The good news? This new tedious fiscal standoff may yet be resolved by New Year’s. The bad news? Another tedious fiscal standoff is just a few months away.
House Speaker John Boehner privately told President Barack Obama that he’s prepared to consider more than the $800 billion the GOP has already proposed in new tax revenues — but only if the White House will back much deeper cuts to entitlement programs, according to several sources familiar with the talks…
With this stalemate, Republicans are starting to ponder a Plan B: Extend the Bush-era rates for families who earn less than $250,000 and then reopen the debate on taxes and entitlements next year, when the nation heads for the debt limit again.
“The White House hasn’t come up with close to enough spending cuts and reforms to be worth $800 billion in additional revenue, let alone the — substantial — additional cuts and reforms that would be required for more than that,” according to a Republican leadership aide…
If [Republicans choose Plan B], Obama would almost certainly get his wish: Congress would approve an extension of the Bush-era tax rates for families with annual salaries less than $250,000, and a tax hike from 35 percent to 39.6 percent for income above that amount. And Republicans would live to fight another day: demanding spending cuts to Medicare, Medicaid and Social Security when Obama formally requests an increase to the national borrowing limit to avoid a debt default.
Raul Labrador said today that he’d consider more tax revenue too — as part of a three-to-one cuts-to-taxes deal, which the White House isn’t remotely interested in. So Plan B it is, which would be a dismal end to a dismal year but at least would eliminate the leverage Obama currently holds by virtue of the automatic January 1 tax hikes. Pass Plan B and get taxes off the table and then you can steer the debate entirely over to entitlements ahead of the next debt-ceiling hike next year, when the GOP will — theoretically — have more leverage.
I say “theoretically” because their leverage depends not only on being willing to hit the debt ceiling this time if Obama balks at deep entitlement cuts but being willing to identify specific cuts which the Democrats will then spend weeks demagoging as part of another bout of Mediscare. Think Republicans have it in them? They’ll be moving from the politically unpopular position of opposing tax hikes on the rich to … the politically unpopular position of demanding less spending on Medicare and Social Security. What could go wrong?
Here’s Krauthammer, as fatigued by, and disgusted with, the unseriousness of this endless cycle of debt gridlock as I am. Exit question: If the GOP really is going to go for Plan B, isn’t it better to come clean about that now and use the last few weeks before the cliff to pressure Obama on spending? “Yes, okay, we’ll give you your tax hikes on the rich, reluctantly. Debate over. Now what will you do for us?” Click the image to watch.