Report: Obama’s “fiscal cliff” offer to Republicans calls for $1.6 trillion in new taxes and end of debt ceiling in exchange for … nothing, basically; Update: McConnell laughed out loud; Update: Walk away, says Krauthammer

posted at 6:02 pm on November 29, 2012 by Allahpundit

Even more unbelievable than the “offer” itself is the fact that the our hack media will go on painting Republicans as the unreasonable ideologues in this equation.

House Republicans said on Thursday that Treasury Secretary Timothy F. Geithner presented the House speaker, John A. Boehner, a detailed proposal to avert the year-end fiscal crisis with $1.6 trillion in tax increases over 10 years, an immediate new round of stimulus spending, home mortgage refinancing and a permanent end to Congressional control over statutory borrowing limits.

The proposal, loaded with Democratic priorities and short on detailed spending cuts, was likely to meet strong Republican resistance. In exchange for locking in the $1.6 trillion in added revenues, President Obama embraced $400 billion in savings from Medicare and other entitlements, to be worked out next year, with no guarantees.

He did propose some upfront cuts in programs like farm price supports, but did not specify an amount or any details. And senior Republican aides familiar with the offer said those initial spending cuts might well be outnumbered by upfront spending increases, including at least $50 billion in infrastructure spending, mortgage relief, an extension of unemployment insurance and a deferral of automatic cuts to physician reimbursements under Medicare…

[T]he details show how far the president is ready to push House Republicans. The upfront tax increases in the proposal go beyond what Senate Democrats were able to pass earlier this year. Tax rates would go up for higher-income earners, as in the Senate bill, but Mr. Obama wants their dividends to be taxed as ordinary income, something the Senate did not approve. He also wants the estate tax to be levied at 45 percent on inheritances over $3.5 million, a step several Democratic senators balked at. The Senate bill made no changes to the estate tax, which currently taxes inheritances over $5 million at 35 percent.

Here’s Peter Suderman’s idea of a commensurate counter-offer:

Two possibilities. One: Obama reeeeally wants to avoid the cliff, so he’s engineering some political cover for the other side to compromise. Ante up with a ridiculous bid, then pretend to let Republicans “win” by letting them negotiate him down to, say, “only” a trillion in new revenues. In order to believe that, though, you have to believe that O fears the cliff. Why would he? Polls show that Republicans will take most of the blame, which means not only will Obama have more leverage after January 1 (see my earlier post about that) but he can then blame any economic sluggishness over the next year or two or four on the GOP too. That might be the difference between a Republican Senate versus a Democratic House in 2014. Which brings us to two: He’s either indifferent about going over the cliff or now actively wants it to happen, and since he knows he can count on the press to scapegoat Republicans when it does, he’s decided to shoot for the stars with his “offer” and see how desperate Boehner is. Is the GOP sufficiently nervous about being called enemies of the middle class if a deal isn’t reached that they’ll cave on tax hikes on the rich in exchange for some smaller bundle of concessions, with this insane package the only other alternative on the Democratic side? That’s what O wants to see.

Exit question: Let it burn?

Update: NRO’s Dan Foster asks a good question:

We’re supposed to be paying down the deficit here, not squeezing the rich to fund Obama’s next government expansion. How much of this mega-soak is designed to do the former rather than the latter?

Update: Laughable, literally:

Mitch McConnell, the Senate Republican leader, says he “burst into laughter” Thursday when Treasury Secretary Tim Geithner outlined the administration proposal for averting the fiscal cliff. He wasn’t trying to embarrass Geithner, McConnell says, only responding candidly to his one-sided plan, explicit on tax increases, vague on spending cuts…

Geithner suggested $1.6 trillion in tax increases, McConnell says, but showed “minimal or no interest” in spending cuts. When congressional leaders went to the White House three days after the election, Obama talked of possible curbs on the explosive growth of food stamps and Social Security disability payments. But since Geithner didn’t mention them, those reductions appear to be off the table now, McConnell says.

Update: Via NRO, hard to argue with this.

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Buttercup on November 30, 2012 at 1:08 PM

Verb – do you kow what the tax rates were in 1980 – and what the unemployment and inflation rates were?

Just checking in. I hope to hell everyone is doing better than then. That isn’t a good argument. In fact it is an argument against what Obama wants to do.

Zomcon JEM on November 30, 2012 at 1:26 PM

What were the spending rates under Clinton again?

DeathtotheSwiss on November 30, 2012 at 1:28 PM

You don’t compromise with cancer(liberalism). You radiate it(Let. It. Burn.) till its dead, or you are.

StompUDead on November 30, 2012 at 1:59 PM

prolly around 17% of GDP SwissKiller, he had a couple of years where projected budgets would balance, we’re at about 25% now

DanMan on November 30, 2012 at 1:59 PM

Thank you, Dan!

You wouldn’t know off-hand what it would be if we went over the cliff, wouldja?

DeathtotheSwiss on November 30, 2012 at 2:08 PM

Tempting to say “I told you so”.

I remember back during the Debt Ceiling debacle when the GOP actually had some leverage; the “TrueCons” were saying it would be lunacy to vote for Boehners “Debt Deal”. They were right.

Of course, NRO, Ed, Allah & Co and the rest of the GOP Establishnment were all in favor of it.

And here we are.

Norwegian on November 30, 2012 at 2:57 PM

And here we are.

