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Cliff Talks Aren't at a Standstill -- They Haven't Started

After all of the lengthy, difficult and failed budget negotiations over the past few years, did anyone really think dealing with the fiscal cliff was going to be fast, easy and painless?

The discussions about avoiding or mitigating the effects of the fiscal cliff were always virtually guaranteed to be extremely contentious and far more hostile than friendly. For that reason, itís hard to understand why anyone thought the statements made at the end of last week and over the weekend that the fiscal cliff discussions between the White House and congressional Republicans were already stalemated were an accurate representation of what was actually happening.

Like the extended arguments about the shape of the table that took place before serious negotiating about ending the Vietnam War began, the only action that has occurred so far on the fiscal cliff is the White House and Republicans pounding their chests, trying to be recognized as the alpha male. Like the discussions about the shape of the table, nothing will be decided about taxes and spending until this stops.

In fact, the three key elements to resolving the fiscal cliff situation are all still missing.

First, neither the White House nor the GOP has yet shown any willingness to negotiate with the other. To the contrary, they each have done little more than stake out starting positions by giving the other side what so far is an impossible-to-accept alternative. Thatís demanding, not negotiating.

Second, congressional Republicans have not yet agreed among themselves what they want from and are willing to accept in a deal. The stated GOP position so far has been nothing more than having the White House do what it did last summer during discussions on raising the federal debt ceiling: negotiate with itself by offering something that is virtually certain to be rejected by Republicans. Now that the administration has shown itís not going to do that this time, Republicans have to figure out for themselves just how far they are willing to go.

I was told this week that this intra-GOP discussion hasnít been settled yet because there are multiple factions with Republican ranks both between and within the House and Senate. Until thatís settled, Speaker John A. Boehner, R-Ohio, will be as limited in what he can offer the White House as he and House Majority Leader Eric Cantor, R-Va., were in all of the failed budget negotiations that took place last year.

That makes this fiscal cliff a very different situation than the one that existed when Speaker Newt Gingrich, R-Ga., was negotiating with President Bill Clinton on the budget in the 1990s.

While Gingrich could cut a deal with Clinton and be relatively certain the GOP rank and file in the House and Senate would follow him, Boehner doesnít have anything like that same assurance now. Because of that, heís still negotiating at least as much with Republicans as with Democrats, and his public intransigence so far is both a stalling tactic and an effort to win the confidence of his party colleagues so the serious negotiations can begin.

Meanwhile, the White House will likely sit back and wait until Boehner gets that support or specific marching orders, or until some other Republican emerges who can negotiate on the GOPís behalf.

Third, other than receiving increasingly dire warnings, nothing bad has happened yet to force everyone to negotiate seriously.

The stock market has indeed gyrated since the fiscal cliff replaced the 2012 elections as the lead story in the news. But the day-to-day ups and downs have hardly been more than whatís been typical over the past year. Multiple CEOs and corporate interest groups have issued warnings about layoffs and lower profits if the cliff isnít avoided and have traveled to Washington to press their cases. But so far thatís been all talk and little action. And the warnings about higher taxes now come hourly rather than daily. But no oneís taxes have actually gone up, and the amounts withheld from our paychecks havenít yet changed.

And as surprising as it might be to those of us for which the fiscal cliff has become a reason for living, there still is great skepticism from those outside the Beltway about it ever actually happening. As a result, the voter uprising that many in Washington are expecting about the tax increases and spending cuts hasnít happened. In other words, no lawmaker and no one in the White House has yet suffered much politically from what has or, in this case, hasnít happened. That has made it easy for the negotiating to be slow-going.

The only thing that is likely to change any of this is the calendar. Without the intense pressure of the fiscal cliff actually happening, there seems to be little incentive for any serious negotiating to take place. A market drop or significant announced layoffs before Jan. 1 might change that. So, too, would a sudden realization by those who are still skeptical that the cliff might not be avoided after all.

But until that happens, you really canít say the fiscal cliff negotiations are at a standstill. The truth is they really havenít started yet.

Stan Collender (@thebudgetguy) is a partner at Qorvis Communications and author of ďThe Guide to the Federal Budget.Ē His blog is capitalgainsandgames.com.

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