Fiscal cliff deal taking shape?

posted at 10:01 am on November 19, 2012 by Ed Morrissey

Can Congress reach a deal to avoid the consequences of the “fiscal cliff”?  So far the prospects have looked rather dim.  National Journal’s Dan Friedman has a more optimistic take — but it depends on Republicans trading top tax rates for tax and entitlement reform:

Top staffers are working on a fiscal cliff deal after leading Democrats emerged encouraged from a Friday White House meeting in which Republican leaders did not explicitly reject the suggestion they accept a Senate-passed bill that would allow tax rates to rise on top earners, leadership aides said.

Democrats hope their bill, which would need to pass only the House, can serve as a “down payment” this year in a deal that would include agreement on a mechanism to enact tax and entitlement reforms next year.

“The real development from our standpoint is that we said we are absolutely clear that we are sticking to our position that the Senate bill is what is [going to] happen between now and Dec. 25th,” the Democratic aide said. “Notably, Republicans didn’t shoot that down.”

Republicans replied that there are a lot of things they didn’t shoot down along with tax increases on the top brackets:

Senate Minority Leader Mitch McConnell, R-Ky. spokesman Don Stewart mocked the suggestion GOP leaders’ silence on Democrats’ suggestion is significant. “We didn’t rule out unicorns,” Stewart said. “We didn’t rule out building a cheese factory on the moon and Democrats didn’t rule out abolishing the EPA.”

Still, rather than flatly rejecting Democrats’ suggestion, GOP leaders said that their staffs would work in the coming week on binding proposals to reform the tax code and get savings from entitlement programs, staffers said.

Yes … but. The election has probably taken the wind out of the sails from the GOP drive to lock in all of the current tax rates.  Had Obama lost, or had control of the Senate shifted to the Republicans, that might not be the case.  With only one chamber under their control and the prospect of driving off the cliff in order to protect the top rates, it’s getting more likely that we’ll see a Republican horsetrade on those points in order to get commitments on entitlement and tax reform.

Those commitments had better be solid, though.  The sequestration that drove this process might be one way to ensure that Democrats follow through on an agreement, but this time the sequestration had better take a bigger bite out of Democratic priorities than the previous version did.  Boehner’s aide made that argument, which the Democrats didn’t dispute:

An aide to House Speaker John Boehner, R-Ohio, earlier Friday said the GOP’s goal for the coming weeks “is to settle on long-term revenue targets for tax reform as well as targets for savings from our entitlement programs.” With targets agreed on, “we can create simple mechanisms, in statute, that would achieve those revenue and spending goals,” the aide said. “They would be in place unless or until more thoughtful policies replace them.”

The Democratic leadership aide did not dispute that description, except to say it overlooks action to be taken in December. When considered along with Republicans’ muted reaction to Democrats’ proposal to pass the Senate tax bill, the aide argued the upshot of the meeting is the probability the GOP will accept, in December, an increase in taxes on top earners in exchange for agreement on binding tax and entitlement reform mechanisms next year.

In the current political line-up, that’s probably the best the GOP can do without playing chicken all the way to the cliff with Democrats.  If voters wanted a better deal, they would have replaced more of the players two weeks ago.

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When they step back from that “fiscal cliff”, could they take a moment, and throw Harry over the edge?

Another Drew on November 19, 2012 at 1:31 PM

When they step back from that “fiscal cliff”, could they take a moment, and throw Harry over the edge?

Another Drew on November 19, 2012 at 1:31 PM

Why stop with Harrietta? Entire Congress over the cliff is fine by me, Boehner and McConnell should lead them all after their utter failure in August of 2011.

riddick on November 19, 2012 at 1:52 PM

The House members did not run on raising taxes, and the Democrats fully intend to blame the House no matter what happens. I see no political advantage in caving.

The House has the actual power of the purse. All revenue bills have to originate in the House. They need to demand budgets that cut the executive staff in painful ways, to make sure that Obama doesn’t have the money to bypass Congress and their funding.

tom on November 19, 2012 at 2:17 PM

In other words, the GOP will cave. That, folks, is why many conservatives did not bother to vote on November 6. Boehner and McConnell aren’t a lot different from LBJ.

Colony14 on November 19, 2012 at 2:19 PM

The House needs to explain that Senate bills about revenue are dead until the Senate actually passes a budget. Until then, nothing they propose economically can be taken seriously.

tom on November 19, 2012 at 2:20 PM

Here’s soundbite for you:

“The Senate has not passed a budget in 3 years, but they want to dictate a budget to the House?”

tom on November 19, 2012 at 2:22 PM

Right. Tax hikes on wealthy now, entitlement reform in 20 years. Heard that one before.

ctmom on November 19, 2012 at 10:22 AM

Yeah, can’t wait to hear the illegal immigration deal the RINOs sign up to. Something like this: Citizenship for everybody in the entire third world NOW! and secure the border over the next 50 years.

