Republicans have been asking for the White House's plan for some time now -- well, they finally got one. Oh my:
House Republicans said on Thursday that Treasury Secretary Timothy F. Geithner presented the House speaker, John A. Boehner, a detailed proposal to avert the year-end fiscal crisis with $1.6 trillion in tax increases over 10 years, an immediate new round of stimulus spending, home mortgage refinancing and a permanent end to Congressional control over statutory borrowing limits. The proposal, loaded with Democratic priorities and short on detailed spending cuts, was likely to meet strong Republican resistance. In exchange for locking in the $1.6 trillion in added revenues, President Obama embraced $400 billion in savings from Medicare and other entitlements, to be worked out next year, with no guarantees. He did propose some upfront cuts in programs like farm price supports, but did not specify an amount or any details.
And senior Republican aides familiar with the offer said those initial spending cuts might well be outnumbered by upfront spending increases, including at least $50 billion in infrastructure spending, mortgage relief, an extension of unemployment insurance and a deferral of automatic cuts to physician reimbursements under Medicare … The upfront tax increases in the proposal go beyond what Senate Democrats were able to pass earlier this year. Tax rates would go up for higher-income earners, as in the Senate bill, but Mr. Obama wants their dividends to be taxed as ordinary income, something the Senate did not approve. He also wants the estate tax to be levied at 45 percent on inheritances over $3.5 million, a step several Democratic senators balked at. The Senate bill made no changes to the estate tax, which currently taxes inheritances over $5 million at 35 percent.
No wonder Mitch McConnell openly laughed at this outline; how else should one respond to a preposterous farce? Republicans should counter-offer in kind, demanding full Obamacare repeal, across-the-board tax cuts, the Wyden/Ryan Medicare plan -- and maybe toss in articles of impeachment just for kicks. Let's unpack the Times' report piece by piece:
(1) Obama is asking for $1.6 Trillion in tax hikes, double the number he and Boehner reportedly (almost) agreed upon last summer during the previous crisis. Not only does he want to raise marginal tax rates on "the rich," he's also shooting to raise capital gains and dividends taxes, too. According to NBC News, those revenues would amount to nearly $1 trillion. Then comes an undefined $600 Billion in unspecified "new revenue," presumably from tax increases to be named later. This element of the broader package alone is more than enough to tear the whole thing up and walk away.
(2) There are no guaranteed entitlement reforms. There are no specified spending cuts. Obama is willing to consider some "savings," but those would have to be discussed some other time in the future. This is what Obama fancies to be his "concession." And it comes in exchange for...Republicans agreeing to the taxmaggedon described in item #1. As I said, surreal.
(3) There's another stimulus in this puppy. Remember, this is supposed to be a deficit reductionplan, yet it calls for *at least* $50 Billion in new spending on infrastructure and other projects. As the Times reports, some aides on the Hill believe the plan's guaranteed spending increases could actually outnumber its (still unspecified) cuts (!)...
(4) Obama's proposal goes so far on investment and death tax hikes that even Congressional Democrats are looking at each other and slowly backing away.
(5) And, oh yeah, it abolishes the debt limit. Poof. Limitless "legal" debt for the federal government.
I understand that this is just an opening offer; both sides generally commence negotiations with a very robust ask, recognizing that they'll have to back down on certain elements at the bargaining table. But this isn't a starting point. It's an insult. Allahpundit is beginning to convince himself that Obama has joined the cliff-diving brigade and is therefore hoping to either (a) bully Republicans into a chain-reaction cave of epic proportions, or (b) make his demands so unreasonable that GOP leadership simply cannot relent, allowing him to stick them with the blame when the economy goes up in smoke. What should Boehner and McConnell do? Walk away, counsels Charles Krauthammer:
House Speaker John Boehner says there’s been "no progress” in the budget talks in the past two weeks. At this moment, Republicans in Congress need to examine which presents a more dire threat to the country: A) A double-dip recession driven by the sequester and the expiration of the Bush tax cuts, or the public's belief (verified through polling) that our giant debt, our ticking time bomb of entitlements, and our gargantuan government can be solved by "asking the richest Americans to pay a little bit more,” as Obama insists.
