GOP offers new revenues in compromise, Dems reject

posted at 12:10 pm on November 9, 2011 by Ed Morrissey

Call this Barack Obama’s worst nightmare.  After having set up the 2012 election as a choice between an activist incumbent President and a do-nothing Congress, what could be worse than a Congress that actually accomplishes some fiscal reform?  The horror!  Fortunately, his party swooped in for the block:

Congressional Republicans have for the first time retreated from their hard-line stance against new taxes, offering to raise federal tax collections by nearly $300 billion over the next decade as part of a plan to tame the national debt.

But Democrats rejected the offer Tuesday — along with the notion that Republicans had made a significant concession that could end the long-standing political impasse — leaving a special debt-reduction committee far from compromise with less than two weeks until its Thanksgiving deadline. …

“They’re anxious to promote a certain concept with all of you,” Sen. John F. Kerry (D-Mass.), one of the negotiators, told reporters. “I’ll be very clear that whatever they put there doesn’t get the job done.”

Senate Minority Leader Mitch McConnell (R-Ky.) fired back that Republicans are “working diligently to get a solution” and accused Democrats of trying to block a deal. McConnell said he suspected that “the folks down at the White House are pulling for failure because, you see, if the joint committee succeeds, it steps on the story line that they’ve been peddling, which is that you can’t do anything with the Republicans in Congress.”

Republicans offered a restructuring of the personal-income tax code that would both lower rates and raise revenues, thanks to the elimination of some deductions and exemptions.  That would capture more income as taxable while flattening the rate structure.  The last time Congress and a President undertook a serious effort in this direction, the result was an economic boom that ended up greatly increasing revenues.

The GOP took some risk in pursuing this position.  Just the mere hint that Republicans would offer revenue increases as part of a compromise had grassroots activists hopping mad over the weekend.  John Boehner had to clarify on ABC’s This Week that the revenues would come from a broader tax reform that would encourage investment and produce more stable economic growth, but that didn’t mollify too many people.  Despite past history, Democrats stuck to their static-analysis argument that lower rates mean less revenue:

The plan’s “centerpiece” would be Republican acceptance of eliminating certain tax deductions for the wealthy in exchange for a permanent reduction of the marginal tax rates set under President George W. Bush, said one aide to a Republican super committee member. The GOP would set the income-tax rate on the richest at 28 percent.

Republicans say they could accept up to $300 billion in new taxes as part of a plan that cuts the deficit by $1.2 trillion over 10 years—the goal the super committee must meet to stave off mandatory cuts under this summer’s Budget Control Act.

But Democrats say Republicans calculated those figures by counting the savings portion of eliminating some tax deductions but not counting trillions in lost revenue from reducing marginal-tax rates. The Congressional Budget Office would likely score the proposal as increasing deficits when compared to current law.

Clearly the Democrats aren’t interested in tax reform, even if it produces more revenue; they’re only interested in tax increases.  That leaves the best win-win scenario off the table for both parties, which a fundamental tax reform package would be.  Democrats could argue that they eliminated fat-cat deductions and exemptions while Republicans could brag about lowering rates, and the resulting growth would reflect well on both parties.  Unfortunately, all that has to take a back seat to Obama’s 2012 electoral strategy that will paint Republicans as obstructionists.  Anyone paying attention will immediately diagnose this as a bad case of projection.

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The real question is how we change the narrative from ‘Republican obstructionists’ to ‘Democrat obstructionists’. The opportunity is there.

neoavatara on November 9, 2011 at 12:13 PM

DNC: The Party of “NO”

Baxter Greene on November 9, 2011 at 12:13 PM

“They’re anxious to promote a certain concept with all of you,” Sen. John F. Kerry (D-Mass.), one of the negotiators, told reporters. “I’ll be very clear that whatever they put there doesn’t get the job done.”

“whatever they put there”

Hmmm. Sounds old JK doesn’t know whats been ‘put there’, but he knows its bad. And he wants everyone to be clear about that.

BobMbx on November 9, 2011 at 12:14 PM

The Democrats are like Terrorists or something.

portlandon on November 9, 2011 at 12:16 PM

My hate for the democrats grows every day

blatantblue on November 9, 2011 at 12:18 PM

Anyone paying attention will immediately diagnose this as a bad case of projection.

There’s the rub.

BacaDog on November 9, 2011 at 12:19 PM

Yeah…and the half percent of Americans that actually follow along and know what’s going on don’t really matter.

We have Cain to smear, you see.
There’s nothing else going on.

bridgetown on November 9, 2011 at 12:21 PM

Why the Long Face, John?

Del Dolemonte on November 9, 2011 at 12:21 PM

If only the Democrats had a Grand Wizard to force the issue…

… Oh, wait!

/

Seven Percent Solution on November 9, 2011 at 12:22 PM

Do nothing kerry….

ted c on November 9, 2011 at 12:22 PM

These obstructionist Democrats hate Grandma!

visions on November 9, 2011 at 12:22 PM

The Democrats are only interested in power. They don’t give a rat’s ass about the deficit or debt. Somehow 50% of Americans still haven’t caught on.

mankai on November 9, 2011 at 12:22 PM

The d’s in dc have no intentions of getting anything positive done for our country. bho and the d’s just continue to blame the r’s as a do nothing bunch.
L

letget on November 9, 2011 at 12:23 PM

“whatever they put there”

Hmmm. Sounds old JK doesn’t know whats been ‘put there’, but he knows its bad. And he wants everyone to be clear about that.

BobMbx on November 9, 2011 at 12:14 PM

And it’s a good thing we have a collusor who can help us distinguish the good from the bad.

shick on November 9, 2011 at 12:23 PM

“I’ll be very clear that whatever they put there doesn’t get the job done.”

