PLANK DECEMBER 26, 2012
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Howard Schultz is frustrated. So am I. But Schultz is frustrated that the two parties can’t come to an agreement about fiscal policy. I’m frustrated that Schultz still thinks the two parties are equally to blame for the impasse. And I’m frustrated that Schultz isn’t the only one who thinks that way.
Schultz, as you may know, is the CEO of Starbucks Coffee. He appears to be one of the good guys in corporate America and he treats his employees well, by, among other things, providing even part-timers with health insurance. But he's become obsessed with bipartisanship and the need for more of it. His latest effort in the campaign came on Wednesday, when he instructed baristas all over Washington to write the phrase “come together” on every cup of coffee they sold. He wasn’t thinking about the Beatles song.
It’s the same claim you keep hearing on talk shows—that the parties need to get past their supposedly petty differences and govern responsibly. And if you have read my colleague Noam Scheiber’s piece on Maya MacGuineas, who has been making this argument as long as anybody, you know why it is so misguided. One party, the Democrats, is already acting responsibly. And one party, the Republicans, is not.
In the last few weeks, President Obama has offered major concessions, agreeing provisionally to reductions in Social Security benefits in exchange for tax increases on investments along with more financial support for poor and middle-class families. Either that deal or a more narrowly tailored one, one that addressed only the automatic spending cuts and tax increases that neither party likes, could probably pass Congress tomorrow—if only House Speaker John Boehner was willing to pick up the phone and get help from Minority Leader Nancy Pelosi, who could almost surely supply enough Democratic votes to get such a bill through the House.
Boehner won’t do that, because tax rates on upper incomes would increase under such a deal. A small portion of Boehner’s caucus still hasn’t come to terms with the fact that President Obama campaigned, and won re-election, on a promise not to renew expiring tax cuts for the wealthy. If Boehner defied that group and passed a bill with substantial Democratic support, he might lose Republican votes on January 3, when he makes his bid to remain at speaker. To be speaker, you need votes from a majority of all members, not just a majority of your caucus; if Boehner lost the votes of just two dozen House Republicans, he’d lose his bid. I can’t see into Boehner’s mind, obviously, but it would appear he’s unwilling to take that risk.
Nobody in Washington seems to think that’s the least bit strange. But sometimes leadership means pushing your supporters to do something they might not like, because you believe it’s in the country’s best interests. And sometimes leadership means putting your own political fortunes in jeopardy, because doing so is the only way to take action. All politicians act out of self-interest. But the best ones take chances, and act boldly, at least once in a while. Just ask Pelosi, who dutifully rounded up Democratic votes for President Bush’s financial industry rescue in late 2008. Or ask Obama, who stuck with health care reform even when his members of his own party were advising him to back off.
If you want yet another window into the two parties—and their relative willingness to make concessions—think about the way each one has come to terms with the original Bush tax cuts, whose imminent expiration has helped forced this debate upon Washington. Back in 2001, Bush and most of his Republican allies wanted to enact a permanent, across-the-board income tax cut. Most Democrats opposed the proposal, because they believed it would skew benefits towards the wealthy and impose too great a fiscal burden. Bush eventually got his way, for the most part: He got a really big tax cut. But Bush and his allies did make one key concession: They agreed that, after ten years, tax rates would return to their previous levels. It was a way of accommodating those lawmakers reluctant to impose such huge costs on the federal treasury indefinitely.
The Bush tax cuts, in other words, were more than the Democrats wanted but less than the Republicans wanted. And today the Democrats are acting that way. As Zachary Goldfarb noted in the Washington Post on Wednesday, Democrats do not (to my chagrin!) call for allowing all of the tax cuts to lapse. Instead, they call for allowing only those on upper incomes to lapse. For better or worse, they have learned to live with the Bush tax cuts, or at least some portion of them, as part of the fiscal landscape. Republicans have made no similar concession to reality. They want to extend all of the Bush tax cuts and they want to extend them forever. They want to get more than Bush ever could, even though they have less political leverage than he did.
Washington doesn’t need two parties that can "come together." It needs one party to "get it together." Maybe Schultz should put that on a coffee cup.
19 comments
Brilliant piece. More Cohn!