Option A is terrible, but Option B is the giant locked door blocking all of the real solutions. So if we must have tax hikes, let the tax cuts for every income level expire and let everyone of every income level pay higher taxes. Destroy the illusion among so many voters that they can get all the government they want without paying more in taxes.
Jim's core question is a difficult one. Is another painful recession (with Republicans likely getting pounded with blame) more or less harmful to the long-term interests of the nation than allowing the general public to cling for a little longer to the dangerously wrong belief that fiscal solvency is just around the corner, if only the rich may a tad more in taxes? Before you rush to answer that question, understand that the fallout won't occur in a political vacuum. If Republicans take the hit and get wiped out in 2014, we could have another 2009 on our hands, with no ability to block catastrophic liberal policy misadventures, which would plague the nation for decades to come. As I see it, GOP door number one is to negotiate earnestly and try to fashion the, um, least bad deal possible to avert the cliff (which assumes Obama isn't hell-bent on going over the side). I still think this is the likeliest outcome -- for now, at least. GOP door number two is walking away and bringing the pain, even if it means political disaster in upcoming cycles. That's the
This post was modified from its original form on 01 Dec, 6:24
approach Geragthy is kicking around. GOP door number three is stating opposition, but giving Obama what he wants via mass "present" votes. This might spare Republicans a political massacre, but it would also help The One continue the charade and superficially delay America's bitter medicine...which we're going to have to swallow sooner or later. Obama would just have to hope that the implosion comes sometime after January 20, 2017. Bad options, all.
UPDATE - I might have an idea for a potential door number four, which I'll flesh out in an upcoming post.
By Guy Benson
And there you have Obama's plan. I wonder how this would have gone over if it had been presented during the campaign. I can't believe that we have that many that would have approved this plan for our economy. If so, they deserve what they get but I resent all of the rest of us being punished with them. It is my Children and Grandchldren that will inherit this mess, along with all of yours. Where has this Country gone?
Really Dear Leader Obama and his merry band of Demagogues really want to go over the cliff when it means higher taxes for everyone who pay income taxes and huge defense cuts. There is no serious attempts by them at an agreement especially since they and their PR firm (the alleged "mainstream media") will blame the GOP. They will play on the class warfare theme of 'cutting taxes on the rich" even if the amount of money will make no difference in the total financial picture when spending is on autopilot since there is no budget. The GOP has two choices: pass an extension of the tax cuts in the House and send it to the Senate or let the Demagogues pass a bill raising taxes and don't vote for or against it and let the Demagogue's own the result. The focus should be hanging the decision and the results in the Demagogues and Dear Leader Obama since they have the final action in the matter anyway.
Agree John, 100%. I say, vote present and let the Democrats own this one on their shoulders alone. That is the best solution, I think anyway. We will recover from it, we always have, but don't take the fall is all I can say to the Republicans, let it sit on Obama and the Democrats 100%. They want it, they can own it.
Well, it could mean that my husband will lose his job because of the sequestration issue looming larger now than ever before. However, I happen to agree with both of you. Vote "present" like Obama did as a young Senator over 100 times and then he was elected President with absolutely no skin in the game.
I also agree because the republicans are endangered species and that is the plan.
They want control of the House of Representatives in 2014; this maliging of the GOP and constant touring to tout how wonderful Obama's new platforms are all PR campaign to further strengthen their party and power.
If the republicans give in to any of this they are complete fools. I cannot believe how brazen and ignorant Geithner is. Don't the liberals give a flip about our country's future? And "mortgage financing?" What a waste of taxpayer dollars. Obama and his gang of numbnuts are the very reason the real estate market is still lagging behind because they tampered with the natural recovery of the real estate market! Everything they did failed and prolonged the natural recovery. Now they want to do it again!