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The Point of an Insulting Offer

On “Special Report” last night, Charles Krauthammer explained why Republicans are right to reject Tim Geithner’s “fiscal cliff” offer (via NRO’s Eliana Johnson):

“This is almost unheard of. I mean, what do they expect? They obviously expect the Republicans will cave on everything. I think the Republicans ought to simply walk away. The president is the president, he’s the leader. They are demanding that Republicans explain all the cuts that they want to make. We had that movie a year and a half ago, where Paul Ryan presented the budget, a serious, real budget with real cuts. Obama was supposed to give a speech at which he would respond with a counter-offer. And what did he do? He gave a speech where he had Ryan sitting in the front row. He called the Ryan proposal un-American, insulted him, offered nothing, and ran on Mediscare in the next 18 months. And they expect Republicans are going to do this again?

Republicans are going to walk on this. And I think they have leverage. Yes, for congressional Democrats, it will help them in the future if Republicans absorb the blame, because we’re going to have a recession. But Obama’s not running again, unlike congressional Democrats. He’s going to have a recession, 9 percent unemployment, 2 million more unemployed, and a second-term that’s going to be a ruin. That is not a good proposition.”

The administration’s “offer” — $1.6 trillion in tax increases (twice as much as the GOP suggested it would accept) and another stimulus deal and Congress gives up its power to control the debt ceiling — is insulting. Either the administration wrongly thinks starting with a laughable offer is going to end in a fantastic final deal for them, or it doesn’t want to reach a deal at all.

If the former is true, then Obama really is clueless about how to negotiate. Presenting a ridiculous first offer — especially after Republicans indicated they were willing to compromise on tax revenues — is not the way to kick off the process. It is the way to insult the recipient, create an adversarial environment, advertise your lack of seriousness, and potentially shut down any hope of reaching a deal acceptable to both sides.

And that may be the point. Krauthammer is right that Obama is going to be faced with the fallout of going over the fiscal cliff during his last term. But maybe Obama doesn’t really care about the fallout. If his goal is to crush congressional Republicans and help Democrats win back the House in 2014 — which would allow him to push through more of his legislative agenda — then going off the cliff may be exactly what he wants to do.