Friday, December 14, 2012

Cutting Through the Fiscal Crap

Last time we checked on the "Fiscal Cliff" fiasco in Washington, the G-O-TEA was threatening yet another round of fiscal hostage taking. Yesterday, we saw President Obama and US House Speaker John Boehner (R-Scared Orange) meet in The White House. And yes, the great kabuki theater over taxes and internal G-O-TEA strife continues.

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Oh, and Senate Majority Leader Harry Reid (D-Badass) is having no more of it.

“With every passing day the Republicans are calling on Speaker Boehner to guarantee tax cuts for the middle class,” he said Thursday.

Reid counts his latest conquest in Sen. John Cornyn of Texas, set to be the Republicans’ second-highest ranking Republican next year after Sen. Jon Kyl of Arizona retires.

Cornyn said this week that he believes that Congress will have to pass the Democrats’ proffer, a bill to extend lowered tax rates for income levels up to $250,000 only, “sooner or later,” since the end-of-year deadline didn’t leave them much choice: After December 31, those tax rates will rise, along with those for the wealthier tax brackets, anyway.

“More than three-quarters of the American people, including 61 percent of Republicans, agree with John Cornyn that the middle class shouldn’t be held hostage to move giveaways for millionaires,” Reid said. [...]

“To this day Republicans have not identified five cents in actual money,” Reid said. “They speak in generalities.

“Entitlements? We looked at that. The Affordable Care Act? We looked at that...we know we’ll have to do some [cuts], we’ll be glad to do that and it’s part of what we need to do,” Reid said. “If we had some movement on those rates, the president has said he’s willing to take some significant action.”

Here's the problem for Republicans on Capitol Hill: They're losing. A strong majority of Americans essentially support the Democratic budget plan. And they see that President Obama is actually negotiating on good faith while the bulk of Republicans are not. Oh, and the Republican plan is so politically toxic that most Republicans don't really want to be seen pushing it. After all, remember what happened to Mitt Romney and Paul Ryan just last month!

Interestingly enough, a growing number of Senate Republicans are ready to cut a deal and keep Americans from "falling off The Cliff". Yet even while they're ready to put this to an end, most of their G-O-TEA colleagues would rather take America for a "Cliff Dive" than compromise. Yes, they're really that delusional.

The single greatest obstacle to a fiscal cliff compromise remains the House GOP’s refusal to agree to a single additional penny generated by higher tax rates on the rich. Even Senate Republicans are increasingly acknowledging this —and the damage it’s doing to the party. Indeed, the Senate GOP is now trying to throw the House GOP a lifeline. But the House GOP is pushing it away.

The Post reports that Senate Republicans are quietly floating a compromise: They would allow tax rates on the rich to go up, while nixing other revenue-raising ideas the White House wants, such as higher rates on investment income and putting limits on itemized deductions. This would lower the revenue price tag on the compromise, supposedly making it easier for Republicans to accept a hike in rates. It would produce $440 billion in new revenues —half of John Boehner’s original $800 billion offer —so it’s hard to see what this would accomplish. But at least Republicans would be giving ground on rates.

House Republicans, the Post reports, promptly shot this down. It’s not hard to see why: As Real Clear Politics put it: “many House conservatives who represent safe GOP districts remain philosophically and politically wary of voting for higher taxes or conceding to Democrats.” [...]

[... I]ndeed, for some conservatives, there’s no need to acknowledge that the election happened. I don’t know if this applies to Rep. Harris, but in a general sense, as I noted here yesterday,many of them retain strong incentives to stand by positions that have been rejected by the broader electorate, thanks to safely drawn districts where voters agree with them, and the prospect of praise from conservative interest groups and right wing media as a reward for any refusal to compromise with Dems. The result: A schism may be developing between Senate and House Republicans, one driven by the plain fact that Senate Republicans are increasingly recognizing reality —tax rates on the rich must go up —and House Republicans aren’t.

Again, the "TEA" fueled House Republicans are the problem. And yes, John Boehner is afraid of setting a vote on a "Fiscal Cliff" averting deal on the House floor because most of his House Republicans won't support it. And yes, that's because he's more afraid of losing his Speaker's Gavel than he is of sending America back into recession and immense economic pain.

So as long as Boehner keeps watching his back and the G-O-TEA refuses to engage in any kind of responsible governance, this "Fiscal Cliff" kabuki theater will continue. It's just a matter of who finally strong-arms House G-O-TEA leaders into scheduling a floor vote on a truly balanced budget deal so that the words "double dip recession" can finally be stricken from the lexicon of American economists as they appear on TV.

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