Tread on me. Why Democrats won’t benefit from a budget deal.

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Now, you know that there are reports all over Washington that the Democrats and Republicans are close to a deal on the budget. The figure that they‘re talking about is $33 billion extra in spending cuts.

Late yesterday, Vice President Biden seemed to confirm that this was, in fact, the case.

Now, I want to make the argument to you tonight that that is a huge loss for the Democratic Party. But you know, of course, for the Tea Party, it‘s never enough. They were upset. They had a gathering today. People say it was a big gathering. It numbered in the hundreds. They‘ve had much, much larger gatherings than that today (ph), of course. And it appears that they‘re going to get a lot of what they wanted, but of course, they said it‘s not good enough anyway.

We‘re going to come back to them in a little bit. But also there‘s this idea in Washington that—and it‘s really conventional wisdom—the president is going to win if it‘s a negotiated compromise. Hey, he got a deal.

To me, that doesn‘t mean much. Anybody can get a deal. Like, if you wanted a deal, you could have just said, All right, I‘ll give you $61 billion, in which case, by the way, they would have moved it, and then he would have given them that. The question is, What‘s in the deal? That‘s why I think the conventional wisdom is wrong.

Look, I wish it weren‘t so, but I got to be honest with you, I don‘t think the Democrats won on this at all. And let me show you why. Look, remember, the Republicans originally wanted $800 billion in tax cuts, and in December, they got $800 billion in tax cuts. That‘s a big fat check. They got it. They got exactly what they wanted.

Then at the beginning of February, they said that they wanted $32 billion in spending cuts. And guess what happened? Now they got $33 billion in spending cuts, if this deal is accurate. That‘s a billion dollars more than they originally asked for. That‘s another big fat check. So when it came to taxes, they got exactly what they wanted. When it came to spending, they got exactly what they wanted.

Now, later, because of the pressure from the Tea Party, the GOP moved their number and said they wanted $61 billion in cuts. But in reality, when all of this started, their real ask was for $32 billion. So it looks like they‘re going to get more than they could have imagined at the beginning of this process.

So in the midst of the Tea Party bellyaching, the reality is, it‘s mission accomplished for the Republicans. They got all the tax cuts, they got all the spending cuts they wanted, and then some.

So look, you got to understand something. Am I rooting for the president? I thought he was a better candidate than McCain. I made that very clear before the elections. So of course, I want him to succeed.

I desperately want him to succeed! So am I happy telling you, Hey, you know what? I don‘t think he did in this case. I think it was a loss.

And look, let me ask you. Well, what do you think? I mean, when you look at those numbers—don‘t worry about what I think. Who cares what I think. What do you think? I mean, when you look that, don‘t you go, Oh, my God, they‘re giving them a billion more than they originally asked for?

Why do we constantly give in? It‘s a source of frustration for all of us! And there‘s got to be an answer to it, and so far, I haven‘t seen it. It‘s—and you know, the thing is, a lot of people are saying, Oh, Tea Party‘s crazy, radical, et cetera. And look, we‘re going to talk to somebody from the Tea Party later. And I think they‘re radical in a lot of ways and they won‘t negotiate. But the sad thing is that their strategy kind of worked. They wanted to push the country to the right, and so they made more and more demands. And then you know what happened? The Democrats went along with those demands.

Whatever they ask for, we go a little more than halfway. So when they asked for more, we went more and we gave them more spending cuts.

Those are not progressive values. I wish we had a win tonight, but I don‘t think we do. And my job is to show you the numbers, show you the reality, let you make your own decision on it.

All right, now I want to bring in a guest right now. And it‘s, of course, former Pennsylvania governor and NBC News political analyst Ed Rendell. Governor, look, am I seeing it wrong? Let me—I‘m asking the audience. I want to ask you, too. I mean, when you look at those numbers, if I‘m a Republican, I‘m snickering while nobody‘s looking, going, I can‘t believe I got a billion more than I originally asked for!


Well, let me start off by saying, Cenk, that I care what you think. And I think you‘ve been doing a good job on this issue.

You‘re absolutely right about all this, but the thing that‘s so tragic about this is we‘re playing on the wrong ballfield. Look, all of us understand that the federal deficit has to come down. At the same time, the president‘s absolutely right, we‘ve got to invest in the things that are important to the growth of the country and keeping the country competitive.