Alabama Infidel on November 19, 2012 at 11:04 AM

Yep, perfect comparison. We can’t barter in this way, because we are giving up an immediate change to a hard law which is very hard to reverse for vague commitments over years and years.

Let’s trade away the millionaire’s tax and deductions reform only if it is included in a slashed budget for 2013. No more continuing resolutions. No more legacy Porkulus.

slickwillie2001 on November 19, 2012 at 2:23 PM

If these cowards cave on tax rates it will be the end of the Republican party now and forever.There will be a new party of fiscal conservatives and social libertarian that will take hold and with in a few years be the majority party.

logman1 on November 19, 2012 at 3:33 PM

There are no honest brokers on the left to deal with. If they believe it is to their advantage to go over the cliff, over we go. They control.

We are well past our allotted 200 years. Deep into dependency and headed toward bondage. Humans always repeat the cycle. The cycle is inevitable. It is in our DNA.

Carnac on November 19, 2012 at 3:38 PM

I would rather deal with it than have my kids deal with this crap. Rather than just kick the can down the road and play “Lucy’s football” with the entitlement reform, let’s just deal with this now and be done with it.

Like an addict, sometimes the only cure is to hit rock bottom. The only difference in this case is the “bottom” only gets lower the longer we let it go. It will suck, but let’s just get it over with – let the Dems have their stupid huge tax increase (vote present) and we’ll rise from the ashes with hopefully a better sense of fiscal sanity. Santa’s broke.

Also, let’s look at the score card for Republicans:
cave on fiscal conservative (huge tax increases and the inevitable fail on real “entitlement” reforms). Cave on rule of law (amnesty). Why vote for them – they’ve essentially become the Democrat party anyway.

batter on November 19, 2012 at 3:54 PM

Here’s soundbite for you:

“The Senate has not passed a budget in 3 years, but they want to dictate a budget to the House?”

tom on November 19, 2012 at 2:22 PM

Or how about:

“…you are right to say we’re not coming before you today to say we have a definitive solution to that long-term problem. What we do know is, we don’t like yours.”

Hill60 on November 19, 2012 at 4:14 PM

And the proof of that is staring us in the face. Sequestration cuts all of 10% of the deficit, and about 2% of the total federal budget, and everyone (including the GOP) is running around trying to avoid that like it’s the apocalypse. If these f*cktards can’t even cut 2% of the budget without it being a crisis of epic proportions, how in the heck do we ever expect them to actually have a balanced budget?!

gravityman on November 19, 2012 at 1:04 PM

As I pointed out that does take an actual leadership with some spine…a non-elite leadership… the GOP just can’t seem to figure out that Seniority just means ‘corrupt fossil’ in terms of politicians.

The solution is always drastic, and gets more so with each kick of the can no longer down the road but just a few inches. At some point the can falls into vast chasm ahead of us and that is it for the economy.

The American solution to an addiction: cold turkey. Lock yourself in a room with only bread and water and go through the withdrawal pains for days, weeks… in the case of this Nation years or decades. And when it is over, its over and you then rededicate yourself to the straight and narrow never wanting to go through that again. This will happen either by default of the government or via stopping the spending above income. In other words, it will happen it is just a question of when, not if, it will happen. Greece is denying the obvious. Ditto Italy. Spain and France also refuse to see the burning homes they live in. Making the tough choice requires that the elite admit that they have been duplicitous, made a mistake in keeping up this charade and now have to administer harsh medicine and expect to be voted out of office in droves to do so. Do it quickly, start the withdrawal pains now, and you get done faster… drag it out and the potential for unstructured chaos looms. We can either do it with structure, by intent, or with chaos by default.

Leadership is supposed to make hard choices.

No one Upon The Hill leads.

Thus the default setting is chaos and economic collapse, possibly taking the government with it. Possibly with much blood on the streets, cities aflame, and our infrastructure imploding due to lack of fiscal soundness and others trying to take our assets as we default on debt. That is the easy way. It ends in ruin. The hard way takes leadership, and there is none of that.

I recommend the hard way as best, so we can keep things running on a lean basis and restructure our economy and snuff our entitlements after the current user base is no longer expanding. That is the way that SAVES LIVES. Doing otherwise is tantamount to being an accessory to mass murder, and I consider it to be treason once that murder starts with blood on the hands of those who did nothing. That is why I recommend the hard way… and it requires patriots and friends of liberty to do. Maybe, some day, they will show up.

ajacksonian on November 19, 2012 at 4:23 PM

Yes, I voted for more Gridlock. Not more spending for President Obama. NONE. No increases. No new programs to fund.

