Green Room

John Boehner … super-genius?

posted at 12:35 pm on January 29, 2013 by

So argues Ralph Benko at Forbes, in a column yesterday that takes a (ahem) different view of the strategies employed by the House Republican caucus and the Speaker over the last few weeks.  Benko may score on a few of his points, too:

In retrospect, at the Battle at Fiscal Cliff, Boehner took President Obama to the cleaners. He did it suavely, without histrionics. While Obama churlishly, and in a politically amateurish manner, publicly strutted about having forced the Republicans to raise tax rates on “the wealthiest Americans” Boehner, quietly, was pocketing his winnings.

Dazzled by Obama’s Ozymandias-scale sneer most liberals failed to notice that Boehner quietly made 99% of the Bush tax cuts permanent. As Boehner himself dryly observed, in an interview with TheWall Street Journal’s editorial board member Steve Moore, “”Who would have ever guessed that we could make 99% of the Bush tax cuts permanent? When we had a Republican House and Senate and a Republican in the White House, we couldn’t get that. And so, not bad.’”

That’s true, but it doesn’t take into account the GOP pledge to never raise taxes.  Republicans had argued that tax hikes would damage the economy, cost jobs, and drive down overall revenue, but they effectively lost that argument in the presidential election anyway.  Democrats committed a couple of years ago to permanent extensions of the other rates.  At best, this was a narrow loss, especially if the higher taxes drives down investment and pushes capital outside of the US.

Benko makes a great point about the AMT, though:

Yet his biggest win may have been in making the Alternative Minimum Tax patch permanent. This changes the baseline with profoundly positive implications for future tax reform and economic growth.

Boehner thereby won a triple jackpot, a bonanza for conservatives and supply-siders … while Obama, giving up all that for a trivial symbolic victory, lost his Progressive shirt. The mainstream media, with a few exceptions such as Howard Kurtz at the Daily Beast, was too deep in the tank to report that the Emperor has no clothes.

That much is true.  No longer can Congress or the White House pretend to “cut” taxes by assuming an AMT patch won’t happen, and the CBO won’t have to project revenues without an annual patch.  It would be akin to statutorily eliminating the “doc fix” in order to get an honest analysis of Medicare/Medicaid costs, rather than the easy manipulation provided by the statutory ambiguity.

Benko then predicts even bigger victories ahead for Boehner:

The Democrats, apparently, still don’t know what Boehner has hit them with. Thanks to the Sequester anti-profligacy conservatives now negotiate from strength. What are the implications of putting the Sequester fight before the debt ceiling fight? Steve Moore:

“The Republicans’ stronger card, Mr. Boehner believes, will be the automatic spending sequester trigger that trims all discretionary programs—defense and domestic. It now appears that the president made a severe political miscalculation when he came up with the sequester idea in 2011.

“As Mr. Boehner tells the story: Mr. Obama was sure Republicans would call for ending the sequester—the other ‘cliff’—because it included deep defense cuts. But Republicans never raised the issue. ‘It wasn’t until literally last week [columnist’s note: just before the deadline] that the White House brought up replacing the sequester,’ Mr. Boehner says. ‘They said, ‘We can’t have the sequester.’ They were always counting on us to bring this to the table.”

“Mr. Boehner says he has significant Republican support, including GOP defense hawks, on his side for letting the sequester do its work. ‘I got that in my back pocket,’ the speaker says. He is counting on the president’s liberal base putting pressure on him when cherished domestic programs face the sequester’s sharp knife. Republican willingness to support the sequester, Mr. Boehner says, is ‘as much leverage as we’re going to get.’”

I agree that Boehner has maneuvered into better position, but I think I’ll wait to see what he does with it before popping the bubbly.

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