“GOP Fiscal Maneuvers”: Republicans Are More Preoccupied Now With The Optics Of “Not Surrendering”
So there are two pieces of news out today about the Republican response to the president’s so-far-very-successful maneuvers on the big fiscal issues. The first is a formal counter-offer from the House GOP leadership (with, significantly, Eric Cantor’s and Paul Ryan’s names joining that of John Boehner). It specifically calls for $800 billion in new revenues (close to what Boehner put on the table in his repudiated 2011 debt limit deal), but without rate increases. And it bites the bullet somewhat on spending by calling for a 2-year increase in the Medicare eligibiity age and a government-wide adjustment in how cost of living adjustments are calculated.
You could read this as Republicans deciding to get more specific on “entitlement reform” than on taxes (it’s extremely unlikely that you can come up with $800 billion in “loopholes” to close without hitting the middle class), or simply choosing the least inflammatory ways to reduce entitlement spending. Or–and this is my personal take at the moment–it could just be an offer meant to be refused that just gets the GOP out of the immediate problem it had with appearing unwilling to put anything on the table.
Arriving just before the “counter-offer” were a host of less formal reports that Republicans have a fallback strategy of letting an extension of the Bush tax cuts for taxable income under 250k pass without their votes, and then fighting Democrats tooth and nail after the beginning of the new year on the debt limit increase or indeed, anything else Obama wants.
I share Jonathan Chait’s puzzlement over this supposed strategy:
[Y]eah, Republicans would still have things to fight over. Obama is going to want measures to reduce unemployment. Republicans can dangle those. Obama is also going to want to not destroy the credit rating of the U.S. government for no good reason, and Republicans will threaten to do that, though it’s not clear that Obama is going to submit to another blackmailing on this.
But Republicans will also need Obama to sign a law canceling out the huge defense spending cuts scheduled for next year. If Obama is starting out with a trillion in higher revenue in his pocket (through expiration of the Bush tax cuts on the rich), and the extension of the middle-class tax cuts have largely taken the threat of a recession off the table, then he’ll still be negotiating from a position of strength. He’ll be able to offer Republicans cuts to entitlement programs plus defense spending increases in return for modest revenue increases, which don’t have to involve rate hikes, just to get to his own budget proposal.
Chait’s hunch is that Republicans are more preoccupied now with the optics of “not surrendering” on big fiscal votes than they are with actually imposing their priorities on Obama and the country. In other words, both maneuvers may be aimed at cutting losses without provoking an overt conservative backlash, and keeping–as Grover Norquist has suggested–their “fingerprints off the murder weapon” of any deal that can be described as betraying the sacrosanct “conservative principles.”
If that’s all true, it’s a strange way of exercising what Republicans claim is their co-responsibility for solving the nation’s fiscal problems after a “status quo election.” One might even reach the conclusion they lost.
By: Ed Kilgore, Contributing Writer, Washington Monthly Political Animal, December 3, 2012
“Flabbergasted Or Intoxicated?: John Boehner Says There’s No Difference Between Raising Revenue From Middle Class Or Wealthy
In an appearance on Fox News Sunday, House Speaker John Boehner told host Chris Wallace that it doesn’t make a difference whether new revenue in a deal to avert the fiscal cliff comes from the middle class or from the wealthiest Americans.
Boehner, who said that he was “flabbergasted” by the White House’s opening offer (despite the fact that it’s exactly what President Obama campaigned on), blasted the president as “not serious” for demanding an increase in tax rates on the wealthiest earners.
When Wallace asked if Obama has a mandate on the issue — given that raising taxes on the wealthy was arguably the central issue dividing the president and Mitt Romney in the presidential election — Boehner argued that it doesn’t matter whether new revenue comes from the wealthy or the middle class.
Listen, what is this difference where the money comes from? We put $800 billion worth of revenue, which is what he is asking for, out of eliminating the top two tax rates. But, here’s the problem, Chris, when you go and increase tax rates, you make it more difficult for our economy to grow, after that income, the small business income, it is going to get taxed at a higher rate and as a result we’re gonna see slower economic growth, we can’t cut our way out of this problem, nor can we grow our way out of the problem, we have to have a balanced approach and what the president wants to do will slow our economy at a time when he says he wants the economy to grow and create jobs.