So, we have him on record saying that whatever the GOP puts out will be opposed. Who is the party of ‘no’?

Vashta.Nerada on November 9, 2011 at 12:24 PM

Why the Long Face, John?

Del Dolemonte on November 9, 2011 at 12:21 PM

So a horse walks into a bar…

/

Seven Percent Solution on November 9, 2011 at 12:27 PM

Anyone paying attention will immediately diagnose this as a bad case of projection.

In a real world, that would be the case. But here in Bizarro world, the MSM will ensure the news isn’t reported accurately and the mime will continue to be the Republicans are obstructionists and continue to carry Obama’s water for him for the maximum amount of leg tingles. Are leg tingles up or down twinkles? I can’t seem to keep that straight.

TulsAmerican on November 9, 2011 at 12:33 PM

Just the mere hint that Republicans would offer revenue increases as part of a compromise had grassroots activists hopping mad over the weekend.

Which is really off the mark. Deductions and credits are a way of paying people to do things, which makes them a hidden part of the government overspending that is owr real problem. Getting rid of them should be just as important to Tea Partiers as cutting budgeted spending.

Count to 10 on November 9, 2011 at 12:37 PM

Let’s not spin this: the GOP wanted to get rid of deductions that benefit the middle class while dropping rates for the wealthy. It’s the same “trickle down” nonsense that the past 10 years have debunked for anyone with 4 credits in Econ.

Rainsford on November 9, 2011 at 12:38 PM

Let’s not spin this: the GOP wanted to get rid of deductions that benefit the middle class while dropping rates for the wealthy. It’s the same “trickle down” nonsense that the past 10 years have debunked for anyone with 4 credits in Econ.
Rainsford on November 9, 2011 at 12:38 PM

Do you ever write anything here that is actually true?

Count to 10 on November 9, 2011 at 12:46 PM

It’s the same “trickle down” nonsense that the past 10 years have debunked for anyone with 4 credits in Econ.
Rainsford on November 9, 2011 at 12:38 PM

Hear hear!

What we need is a “trickle up” economy whereby impoverishing everyone and having fiscal decisions made by a select group, call them..oh I don’t know..a “politburo” or something, leads to massive economic growth.

It’s obviously working in places such as Greece and Portugal, it can work here too.

Bishop on November 9, 2011 at 12:48 PM

Clearly the Democrats aren’t interested in tax reform, even if it produces more revenue; they’re only interested in tax increases.

. . .

“The power to tax is the power to destroy”

Skandia Recluse on November 9, 2011 at 12:48 PM

Since we can always pass a “Pentagon budget fix”, I guess I don’t see the problem with automatic recission. If we could pass a salary and benefits freeze for federal workers, to include non-combat military employees, I’d be even happier!

MTF on November 9, 2011 at 12:49 PM

Clearly the Democrats aren’t interested in tax reform, even if it produces more revenue; they’re only interested in tax increases.

. . .
<blockquote>The power to tax is the power to “punish your enemies”

Skandia Recluse on November 9, 2011 at 12:53 PM

SUPERCOMMITTEE = Death panel for the American Taxpayer.

PappyD61 on November 9, 2011 at 12:56 PM

WAIT.

So now I have the DEMS to Thank for stopping new taxes???

I’m confused.

orbitalair on November 9, 2011 at 1:05 PM

Did anybody really believe those blood sucking leftists on that committee would actually compromise? They must have more money for their parasitic constituents and nothing will get in the way of their quest.

rplat on November 9, 2011 at 1:08 PM

Despite past history, Democrats stuck to their static-analysis argument that lower rates mean less revenue

Nah, dynamic analysis is too hard. Consequences, human nature, action/reaction? Meh. The D’s just want to pull a lever.

iurockhead on November 9, 2011 at 1:16 PM

Let’s not spin this: the GOP wanted to get rid of deductions that benefit the middle class while dropping rates for the wealthy. It’s the same “trickle down” nonsense that the past 10 years have debunked for anyone with 4 credits in Econ.
Rainsford on November 9, 2011 at 12:38 PM

Yeah it’s weird how when overall rates are dropped they disproportionately affect those who pay a disproportionately high amount of taxes.

gwelf on November 9, 2011 at 1:24 PM

Democrats use the PLO strategy. Everything the other side does is never enough, and they don’t give an inch, while complaining loudly to a compliant media about how evil the other side is and how martyred they are. And like Israel, Republicans cave time and time again.

AnotherOpinion on November 9, 2011 at 1:38 PM

suckers…

equanimous on November 9, 2011 at 2:06 PM

According to Rand Paul, the Dems have stormed out. Drudge, developing.

Work this, GOP !!!!!!!!!!!

pambi on November 9, 2011 at 2:39 PM

GOP offers new revenues…

No Thanks!

Republicans raising taxes, becoming the Democrat’s tax collectors, accomplishes exactly one thing, it enables the next round of irresponsible Democrat spending!

RJL on November 9, 2011 at 3:16 PM

Republicans raising taxes, becoming the Democrat’s tax collectors, accomplishes exactly one thing, it enables the next round of irresponsible Democrat spending!
RJL on November 9, 2011 at 3:16 PM

The Republicans were trying to cut taxes while reducing the off-book spending done through the tax code with deductions. If you get stuck demanding your tax deductions, you aren’t really different from someone demanding their government pork.

Count to 10 on November 9, 2011 at 3:21 PM

So now I have the DEMS to Thank for stopping new taxes???

I’m confused.

orbitalair on November 9, 2011 at 1:05 PM

With the new Christmas Tree Fee, all federal money troubles were cured.

BobMbx on November 9, 2011 at 5:08 PM

DemNOcrats?

DemNOrats?

MarkT on November 9, 2011 at 5:58 PM