But we‘re cutting right now from discretionary spending. And discretionary spending‘s less than one eighth of the budget. The big items, the things that we should be looking at—the military budget, the long-term entitlements—and I know that‘s hard for some of our folks to hear, but that‘s where the money is—we‘ve got to start looking at those things. We shouldn‘t take it out on the discretionary social spending.

And there are things that are outrageous. I mean, we give the oil companies almost $4 billion in tax subsidies a year in the budget, and yet we cut out LIHEAP, which is Low Income Heating Assistance, mostly to older people, $2.5 billion. Well, we could save LIHEAP, keep it intact, by just taking away 60 percent of the subsidies we give the oil companies. The oil companies are doing well. They don‘t need the subsidies.

We‘re all out of whack, but we‘re fighting in the wrong playing field. This is all like an argument about who receives the ball first. The game hasn‘t even started. The game is next year‘s budget.

UYGUR: Well, look, I know this. We seem to have lost this game that‘s at hand…

RENDELL: We have lost this game. I agree.

UYGUR: All right. So governor Rendell, I mean, that‘s the thing. You know, you agree with that. You know, Congressman McDermott comes on last night. Congresswoman Kaptur comes on. Everybody agrees, like, we‘re on the wrong—Bernie Sanders—we‘re on the wrong battlefield. We‘re playing the wrong games. We‘re losing these games, et cetera. But we have the White House and we have the Senate, so why are we losing? I mean, isn‘t it a frame of mind? Isn‘t it a constant, like, All right, I‘m going to give in and those—like, doesn‘t it seem like that‘s real fundamental problem is we have the wrong strategy?

RENDELL: Well, and it traces back, in my judgment—and you‘ve heard me say this on your show before, Cenk—it traces back to the way we campaigned in the 2010 election. We campaigned like scared rabbits. We didn‘t fight and say, Look, there is a role for investment, there is a role for the safety net. Good Lord, ladies and gentlemen of America, do you want these programs cut, or do you want millionaires not to receive a continued tax break?

You know, it‘s interesting. The public was all in favor of cuts until they saw what the cuts were. I told you I think last week, there‘s a poll in Pennsylvania that says 98 percent of the people don‘t want education cut to balance the budget. Well, good Lord, 98 percent of—that‘s just in Pennsylvania — 98 percent of Pennsylvanians can‘t agree today is Thursday, and that‘s a staggering number.

UYGUR: Right. But I—you know, I hear you on all that and you‘re right about all that, but…

RENDELL: Where were we last fall? Where were we last fall?

UYGUR: So what‘s the problem? That‘s what I‘m trying to drill down to, right, because everybody that comes on this program seems to agree that we should fight harder. We should fight for progressive values.

RENDELL: Well, here‘s the problem…

UYGUR: But we never seem to do it! So I mean, what goes wrong? What is it in Washington that the Republicans always have the framing, and we accept their framing and give up instantly?

RENDELL: Because Republicans are willing to stand their ground for things that they believe in, even when those things might be unpopular. I mean, you see it in Wisconsin. You see it in Ohio. Polls not—you know, polls began (ph). They continued to go forward on ending collective bargaining rights, even though the people of Wisconsin and people of Ohio don‘t want to do it.

They seem to have a lot more courage of their convictions than we do. We seem to tend to cut and run as soon as there‘s the slightest bit of trouble instead of talking about our values. And our values are the right values.

And then there‘s a second problem. The president like the governor, like the mayor in cities and states, is the adult in the room, and they do have the responsibility of making government work. They do.

When I was governor, I felt it was my responsibility to put it all together. And so you‘re in a position where you do want to—not make deals, but you do want to keep things going and going forward.

UYGUR: No, no, no. But here‘s the thing, Governor. Look, I‘m going to press you on this more because we—we always talk generally, like, Hey, Democrats are doing the wrong thing, Washington‘s doing the wrong thing. But there‘s individuals behind this. And I know the executive has to make tough decisions, and nobody on our side is saying, Don‘t make a deal. Of course you got to make a deal at some point. The question is…

RENDELL: Make the right deal.

UYGUR: Make the right deal. And it seems like we never make the right deal because, honestly, the president is always willing to negotiate and he never draws the line. I mean, shouldn‘t he call their bluff at some point? Shouldn‘t he say…

RENDELL: He should call their bluff…

UYGUR: … I‘m going to stand here and I‘m not going to constantly give in to you guys?

RENDELL: And the way to do it is to take the items that have the most emotional appeal, like low income heating assistance, like—the Republicans want to cut the mortgage assistance program right now in America? Come again? You want to cut the mortgage assistance programs, and you‘re giving the oil companies $4 billion in tax breaks? No way!