Boehner is wrong on two points. First, there is no reason to believe that restoring Clinton-era tax rates on incomes over $250,000 will prevent the economy from growing; on the contrary, rate increases on the wealthy in 1992 and 1994 were followed by a tremendous economic boom. Second, it clearly matters where the revenue comes from; as Boehner and the Republicans’ own rhetoric acknowledges, the middle class needs fiscal relief — not an increased burden.
The full interview between Boehner and Wallace can be seen here; the exchange on tax rates begins at the 5:33 mark.
Perhaps Boehner doesn’t care where new revenue comes from because he hasn’t yet figured it out. When Wallace pressed Boehner to name specific loopholes and deductions that he’d be willing to eliminate in order to make up the revenue lost by extending the Bush tax cuts for the wealthy, Boehner declined — as Romney and Paul Ryan did repeatedly during the campaign – telling Wallace, “I’m not going to debate this or negotiate this with you.”
By: Henry Decker, The National Memo, December 3, 2012
“Why Sane Bargaining Looks Strange”: Two Can Play The Crazy Uncle Game
An entirely new political narrative is taking shape before our eyes, yet many in Washington are still stuck in the old one.
President Obama’s victory blew up the framework created by the 2010 elections, which forced him to play defense. Now, he finally has room to move. That’s the only way to understand the ongoing budget talks.
This has several implications. First, why was anyone surprised that Obama’s initial offer to the Republicans was a compendium of what he’d actually prefer? We became so accustomed to Obama’s earlier habit of making preemptive concessions that the very idea he’d negotiate in a perfectly normal way amazed much of Washington. Rule No. 1 is that you shouldn’t start bargaining by giving stuff away when the other side has not even made concrete demands.
Second, Obama made clear that he will not allow the fiscal calendar to set his priorities. Past actions by Congress established this wacky set of deadlines requiring frenzied decision-making. This does not mean the deficit is the nation’s highest priority. It isn’t. Speeding up economic growth is the most important thing now.
Thus did Obama’s opening proposal call for measures to boost the recovery, including an infrastructure bank, a public-private partnership that ought to appeal to Republicans. And he was right to insist upon an extension of unemployment insurance and another year of the payroll tax holiday or some equivalent way to keep middle-class purchasing power up. Raising taxes on the wealthy won’t damage the economy. A sudden drop in the take-home pay of the vast majority of U.S. consumers would.
Third, House Republicans have, so far, been unwilling to assume any risk to get what they claim to want. They seem to hope a deal will be born by way of immaculate conception, with Obama taking ownership of all the hard stuff while they innocently look on.
Obama went that route in 2011 when he feared that Republicans would bring down the nation’s economic house by failing to pass an increase in the debt ceiling. This time, he doesn’t face that risk.
If we go past the so-called “fiscal cliff” deadlines and all the resulting budget cuts and tax increases come into force, the administration can minimize the damage. It can delay the implementation of new tax tables so billions of dollars are not suddenly sucked out of the economy. There is no law requiring that budget cuts be implemented upfront or spread equally across the year. Obama can publicly announce he is delaying any cuts, on the theory that Congress will eventually vitiate some of them. And he can make sure the bond markets know of his plans well in advance.
This is not pretty, and it’s not ideal. But the only way to keep the next four years from becoming another long exercise in gridlock and obstruction is for Obama to hang tough now. And he has every right to.
Republicans claim they are fighting for cuts in entitlement programs, particularly Medicare. Fine. Let them put their cuts on the table. So far, all we have are words. Obama has outlined $400 billion in savings from Medicare. If this isn’t enough, the GOP’s negotiators should tell us how to find more. And having individual Republicans toss out ideas is not the same as a detailed public counter-proposal.
Republicans also say tax reform can raise enough money so we can avoid rate increases on the wealthy. Fine. Let them put forward a comprehensive plan so we can judge it. Their problem is that tax reform can’t produce the revenue that’s needed, but let’s at least see what they have in mind.
Obama is criticized for making life difficult for House Speaker John Boehner (R-Ohio) who has to bring around a rather right-wing caucus. Sorry, but demanding this sort of solicitude doesn’t fly anymore. Boehner rather brilliantly used the “I have to deal with this crazy uncle in the attic” gambit to extract a lot of concessions in 2011. Republicans walked away from the great deal Boehner won for them. The intervening election means they won’t get a similar gift this time. Obama has to win something for his own progressive supporters who rightly feel empowered by November’s results. Two can play the crazy-uncle game.
