[P]olitics is being reborn. For a time, Republican candidates like Richard Mourdock of Indiana proudly declared that they didn’t believe in compromise. Political activists spent more time purging deviationists than in trying to attract new converts.
But that mania has passed. There are increasing signs that House Republicans are willing to unite behind Speaker John Boehner so he can cut a deal to avert the “fiscal cliff.” There has been an epidemic of open-mindedness as Republicans try to win minority votes and create a version of their party that can be competitive in states like Connecticut and California…
The Republicans may still blow it. If President Obama is flexible and they don’t meet him partway, Republicans would contribute to a recession that would discredit them for a decade. But they are moving in the right direction and moving fast. These are first steps, and encouraging ones.
Conservatives shouldn’t be so hard on Boehner. He’s trying to deal with post-election realities and sincerely believes voters want a compromise. Worth noting, prominent conservative House leaders, like Eric Cantor, Kevin McCarthy, and Paul Ryan, are standing behind Boehner.
On the other hand, senior House leadership aides are not happy with Senate Republican leader Mitch McConnell. Apparently, McConnell and Majority Leader Harry Reid are ready to do a two-stage deal if the Boehner-Obama talks collapse. The first stage would extend middle-class tax rates and somehow compromise on upper-end rates. Then a process would be set up to produce spending cuts to replace the sequester. But House aides regard this as a nonstarter, one that could even undermine the Boehner-Obama talks.
Here’s the really big principle in all this: Why raise taxes at all in the worst economic recovery going back to 1947?
Talk to smart folks in Washington, and here’s what they think will happen: The final tax deal will raise rates a bit, giving Democrats a win, but not all the way back to 39.6 percent, giving Republicans a win. That won’t raise enough revenue on its own, so it will be combined with some policy to cap tax deductions, perhaps at $25,000 or $50,000, with a substantial phase-in and an exemption for charitable contributions.
The harder question is what Republicans will get on the spending side of the deal. But even that’s not such a mystery. There will be a variety of nips and tucks to Medicare, including more cost-sharing and decreases in provider payments, and the headline Democratic concession is likely to be that the Medicare eligibility age rises from 65 to 67.
That’s not a policy I like much, but New York magazine’s Jonathan Chait accurately conveys the White House thinking here: They see it as having “weirdly disproportionate symbolic power,” as it’s not a huge (or smart) cut to Medicare benefits, and most of the pain will be blunted by the Affordable Care Act. But Republicans and self-styled deficit hawks see it as a big win.
The “fiscal cliff” coming on Dec. 31 will automatically cause everyone’s taxes to rise and draconian defense cuts to go into effect. That leaves Republicans and conservatives having to fight a very public battle on these matters only weeks after a national defeat.
And they’ve somehow been maneuvered into arguing that benefits must be cut and taxes on the wealthy must not be raised — without having a single populist argument in their favor.
The only one that comes close is the invocation of the pain small businesses will experience from a tax hike. Fine, but unless you yourself are a small businessman or employed by one, you might not care all that much.
Thus, the political movement that came to maturity by advocating for dynamic American optimism has morphed into what it was at its most pinched and parched in the 1950s, ’60s, and ’70s: the eat-your-vegetables-and-shut-up party.
Republicans, as I have recently argued, have a great deal more to offer the country than tax cuts. They might ask: Do we wish to see our country’s energy sector continue to grow, and to see America displace Saudi Arabia as the world’s largest oil producer? The country will answer “Yes,” and Republicans should be ready with a list of specific policies to ensure that this happens. Republicans might ask: Do we wish to create a great many more solid career opportunities for the very large share of our young people who are not headed for MBAs, law degrees, or information-technology jobs? The country will answer “Yes,” and Republicans must be ready with a solid policy agenda. Ask the country if it wants to end subsidies to politically connected businesses, and it will answer “Yes.” Be ready. Instead, Republicans have been asking if the country is ready to put everything on hold to forestall a relatively small tax hike for households with incomes approaching $400,000 and up, and the country has answered “No.” The country is wrong to want to raise taxes for reasons having to do more with envy than economics, but certain human realities have to be accounted for in politics.
As for the more difficult questions, such as whether the country will protest if the Republicans attempt to reform entitlements by changing the indexation benchmark from wages to prices — a reform that would save billions of dollars without actually cutting the current benefits of one person — the answer is not obvious, but then that is the nature of hard questions. But it will be easier for conservatives to do the hard thing if they have an agenda that emphasizes the great many relatively easy and popular proposals that conservatives can and should support. But that is going to take deft and imaginative leadership of a sort that we have not lately seen from Republican leaders. John Boehner has not been the catastrophe that many fiscal hawks accuse him of being, but it is not clear that making the best of a bad hand is the most we can or should hope for.
The Republicans’ offer has $300 billion in cuts to discretionary spending over 10 years. Well, the U.S. government’s outlays in October alone were $304 billion.
The GOP offered $600 billion in 10-year health care cuts through Medicare and Medicaid, which is less than Obama was willing to risk as seed money for Obamacare. Then again, the president’s new budget only reduces Medicare and Medicaid spending by $340 billion over a decade. Democrats have no interest in reform.
Our potential unfunded liabilities, what our government has promised to spend on entitlement programs in the future and won’t have money to pay, are estimated to total anywhere from $87 trillion to $100 trillion. That doesn’t even include Obamacare’s unseen costs.
Fiscal cliff? We’ve already taken that dive.
“This is no time to add any additional burden for middle-class people,” Biden said, seated with his guests at a table after the meal had been cleared.
“It would take 15 minutes from the time the decision was made by the speaker of the House to pass and make permanent a middle-class tax cut,” he said. “The president would probably have me sprint up to the Hill to bring the bill down and to sign it.
“It can be done like that,” he said, with a snap of his fingers.
Click the image to watch.