The deadline for resolving the fiscal crisis could be much closer than previously thought.
Because of the head-spinning legislative logistics involved in crafting and passing a bill, congressional Republicans and the White House really would have to get the ball rolling on a deal this week if they want to pass something by Jan. 1…
Even if Obama and Boehner somehow strike a deal by mid-week, it would take several days to write the legislation and additional time to send it over to the Congressional Budget Office so they can estimate how much deficit reduction it entails…
From there, both sides would have to get to work selling members of their own party on the package. This would be no easy feat.
The White House and House of Representatives Speaker John Boehner’s office held more negotiations on Monday on ways to break the “fiscal cliff” stalemate, although neither side showed any public signs that they were ready to give ground…
“I think the atmospherics are getting so much better. We have kind of gotten out of Kabuki theater and gone to dancing the tango,” [Erskine] Bowles told CNBC on Monday. “Any time you start to tango you’ve got a chance.”
Bowles said he did not expect the president to give in on his demand that taxes rise for the top 2 percent of earners.
“I would almost guarantee that rates are going to go up for people in the top 2 percent,” he said.
“My constituents want me to stand firm on cutting spending. I campaigned on that issue. That’s why they elected me,” said Representative Ted Poe, Republican of Texas, who won re-election with 65 percent of the vote. “I don’t see any scenario where raising tax rates, in any combination of compromise, will solve our problem.”…
“Another series of robocalls or fliers or TV ads are not going to change the opinion of my constituents,” said Representative Scott Garrett, Republican of New Jersey, who won more than 55 percent in November but still drew the Democratic Congressional Campaign Committee’s attention Monday.
Of course, any rate increase for Republicans — one that rank-and-file lawmakers could back and defend — would have to come with serious cuts to entitlement programs. And there’s no evidence President Barack Obama and Democrats have given in on any specific entitlement cuts in closed-door negotiations — especially enough to offset a rate change and an increase in the threshold for the rich.
“Both sides have to hold hands and jump on this one,” said a top Senate aide…
Democrats believe they are dealing from a place of strength in these negotiations and are unlikely to give up concessions on entitlement programs without big moves by Boehner.
“We are winning,” said a top Hill Democratic staffer. “We don’t have to give up on anything yet.”
For Democrats, it’s easy to see what victory means: getting Republicans to raise taxes on the rich. For Republicans, it’s less dramatic. The outer edge of what they could get from Obama would be an increase in the Medicare eligibility age from 65 to 67 — maybe with some expanded means-testing of Medicare premiums for the wealthy. (There’s already some of that in Obama’s own health care reform law and in the 2003 law that created the Medicare prescription drug program.)…
“These are all good ideas … but they’re not transformational. You just can’t say, ‘Whew, we fixed it for the next generation.’ You just can’t say that,” said Douglas Holtz-Eakin, president of the American Action Forum and another former McCain adviser.
“You wanted steak, and you ended up with reheated hamburger,” Holtz-Eakin added.
So what’s the best thing to do with reheated hamburger? Prepare your base by lowering the expectations.
The Journal editors believe that after January 1, when taxes will have gone up for everyone, House Republicans will block Democratic legislation that would cut taxes—that would restore the lower 2012 rates for the vast majority of taxpayers, fix the Alternative Minimum Tax, and for that matter would probably offer a compromise on dividends and the death tax better than what will be the new dividend rate of 39 percent and death tax of 55 percent with a $1 million exemption.
Will Republicans really oppose such legislation? President Obama will be beating the drums for this tax cut. Senate Democrats will pass this tax cut. If Senate Republicans vote against it, it won’t be “Senate Democrats running for re-election in 2014” who will have a tax hike on their resumes. It will be Senate Republicans who will have voted against cutting taxes. And if House Republicans block such legislation, it will be they, and they alone, insisting on higher taxes.
Of course they won’t. Republicans will fold with lightning speed after we go over the tax cliff on January 1. Which is why the third of the Journal editorial’s three key paragraphs is moot. If we go over the cliff, there won’t be damage to Obama’s chances of second-term success. Quite the contrary. What Republicans will have done is to make Democrats the party of tax cuts and Obama a president fighting for economic growth.
This is why more and more Republicans are beginning to realize that just giving President Obama what he wants on rates, and then going home, could be the best possible fiscal cliff outcome. Such a move would: 1) deny Obama more stimulus spending; 2) deny Obama the ability to move on to amnesty; 3) deny Obama a ‘grand bargain’ for his legacy; and 4) preserve conservative leverage over spending by not raising the debt ceiling.
Obama spent the entire campaign saying all he wanted was for the rich to pay a little more by returning to the Clinton rates. He could never refuse to sign such a bill if House Republicans passed one. Plus, it would be a huge conservative victory of 98 percent of the Bush tax rates were made permanent. How could anything Boehner might get out of Obama be any better?
STEP THREE: Pass your plans. If the president refuses to negotiate and no progress is made by February, inform him that you will attach all or part of your plan to legislation raising the debt limit and pass it in the House. Then do so. Obama will sign it. Here is why:
Unlike with the fiscal cliff, Republicans have all the leverage when it comes to the debt limit. Today, Obama is perfectly willing to go over the fiscal cliff and blame the GOP for the resulting tax increases on the middle class. But when it comes to the debt limit, he does not have that luxury. He can’t default on our debt — the consequences are too catastrophic. So in the end he will cave.
Indeed, he would have caved during the last debt-limit stand-off, in the summer of 2011. According to Bob Woodward, when Obama told his advisers he intended to veto the debt-limit bill the Republican-controlled House had passed, Treasury Secretary Tim Geithner told him he couldn’t — that if Republicans didn’t give in, he had no choice but to sign their bill. “You can’t veto,” Geithner reportedly told Obama, because the consequences “would be indelible, incurable. It would last for generations.”
“Let It Burn” is about inaction. There’s no point in trying do anything that avoids going over the fiscal cliff/sequestration. Remember, the deal that got us to this point was agreed to by House Republicans, Senate Democrats and signed by Obama. That’s as bi-partisan as it gets. I’ve heard from squishy low information voters, Obama and the media that “bi-partisan problem solving” is the Holy Grail of politics. Well, here it is.
Will it lead to massive disruptions? Yes. That’s the point. The current system is rigged against conservative[s]. We should play no part in its perpetuation. If you can’t win the game, concede and start new one. That’s the heart of Let It Burn.
This isn’t some petty “I lost so I’m taking my ball and going home” tirade. This is what people want. It’s simply not sustainable. If we can’t stop them, we don’t have to continue to enable them either.
Click the image to watch.