So a normal negotiation looks strange only because the past two years have been so utterly abnormal, driven by tea party extremism and an irrational hostility to Obama, a fundamentally moderate man who has already shown a willingness to offer more than his share of concessions. Boehner knows this, which is why everyone (especially Wall Street) should calm down.
By: E. J. Dionne, Jr., Opinion Writer, The Washington Post, December 2, 2012
“The GOP And Its Urge To Purge”: Don’t Get Caught Reading Marx In The Republican Cloakroom
It seems the Republicans have run out of squishy moderates to purge. Now they’re starting to run conservatives out of town for being insufficiently doctrinaire.
Exhibit A: The defenestration of Tom Cole.
Cole, a deeply conservative congressman from deeply Republican Oklahoma, is not to be confused with a RINO: Republican in name only. But when the lawmaker, who has been part of House GOP leadership, floated a perfectly sensible notion this week — that Republicans should accept President Obama’s offer to extend tax cuts for the 98 percent of Americans who earn less than $250,000 a year — he was treated as if he had been caught reading Marx in the Republican cloakroom.
“I think he’s wrong, and I think most of the conference thinks that he’s wrong,” declared rookie Rep. Raul Labrador (R-Idaho). Cole, he said, is “a man who has voted for a lot of the increased spending in Washington, D.C., and that’s the problem. We have a lot of Republicans who are, you know, catching their hair on fire right now, but they’re the ones who were here for 10 or 20 years causing all the problems that we’re now facing.”
Rep. Scott Garrett (R-N.J.) called Cole’s position “absurd.” House Speaker John Boehner went before the cameras to deliver Cole a rare public rebuke.
Cole, who enjoys a lifetime rating of 92 percent from the American Conservative Union as he enters his sixth term, isn’t worried about a putsch. “I think I’m going to be hard to sell as a dangerous liberal,” he told me with a chuckle. The outrage, he said, “surprised me a little bit, because I think the politics of this are blindingly clear.”
Cole is correct, for two reasons. On a practical level, his plan calls Obama’s bluff: Because raising taxes on the top 2 percent of earners won’t bring in nearly enough tax revenue to fix the budget problem, Obama would likely be forced to come up with some serious entitlement-program cuts as part of a larger tax-and-spending deal.
But Cole is right for a larger reason: The Republicans’ negotiating position is morally indefensible. They are holding 98 percent of Americans hostage by refusing to spare them a tax hike unless the wealthiest 2 percent are included.
“Some people seem to think this is leverage. I think that’s wrong,” Cole said. “You don’t consider people’s lives as leverage. I live in a blue-collar neighborhood. I’ve got a retired master sergeant as my next-door neighbor, police officer across the street. These are working folks, they’re great people, and the idea that I would ever use them as leverage is just wrong.”
In defying the party purists, Cole is taking a novel approach: doing what his constituents want him to do. His staff reports that calls and e-mails to his Washington office are running 70 percent favorable, and calls to his south-central Oklahoma offices are 90 percent positive.
No surprise: Median income in his district is under $47,000, below the national average of $52,000. Only 1.8 percent of households there have income of $200,000 or more.
“They’re pro-business, they’re pro-free enterprise,” Cole said of his constituents, who are farm and ranch workers, oil employees and the like. “But they’re going to want to know that we’re not going to raise taxes on them because they make $43,000 a year, and $1,000 to $2,000 is a lot of money when you’re trying to raise a family.”
Cole, who worked as a political consultant and as chief of staff at the Republican National Committee before coming to Congress, understands this reality better than many of his peers. In their obsession with protecting the wealthiest, Republicans often work against their own constituents, because red states tend to be poorer and more reliant on government spending.
Cole’s stand is a refreshing reminder that being conservative doesn’t mean you have to be unreasonable. “Both sides, I think, need to be a lot more clear-eyed,” he told me. “We’re going to be living in this house together for four years in all likelihood. Let’s get some things done that we can agree on.”
Thankfully, Cole, who won reelection with 68 percent of the vote, isn’t intimidated. Of his intraparty critics, Cole asks: “Where’s your political courage? It’s pretty easy to vote ‘no’ around here. But we’ve got a divided government. The American people ratified that in this election. They’ve basically told us to work together. Here’s something we both agree on that would be in their interest. Why don’t we do this?”