So the president should say, Guys, I‘m willing to negotiate on this, but there are some things that are so important to the social fabric of this country, some things so important to American families that are in trouble, they‘re off-limits. They‘re off-limits.

UYGUR: Right. Unfortunately, Governor, you know low income heating assistance—that‘s the first thing President Obama gave up, even without the Republicans really asking for it.

RENDELL: And it‘s crazy because that‘s something that there‘s—Americans understand. They understand. They don‘t want anybody to go without heat during the winter. Americans understand that. Just like Pennsylvanians understand that we shouldn‘t be cutting education funding.

UYGUR: Right.

RENDELL: They understand it. So we should fight—we should take a few things and fight and draw the line there and say, That‘s not the America that we want. We‘re not going to see Exxon get tax cuts and older people not get heating assistance.

UYGUR: Right. Well, again, we agree. I hope somebody in Washington is listening.

RENDELL: Well, I think there—I think there are people that are going that way. And Cenk, I think the big battle is going to be next year‘s budget because that‘s going to set the tone…

UYGUR: I always hear next year, though. I always hear next year.

RENDELL: Well, you‘re right. You‘re right to be frustrated.

UYGUR: You know? And I hear they‘re going there and I never see them get there. That‘s my problem.

RENDELL: You‘re right to be frustrated.

UYGUR: Right.

RENDELL: We‘ve got to draw the line and fight for the things that are the things we believe in and the things the public believes in.

UYGUR: Right.

RENDELL: That‘s the thing that gets me. We didn‘t fight against the tax cuts for the top 2 percent when the polls showed 65 percent of Americans, including a lot of Republicans, thought that they should—those tax cuts should expire.

UYGUR: Absolutely.

Governor Ed Rendell, thank you for your time tonight. We really appreciate it.

RENDELL: It was fun.

UYGUR: All right. Now, with me is Bill Press. He‘s the host of “The Bill Press Show” on Sirius radio. You know, Bill and I spoke about a month ago on the same issue, and I said that President Obama and the Democrats would give away a lot more to the Republicans. Now (INAUDIBLE) a little bit. I‘m sorry, Bill, but I‘m calling you out on this a little bit.

BILL PRESS, RADIO SHOW HOST: That‘s fair. That‘s fair.


UYGUR: All right. Now, at the time, I want everybody to remember, the president giving an initial $40 billion in cuts from his 2011 budget proposal. And then he gave another $10 billion in cuts during the continuing resolutions. So he‘d given about $50 billion in cuts already. And our discussion that Bill and I had was whether he would give in more.

Now, let me show you a little bit of tape on that. Let‘s watch.

PRESS: All right.


UYGUR: He‘s already given away half. You agree with that. Half is out the door. They haven‘t really started negotiations. The Republicans haven‘t given him anything. Right?

PRESS: Right.

UYGUR: So he‘s got to go at least another half. That‘s what‘s going to happen. I mean, you tell me if it‘s not. Are they really going to stand their ground at $50 billion. They‘re not going to, right? They‘re going to give away another 25 percent, 30 percent, 40 percent, right? So then what are we left with?

PRESS: No. No. I don‘t think they are. I think they‘re there and I think they‘ve got the ammunition now to say, We can‘t go beyond this because you‘re going to shut everything down.


UYGUR: All right, Bill, you know, I feel like a bit of a jerk pointing that out, but was I right there?

PRESS: Well, first of all, I have to say, you know, the cruelest thing you can do to any of us, right, is to play a tape of something we said…


PRESS: … three weeks ago because you know, in this town—look, Cenk, I believed what I said then. And I do think that they have gone too far. But I do have to caution you about one thing. I think it‘s important to point out. There ain‘t no deal yet. I mean, they‘ve said $33 billion. Boehner hasn‘t agreed to that. Harry Reid (INAUDIBLE) to that. Joe Biden has said that. Number one, we don‘t know what are in those $33 billion of cuts. We tried to find out at the White House today. They wouldn‘t say, if they know. And two, again, you know, the Republicans can‘t necessarily even deliver on $33 billion. So I just want to caution you and your—and our friends and listeners, this game is not over yet. I think the Democrats…

UYGUR: But let me…

PRESS: … they have gone too far. I would agree with you and Ed Rendell.

UYGUR: Right. So let me press you on that a little bit, though. But I…

PRESS: Sure.