- chaitless
December 26, 2012 at 11:37pm
Except when it comes to millions of consumers who gotta have a $4 cup of coffee as part of conspicuous consumption, Howard Schultz is dumber than dirt. He sold the Sonics to somebody he thought was an Oklahoma yahoo, who promised to keep the team in Seattle. Of course, they were moved out of town as fast as the yahoo could rent trucks, and Schultz was left with latte foam on his face. He is not qualified to do anything but sell designer coffee to suckers. When it comes to politics, he obviously doesn't know his ass from a hole in the ground. One of the reasons for his "come together" slogan is to prevent his sales from falling off while we slide down the fiscal slope. But he's not perceptive enough to know who's pushing us down the hill. By making it appear that both political parties are equally at fault, he's only making it worse for his business and America in the long run. Fortunately, a lot of business people know that the Republicans are mostly at fault for our economic downslide since 2000. But, if CEO's ever stand up as a group and declare that in public, Schultz won't be among them. He's not quite bright enough. I agree with chaitless. This is a finely written piece.
- magboy47.
December 27, 2012 at 1:42am
Hey. Nothing wrong with Starbucks coffee, it's the only stuff out there black enough for me (and it doesn't cost anywhere near $4/cup!) Meanwhile though, this business in Washington is getting scary. The GOP is not acting rational. Worse they're about to victimize poor and middle class people, and are demanding even more radical attacks on our welfare, on women, on unions, on environment, the weather service, on and on, and - they lost the darn election. We're trying to fight our way out of the Bush catastrophe, and decades of voodoo economics, and these guys are getting more and more radical and destructive. They don't even seem to get the basic idea of a democratic state.
- Sophia
December 27, 2012 at 2:05am
The GOPers in US House are in an obvious insurrection, playing drama queens to get their way on everything all the time. I too am sickened by the continual false equivalency by so called journalists, falsely claiming the quagmire is due to demands of the far left, the militant left, yadada, without ever naming a single member of this sect or any of its positions. But these fake journalists, NYT's Douthat and Pablum Brooks stands out for me, have positioned themselves as centrists, so they must create an illusion that there is an extreme left position without leaving themselves open to fact checkers. Pure little adolescent boy drama by the rigid, fascist extreme right, and I hope our Chief Executive grabs the reigns on the debt limit and raises it by fiat, based on his Constitutional requirement to pay the US's account receivables, like 53-54% of us elected him to do. Put Boner and McScrooge in the same cell for the same charge of insurrection and let them teabag each other instead of us.
- smabry03
December 27, 2012 at 6:11am
Actually, the Bush tax cuts included a sunset provision in order to make the fiscal consequences seem less dire (deficits forever!), not to accommodate Democrats and get enough of their votes; accommodating Democrats (i.e., accommodating to wealthy campaign donors) are a fixture in Congress. Cohn would have to go back a little further in history, back to the source of Democrats' cowardice about being labeled the party of tax increases, when the accommodating Democrats (there they are again) voted in favor of the largest working American tax increase in history, turning many ordinary working Americans into tax protesters and Republicans. The stakes today are similar to those back then, even if nobody is willing to mention it, not even Cohn. And what are the stakes? More tax increases, tax increases above and beyond the modest upper income tax increases Republicans are having hissy fits about today. The ink won't be dry on whatever modest income tax increase on the wealthy is agreed to by the Republicans and accommodating Democrats when, surprise, the fiscal scolds will be warning of impending bankruptcy of social security and Medicare without another whopping increase in the regressive payroll tax. For those not paying attention, the social security "trust fund" doesn't exist, all $2.7 trillion (that's trillion) having been spent to offset the Bush income tax cuts mostly benefiting the wealthy; even Obama's proposed income tax increase on the wealthy does not come close to raising enough revenues to restore the "trust fund". An aging population and a "trust fund" that is neither (no trust, no fund) means another whopping increase in the regressive payroll tax, once again agreed to by the Republicans, who are addicted to the payroll tax, and the dependable (that's not a compliment) accommodating Democrats. Anyway, that's my new year's prediction.
- rayward
December 27, 2012 at 7:35am
two things: To be speaker, you need votes from a majority of all members, not just a majority of your caucus I don't know why Democrats can't do a back room deal that if a bunch of Republicans vote no on Boehner a bunch of Democrats would then step in and vote for Boehner as a price for him scheduling the vote. And second, the reason why the ten year limit was done was because of the Byrd rule which prevents increases in the deficits, if Bush had proposed spending cuts (and passed them) of equal measure then he would not have had to do so, beyond that the CBO would not buy into his dynamic scoring (the cuts would not only pay for themselves, they would be produce an even bigger surplus thus spake Heritage)
- blackton
December 27, 2012 at 11:57am
i certainly agree with this cogent post. and as i nurse my "senior coffee" at McD's, I can only hope Starbuck's "dear leader" will accept the friendly chiding involved....