Norwegian on November 30, 2012 at 2:57 PM

And Lucy is teeing up the football again.

farsighted on November 30, 2012 at 2:59 PM

Let it burn. Make them own that.

$1.6 Trillion in taxes….. Yes, the average American will feel it and there will be consequences.

Let’s give it to them. And the speech from the GOP should be “since the American public clearly voted for these tax increases back on Nov 6, we see no reason to stand in the way.”

There needs to be a GOP voice reminding people this was Obama’s idea and no one stopped him.

goflyers on November 30, 2012 at 3:13 PM

You wouldn’t know off-hand what it would be if we went over the cliff, wouldja?

well if its 25% now, and growth slows to as high as zero while spending remains level it will certainly be higher just to service existing debt. Have interest jump as much as 1% and things will get real ugly real fast. That Moodys outfit will shut out the lights instead of worrying about credit worthiness of the big giant.

DanMan on November 30, 2012 at 3:15 PM

Let it burn? I guess that’s fine, but I hope no one’s under the illusion that when our nation goes bankrupt and poverty increases exponentially that that will somehow help Republicans. FDR was president for four years with unemployment sky-high at 25% when he was reelected by a sizable margin for a second term. He interpreted that as a mandate to take his socialist wrecking ball to our economy still further, and as a result, we entered a second depression in 1937–a depression within a depression. The Thirties is often considered a nadir in our country’s history, but as recently as a few years ago, I watched a History Channel special on the presidents which pronounced authoritatively that “Franklin Roosevelt was one of our greatest presidents,” and that he “saved our country” from the mistakes of Hoover.

Trust me, the scarier and more severe the coming crisis, the more Democrats will manipulate this to their advantage. And Bush will still be blamed fifty years from now for the hardships we will be enduring.

Burke on November 30, 2012 at 3:33 PM

It’s only “our” debt because they say it is. These politicians and bankers screw up over and over again and we’re left holding the bag.

It’s as if someone steals your identity, gets a new credit card in your name, runs up a $20,000 tab and you have to pay for it because they write the laws that say so.

Crooks. Plain old crooks.

Dr. ZhivBlago on November 30, 2012 at 3:33 PM

Burke on November 30, 2012 at 3:33 PM

Outstanding post!

However…I’d say let it burn also because at least back in FDR’s time things were different economically and we still had a huge industrial base. What do we have now?

The other side of it is that perhaps if this occurs under the auspices of the Socialist mafia, more and more Americans will start to realize what they’ve allowed to happen and that it’s not the way to go.

Dr. ZhivBlago on November 30, 2012 at 3:36 PM

Burke on November 30, 2012 at 3:33 PM

my conservative dad thought that about FDR until I showed him some passages from a book I found in his house called “The Roosevelt Myth” by John T. Flynn. That book is now available on Kindle for about $5 and it is the roadmap of Obama’s methods. Written in 1948 and updated in 1956.

FDR was absolutely agnostic when it came to economic policy. Didn’t care whether we were capitalist or socialist or whatever but being an accolyte of Woodrow Wilson he wanted to control it in as many aspects as possible. Henry Ford famously opposed FDR’s Blue Eagle program that allowed the government to dictate production. Destruction of the opposition party was his driving concern. Ideas meant nothing if it did not advance that notion.

The scene of him riding around with the cigarette holder in the back of an open car was his last public appearance. It was cold and damp in NY when he did it. It was also the only public appearance he made during his last campaign of 1944. He died about a month after his March 1945 inaugeration of heart failure but it was really brought on by pnemonia from that appearence.

DanMan on November 30, 2012 at 4:32 PM

Nothing from the yellow streaked liberal Capitalist Hog? Too embarrassed to comment anymore unless you plant some zinger on a buried thread? Brave!

Capitalist Hog, the only thing more ridiculous than your comments is your belief that people take them at all seriously.

hawkdriver on November 30, 2012 at 5:00 PM


Buttercup on November 30, 2012 at 1:08 PM

As you wish.

justltl on November 30, 2012 at 5:31 PM

Exit question is moot. Republicans will fold, with dreams of somehow turning it to their advantage in the midterms or even 2016. It’s simply in their nature. Charlie Brown and that football…

The Resolute Desk on November 30, 2012 at 1:36 AM

The exit question is not moot. This country, for better or worse, is now a full fledged democracy and in a democracy we have the power. You are right when you say the GOP will fold, but if the GOP won’t let it burn then we certainly can. Simply vote straight democrat tickets from now on. That’s what I intend to do.

DFCtomm on November 30, 2012 at 9:47 PM

the republicans better keep their guard up, what else is going to happen the 1st of Jan??? the affordable health care taxes are going to start to kick in earnest, is anyone going to distinguish what taxes are being part of the care or because of the fiscal cliff. don’t think so, the republicans will get the blame for all of it.

RonK on December 1, 2012 at 12:11 AM

Give the a$$ everything he wants and tattoo his name all over.
Oh yeah…LET IT BURN!!

askwhatif on December 1, 2012 at 2:29 PM

I think Obama works hard at exercising the George Costanza method of negotiating. The administration are escalating their agenda feeling the wind at their backs but they don’t understand the Republicans have no political capital to loose and can’t be intimidated. Right now they have nothing to gain from negotiating.

alQemist on December 1, 2012 at 9:29 PM