teeth after the 2012.

After last month's election.

Probably not as bad as they -- So just check your altitude whether you're winning or you're losing you're probably a lot -- -- crowned and you think you really are.

So those are your PowerPoint for today you have our gratitude for joining us and we hope you -- -- consists -- 11:30 eastern tomorrow have a great day.

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