The nation stands at the precipice of a tragedy. Progressive icon Paul Krugman fears that a horrifying vision of the future may come to pass. In this nightmare scenario – and I’d like you all to take a seat and quaff some sedatives here – Barack Obama may sell the liberal agenda down the river and not get everything on the Unicorn Wish List.
I Hope This Isn’t True
Ezra Klein says that the shape of a fiscal cliff deal is clear: only a 37 percent rate on top incomes, and a rise in the Medicare eligibility age.
I’m going to cross my fingers and hope that this is just a case of creeping Broderism, that it’s a VSP fantasy about how we’re going to resolve this in a bipartisan way. Because if Obama really does make this deal, there will be hell to pay.
Can you imagine the horror? The tax rate on the wealthy may only go up to 37% and – gasp – there may have to be adjustments to entitlement programs. What would happen to America? I mean… Obama won the election! Krugman has to get everything he wanted, right? How could this travesty take place?
Republicans are divided. President Obama won’t budge. And more and more, it looks like the fiscal-cliff deadline of December 31 will be missed.
It’s now clear that Team Obama wants higher tax rates and revenue-raising tax-deduction caps to meet their $1.6 trillion revenue target. Spending cuts and entitlement reforms are vague to non-existent. In fact, it could be that Obama not only rejects the across-the-board budget sequester, but that he actively seeks to raise spending, not cut it.
I guess it stands to reason that if you puff up his $800 billion revenue increase from last year, and double it to $1.6 trillion this year, the money will be spent. The government will grow larger.
All this should be unacceptable to the GOP.
Molly Ball has an even more lengthy explanation of how Obama is about to be Lucy With the Football to progressives, even as conservatives fret that that John Boehner has sold them down the river. Of course, the fact is that nobody is going to be happy with any deal which flops out of the sewer grates before the end of the year.
As I’ve written since the election, Obama has no reason to seek a deal early. And any deal which the Speaker signs off on is going to tick off the entire conservative base. So who is going to be happy? Nobody. But does this mean that everyone lost? Or did we get the only morsel left on the plate left worth eating?
Your guess is as good as mine at this point, but the fundamental question for me really hasn’t changed. It still looks to me like Obama is more than willing to ride this raft over the falls if he doesn’t get some sort of an increase in marginal rates on the wealthy. He said it at virtually every campaign stop. And a month after he’d won that last election he’ll ever need to compete in, he’s still making stops around the country, taking the same message directly to his base. But what do we get in exchange, assuming that John Boehner somehow manages to find enough Republicans to swallow a 37% tax rate?
It’s got to be entitlement reforms with some significant savings, done in a way that can substantially decrease the drag being put on the nation’s fiscal future. And it obviously can’t be some sort of ambiguous, “give us the tax hikes now and we’ll definitely talk about entitlement reform next year after you also give us the debt ceiling increase.” If that’s the deal, there may as well be nothing on the table at all. Of course, in that event, there won’t be enough GOP votes for it anyway. Or at least I’d like to think there wouldn’t.