UYGUR: You don‘t think that the Democrats are going to take that $33 billion number and walk it back, right? I mean, if anything, the Republicans are going to say, No, it‘s not good enough. And then I worry that they might even give them more. But you don‘t think they‘re going to walk that back to, like, a more reasonable number, do you, the Democrats?

PRESS: No, no, no. No. No. Once they give $33 billion, they can‘t take it back. But what‘s the real battle here is not between the Democrats and the Republicans. As you know, the real battle is between John Boehner and the Tea Party. He lost 63 of his own caucus on the last vote. He had to get Democratic votes.

So I think—as you were just saying, I think it‘s time to call their bluff now and let them shut down the government and then take—pay the price because it would be a hell of a price to pay if they do. I really don‘t think Boehner has the votes even for $33 billion. So this is far from over, Cenk.

UYGUR: So that‘s the critical part, Bill, because look, the fact that they have internal dissension doesn‘t really mean much unless it leads to something, right?


UYGUR: It has to have a conclusion. And the conclusion is, Hey, wait a minute, if they shut down the government because of that internal dissension, boy, aren‘t they crazy? And boy, hey, you shouldn‘t support those guys, right? I mean, that would be the conclusion.

But it seems like the Democrats are desperate to avoid that conclusion. So that doesn‘t seem to make sense to me, right?

PRESS: Well…

UYGUR: You see what I‘m saying?

PRESS: Look, you know, they don‘t want it. I don‘t think, frankly, Boehner wants it. I don‘t think Mitch McConnell wants it. But I think it‘s the tail wagging the dog across the street with this Tea Party, and these Tea Party freshmen really feel, you know, they‘re like the kamikaze – kamikaze Democrats, I used to call them. They‘d go over the cliff, right, rather than compromise. And that‘s where they are. So…

UYGUR: So that‘s why…

PRESS: I don‘t think the Democrats can give more. And I think the Democrats have to hold—they shouldn‘t have given this much. They can‘t give any more. And if it means shutting down the government, let them do it.

UYGUR: Yes, and look, it‘s not a matter of us saying shutting down the government. It‘s a matter of saying, at some point, I can‘t just give you 100 percent of what you want. That‘s crazy talk. We‘ve already given and given and given. So if you want to take that action, you got to shut it down.

But look, one last thing for you, Bill…

PRESS: Right.

UYGUR: … and I don‘t know if this‘ll be another point of disagreement or not, but I think the Tea Party has done an amazing job. I don‘t say that, like, as a good thing. It‘s a very unfortunate thing. But they have pulled this debate further and further right, and they got more and more spending cuts. So I mean, don‘t you have to say that crazy or not, it worked?

PRESS: Well, first of all, I agree with you. They have done an amazing job in splitting the Republican Party and pulling the Republican Party to the extreme right, to the point of view—look at that rally today, a hundred people out here in Washington. There were 100,000 last summer. I think they‘ve become so extreme that they‘re losing their support among the public, Cenk. But they still have these freshmen members of Congress who are demanding $100 billion and who have the votes. That‘s where their power is right now.

And I think they‘re more powerful than John Boehner, and Michele Bachmann is the real speaker of the House of Representatives today.

UYGUR: That‘s an interesting comment. All right, always a great conversation with you, Bill. Bill Press, everybody. Thank you.

PRESS: Love it. All right.

About William Brighenti

William Brighenti is a Certified Public Accountant, Certified QuickBooks ProAdvisor, and Certified Business Valuation Analyst. Bill began his career in public accounting in 1979. Since then he has worked at various public accounting firms throughout Connecticut. Bill received a Master of Science in Professional Accounting degree from the University of Hartford, after attending the University of Connecticut and Central Connecticut State University for his Bachelor of Arts and Master of Arts degrees. He subsequently attended Purdue University for doctoral studies in Accounting and Quantitative Methods in Business. Bill has instructed graduate and undergraduate courses in Accounting, Auditing, and other subjects at the University of Hartford, Central Connecticut State University, Hartford State Technical College, and Purdue University. He also taught GMAT and CPA Exam Review Classes at the Stanley H. Kaplan Educational Center and at Person-Wolinsky, and is certified to teach trade-related subjects at Connecticut Vocational Technical Schools. His articles on tax and accounting have been published in several professional journals throughout the country as well as on several accounting websites. William was born and raised in New Britain, Connecticut, and served on the City's Board of Finance and Taxation as well as its City Plan Commission. In addition to the blog, Accounting and Taxes Simplified, Bill writes a blog, "The Barefoot Accountant", for the Accounting Web, a Sift Media publication.
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