Roll the budget back to 2008 and freeze it for four years.

Fleuries on November 19, 2012 at 4:52 PM

so are we just gonna talk, or are we going to start lighting a fire under our representatives feet.

renalin on November 19, 2012 at 5:07 PM

History has shown that you can’t trust the Democrat’s word, period. No tax increase now with a promise of spending cuts later. Bush senior bought that and lost his election in large part because Republicans attacked him for the tax increases with no spending cuts. Reagan gave amnesty with a Democratic promise to close the border, which obviously never happened.

amr on November 19, 2012 at 5:20 PM

Bonehead shouldn’t TALK TO THAT POS until the Senate passes a budget…fluke this song and dance!

KOOLAID2 on November 19, 2012 at 6:49 PM

Michael Moore wants to drive the rich off the fiscal cliff.
http://www.breitbart.com/Big-Hollywood/2012/11/19/michael-moore-drive-rich-off-cliff

Truly the inmates are running the asylum and entertaining it at the same time.

onlineanalyst on November 19, 2012 at 6:58 PM

onlineanalyst on November 19, 2012 at 6:58 PM

Only a proggie like this quarter-billionaire fat fck can get away with the ‘just a regular guy’ act and not be laughed out of public.

slickwillie2001 on November 19, 2012 at 7:31 PM

There’s not much more that can be done to educate the American electorate than to let them live the Obama utopia they just voted for. Give the democrats what they want, get entitlement reform if possible, but otherwise the people need to feel the consequences of their lack of seriousness. Continuing to fight and allowing the democrat-media complex to blame republicans for everything isn’t going to help, this has to be squarely on the dems.

When will the markets take a hand in this?

trigon on November 19, 2012 at 10:54 AM

Until Obama causes the world to stop using the dollar as a reserve currency and until the Fed no longer has any ability to print money without massive inflation, there’s not much the markets can do. As an investor you could stop playing the game now but then you’d just be leaving those mint dollars the Fed is printing for some foreigner escaping an even worse financial situation.

jarodea on November 19, 2012 at 8:28 PM

Good luck to Republicans in their next primary when they have to explain why they went along with tax increases.

And spare me the nonsense about entitlement reform with some phony promise in 30 years when everyone is long gone.

BradTank on November 19, 2012 at 8:52 PM

Dang, the Stupid Party just refuses to learn from history. How many times have the democrats promised “spending cuts on Tuesday for a tax increase today”? How many times have the @#$% Republican establishment grumbled that “it’s the best deal we can get and this is a crisis we have to solve now!”? How many times have those spending cuts actually happened? Well, except for the Defense Department, those cuts always seem to happen. Entitlements and the really expensive, extra-constitutional stuff? Not so much.

AZfederalist on November 19, 2012 at 9:14 PM

Without reading a single news report, blog or listening to any report on fiscal cliff negotiations, I know one aspect of any resolution, Boehner will get the short end of the stick and screw us over while claiming both sides sacrificed.

Over50 on November 19, 2012 at 10:16 PM

Roll the budget back to 2008 and freeze it for four years.

Fleuries on November 19, 2012 at 4:52 PM

2008 spending levels too!

E-R

electric-rascal on November 20, 2012 at 12:01 AM

Dang, the Stupid Party just refuses to learn from history. How many times have the democrats promised “spending cuts on Tuesday for a tax increase today”? How many times have the @#$% Republican establishment grumbled that “it’s the best deal we can get and this is a crisis we have to solve now!”? How many times have those spending cuts actually happened? Well, except for the Defense Department, those cuts always seem to happen. Entitlements and the really expensive, extra-constitutional stuff? Not so much.

AZfederalist on November 19, 2012 at 9:14 PM

Like the debt ceiling it is in all practical effect quite endless.

The stupid party will not learn, the GOP needs to go the way of the Whigs, I will never ever cast one vote again for moderate democrats hiding behind a meaningless label like “Republican”!

Like drunks, these idiots haven’t hit rock-bottom yet, they and their enablers need to learn a lesson their bones will never forget.

insidiator on November 20, 2012 at 7:58 AM

“the probability the GOP will accept, in December, an increase in taxes on top earners in exchange for agreement on binding tax and entitlement reform mechanisms next year.”

Give the Dems what they want now for an agreement set in the future. Have we been there and done that? How many times has that not worked?

Viator on November 20, 2012 at 1:50 PM

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