- cdmcl3
December 27, 2012 at 12:02pm
"But Bush and his allies did make one key concession: They agreed that, after ten years, tax rates would return to their previous levels." I was under the impression that the sunset provisions were the result of the "Byrd Rule," which says that budget reconciliation cannot be use if the contemplated law creates significiant deficits out farther than 10 years. The 2000 Republicans did not have a filibuster proof majority and had to use budget reconciliation to enact the cuts, triggering the Byrd Rule. Am I wrong about this?
- Nusholtz
December 27, 2012 at 1:11pm
I see now that Blackton raised the same question about the Byrd Rule.
- Nusholtz
December 27, 2012 at 2:02pm
How about not making one's daily cup of coffee (tall, pike place blend, no room for cream b/c there's always room for cream) a friggin political act.
- Lymon1
December 27, 2012 at 2:32pm
But yet, people are blaming the impending tax hikes on - the Democrats. Will somebody please give us a break. The cuts should never have been initiated in the first place, especially in view of the wars. OR they should have been for lower income people only. I don't get Republicans at all. They create a situation guaranteed to raise the deficit, depress the economy, increase inequality, then scream bloody murder at the remedies and refuse to do anything at all - and - launch attacks on the less fortunate and seniors and sick people and the working poor and the unemployed too? What is going on out there.
- Sophia
December 27, 2012 at 3:19pm
Sophia, I thought the generally accepted state of opinion is that the majority of Americans blame the Republicans in the House for the current impasse (obviously not quite identical to what the pundits say). Has this changed?
- ironyroad
December 27, 2012 at 5:38pm
Gibbs Rule 13: "Never, ever involve lawyers." especially when it comes to balancing budgets. Goodbye.
- K2K
December 27, 2012 at 8:27pm
John Boehner is the only person involved NOT playing politics with the full faith and credit of the United States.
- K2K
December 27, 2012 at 10:21pm
Boehner is also the person whose caucus indicated -- in a notably dismissive way -- that it would not support him on a proposed bargain with the White House in which the president had moved a considerable distance from the position that he campaigned on two months ago. I struggle to find the correct description but is "public humiliation" a reasonable way of putting it? I don't blame Boehner for that, obviously, but I do blame him for negotiating as if he were in charge of something when he isn't.
- ironyroad
December 27, 2012 at 11:36pm
John Boehner has been the politician who would be happy to endanger the full faith and credit of the United States to get his way because Democrats will not.
- Nusholtz
December 28, 2012 at 6:28am
I confess. I repeat myself. Divide the United States into two countries, one red and one blue. India and Pakistan can provide assistance with the population shuffling. (Look how well that worked out on their sub-continent!) There are a few sane Republicans. We can evaluate their request for political asylum on a case by case basis. As the Texans and the like become really desperate, they can unite with Iran or some equally enlightened state.
- skahn
December 28, 2012 at 8:51am
And perhaps it's as simple as Schultz recognizes that Republican voters also drink Starbucks, stereotypes notwithstanding. I can't see any of my GOP friends switching immediately to say Dunkin were Schultz to challenge their preconceived ideas by telling them they were wrong and it's actually not all Obama's fault on their coffee. Nope. Altenatively this could be a window into why business leaders offer struggle in actual politics. Most successful business people can take a "it's just business" view of things, even as they carve up something someone else built, or as they loose a contract and go looking elsewhere. One gets the impression that a number of GOP members of the house take things very personally, more as a life or death sort of thing. Which it can be, although I disagree with the things they think are life and death.
- Nari224
December 28, 2012 at 8:53am
Nari, good point. It's noticeable that many (but not all, obviously) CEOs struggle in politics because they view the country primarily as an enterprise to be managed. Some aspects of government are parallel to the world of business and commerce: nevertheless, you can't downsize your citizenry the way you can your workforce in order to increase profitability. It makes me wonder if that's another implication of Romney's disastrous 47% remark -- he was bemoaning the fact that you can't just shed all those you regard as a burden on USA Inc.
- ironyroad
December 28, 2012 at 1:39pm