By: Dana Milbank, Opinion Writer, The Washington Post, November 30, 2012
“An Effective Ad Man”: Democrats Could Use Their Own Grover Norquist
Here’s the first lesson from the early skirmishing over ways to avoid the fiscal cliff: Democrats and liberals have to stop elevating Grover Norquist, the anti-government crusader who wields his no-tax pledge as a nuclear weapon, into the role of a political Superman.
Pretending that Norquist is more powerful than he is allows Republicans to win acclaim they haven’t earned yet. Without making a single substantive concession, they get loads of praise just for saying they are willing to ignore those old pledges to Grover. You can give him props as a public relations genius. Like Ke$ha or Beyonce, he is widely known in Washington by only one name. But kudos for an openness to compromise should be reserved for Republicans who put forward concrete proposals to raise taxes.
The corollary is that progressives should be unafraid to draw their own red lines. If you doubt that this is a good idea, just look at how effective Norquist has been. Outside pressure from both sides is essential for a balanced deal.
Start by insisting that Social Security and any increase in the retirement age be kept off the table. President Obama’s bargaining hand will be strengthened further if he can tell Republicans that there just aren’t Democratic votes for steep cuts in Medicaid and Medicare. The president’s room for maneuver expands still more if liberals refuse to look at cuts in programs unless Republicans are prepared to raise tax rates on the wealthy.
Already, there are signs that Republicans realize how much leverage the president has. If Congress doesn’t act, all the Bush tax cuts expire at the end of the year. At that point, the Senate’s Democratic majority has the power to block (or Obama can veto) any restoration of the upper-end Bush tax rates.
One indication that Republicans are aware they’re boxed in came from Rep. Tom Cole (R-Okla.), one of his party’s shrewdest political minds. He suggested that Republicans should take up the president’s invitation to extend the Bush tax cuts for the 98 percent of Americans who earn less than $250,000 a year. Yes, this would amount to throwing in the towel on those upper-bracket levies. But Cole knows that it won’t help the Republican brand if voters come to see the GOP’s one and only objective as protecting wealthier Americans from tax increases.
The next lesson is not about politics or PR. It’s about substance, and this is where the Washington establishment has to get serious. The simple fact is that it’s bunk to claim that “tax reform” alone can produce the revenue we need.
One of the great disservices of the Bowles-Simpson commission was that it fed the impression that tax reform could generate so much cash that it would permit a cut in tax rates.
Grant Erskine Bowles and Alan Simpson credit for good intentions — they were desperate to find a way to get Republicans on their commission to acknowledge the need for new revenue. It’s also worth remembering that their proposal assumed the expiration of the Bush tax cuts for those earning more than $250,000 a year. Nonetheless, their stress on tax reform with lower rates was more a political deal than wise policy. They sent us down the wrong path.
The only way tax reform might raise enough money to prevent a rate increase, let alone create an opportunity for rate cuts, is to reduce popular deductions (like the one on mortgage interest) so deeply that middle-class Americans would get a tax increase, too. And eliminating or sharply undercutting the deduction for state and local taxes is a bad idea. This only penalizes higher-tax states that try to solve their own social problems — for example, by providing health insurance to their low-income residents.
And all the schemes to eliminate tax expenditures to avoid rate increases have the effect of protecting just one group: Americans with very high incomes. That’s how the math works.
The right thing is to bring back Bill Clinton’s tax rates on the well-off and then have a broad tax reform discussion next year. A similar logic applies to health-care programs, as Jonathan Cohn suggested in the New Republic. Before making big cuts in Medicaid and Medicare, we need to see whether the reforms in the Affordable Care Act can contain medical inflation.
The fiscal cliff creates an enormous opportunity to end an era in which it was never, ever permissible to raise taxes. In the pre-Grover days, conservatives believed passionately in pay-as-you-go government. A tough stand by progressives will make it easier for conservatives to return to the path of fiscal responsibility.
By: E. J. Dionne, Jr., Opinion Writer, The Washington Post, November 28, 2012
Share This Blog
Unknown Feed- An error has occurred; the feed is probably down. Try again later.
mykeystrokes.com 