How’ bout that, looks like I (Mr. Predicto) nailed a political process prediction, from yesterday’s post:
Tomorrow Boehner’s Plan B ($one million threshold) goes before the House. This measure is meeting strong objections from two conservative heavy hitters the Heritage Foundation and the Club of Growth.I will confess my political instincts are not especially astute (can’t think like a politician) but one really wonders what the masterplan is of this vote should Boehner fail to get any Democrat votes and lose 10% of his members. That would remove Boehner’s ability to compromise with Obama at all, making Obama best choice being the “cliff”. All this for a $35 billion (the difference between 500k, and a million threshold).
Personally I think the plan all along was to “avert the cliff”, and set up a new deadline, all without doing a damn thing with the Bush tax cuts or spending. Those will now be extended, the only questions are: until what date and the manner of the new fiscal cliff. This will be called the Orwellian term an “agreement” or “short term resolution.” Will the same set of cliff conditions be used for a new date? I think that is likely, and now that will be the only discussion between the parties before New Years. My SWAG is the new cliff date is set early, perhaps at the end of March. Since the debt ceiling leverage is not the key to this, I am guessing it is increased for two quarters (about $500 billion). The TAG program is dead given that it is Reid’s baby, as is the 2% payroll cut. Another than that it is start all over with the new Congress.
But first, Boehner will go to the Dems with a message that he will unlikely be back in January as Speaker, and that the Dems can deal with a hard (er) ass. He will bring a pad of paper and write how many GOP House votes are likely at various income tax thresholds, one million, $800k, 600K, 500k, etc, hand it to the Dems, and wish them luck. Of course all the numbers are conditioned upon spending cuts as outlined in the sequestration vote that passed Thursday, complications, complications. After being steam rolled, Obama has been trying to grow some testicles, which for him means “punt”.
Sometime in January the AAA credit rating of the US is cut and the permanent fiscal cliff theater starts all over again.