Compromise, why start now?

Patricio Navia

Buenos Aires Herald, December 4, 2012


Though there are only four weeks before the deadline for the fiscal cliff, the mood for compromise in Washington remains weak.  Democrats and Republicans are making demands rather than signaling their willingness to make concessions. The White House has adopted a harsh position by putting on the table a proposal that looks very similar to the original budget proposed by President Obama.  Though most observers believe that a deal will be reached, the fact that no major compromise has been brokered in 2012 between the White House and the Republican-controlled House of Representatives makes it possible that the negotiations to avert the fiscal cliff will only be completed days before December 31st.


Almost a month after he won re-election, President Obama seems more concerned with securing support in the Senate for his likely cabinet nominees than with negotiating with Republicans a deal to avert the fiscal cliff. The controversy over what U.S. ambassador to the UN Susan Rice told Congress about the Benghazi attack in Libya that left the U.S. ambassador and three other Americans dead has consumed Senate debates.  Many Republicans are determined to block the likely nomination of Rice as Secretary of State.  Since Hillary Clinton will step down shortly after Obama is inaugurated for his second term, the appointment of Rice will be one of the first tests for Obama in the Democratic-controlled Senate. Many Republicans would prefer to see Massachusetts Senator and former Democratic Presidential candidate John Kerry appointed as Secretary of State.  Because Kerry gets along with the Senate better than Rice—and Republicans expect that their party can pick Kerry’s seat in a special election—they are in an active campaign to block Rice’s nomination.


In addition to Hillary Clinton, other key cabinet positions will need to be filled.  Secretary of the Treasury Timothy Geithner is among those who might also leave, though he will probably stay on for a few months after a compromise on the fiscal deficit is reached. A new director of the CIA also needs to be appointed.  Obama understandably seems concerned with putting together a strong cabinet, with people he can trust and work with. After all, now that he will no longer worry about future elections, Obama wants to concentrate on building a legacy that goes beyond being the first African American president in the history of the U.S.


The White House has not fully ignored the upcoming fiscal cliff deadline. Secretary Geithner has already offered a proposal to Republican leaders that includes immediate revenue increases and gradual spending cuts. The proposal was swiftly rejected by Republicans as not being sufficiently serious. Because the White House offered immediate revenue increases and gradual spending cuts, Republicans cried foul and vowed to offer their own counterproposal.  Still, President Obama took the proposal and brought to it the American public in a series of campaign-like rallies and events.  As if he were more interested in condemning the Republicans’ unwillingness to accept tax increases on the wealthiest Americans than in finding common ground with the opposition party, Obama has spent more time selling his budget proposal to the American public than in bargaining with Republicans in Congress.  The effect of Obama’s strategy has not paid off.  President Obama’s approval has declined to 51%, down from 54% when he won re-election.  Americans want a President who can broker compromise rather than a president will is in a permanent campaign mood.


Republicans responded yesterday with a proposal of their own.  It offered US$ 800 billion in unspecified revenue increases and asked for 600 billion in discretionary and non-discretionary spending. In addition, it offers a plan to save US$600 billion in health care savings and in changes to the way inflation-adjusted salaries and pensions are calculated.  Democrats immediately criticized the offer as being too vague and as asking for too much spending cuts and not offering sufficient revenue increases.   Still, Republicans are now claiming that it is President Obama's turn to offer a counterproposal to move forward with the negotiations.


The Obama proposal and the counterproposal offered by Republicans represent offer little change from their initial budgetary positions. A lot more concessions will need to be made before a deal is reached. However, given the way that Democrats and Republicans are behaving in Congress, there seems to be no urgency to compromise.  The expectations that a grand bargaining would be reached before the end of the year is no longer dominant in Washington.  Instead, many believe that a very specific compromise will be reached with significant aspects of the required negotiations being kicked forward for next year.  The budget cliff will be averted, but no long term credible and stable solution to the fiscal deficit will be reached.  


On November 6, President Obama won re-election, Democrats stayed in control of the Senate and Republicans retained control of the House.  The results confirmed that uncompromising positions were not punished by voters. Thus, after they showed no willingness to compromise throughout 2012, Republicans and Democrats see no reason why they would need to compromise now.