Topic: fiscal cliff

Time-Out May Be the GOP’s Best Option

Jonathan S. Tobin 01.18.2013 - 10:00 AM

The top news out of the House Republican retreat in Williamsburg, Virginia is that the party is considering a short-term extension of the debt limit in order to give the party more time to try and convince their Democratic antagonists to start cutting spending. The proposal, which according to the New York Times, is being floated by Rep. Paul Ryan, could wind up connecting the debt ceiling issue with the deadline for the implementation of sequestration that would mandate devastating across-the-board spending cuts. That would theoretically give the GOP some room to maneuver in order to avoid a confrontation with President Obama that few think they would win. But it is hard to avoid the impression that the main object of a delay would be to deal with the Republicans’ biggest problems: a lack of unity.

Like a sports team in disarray, the GOP needs a time out where they can catch their breath and somehow get on the same page with each other. As the votes over House Speaker John Boehner’s Plan B and then the final fiscal cliff deal revealed, the party is badly split between those who don’t want to give an inch on spending and taxes, those who think that compromise with the president is inevitable and those who believe the best the party can do is to speak out for its principles and oppose tactics that will blow up the economy and help demonize the party. But the problem for the Republican leadership is that even if they can buy themselves some more time to get their fractious caucus in line, the likelihood that a confident and aggressive President Obama will either accept a short-term extension or deal honestly with them on the issues.

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Barack Obama, Negotiator

John Steele Gordon 01.15.2013 - 4:55 PM

At his press conference yesterday:

The president demanded that the Republicans surrender their most powerful bargaining chip—the debt ceiling—first and then “I’m happy to have a conversation about deficit reduction.” Translation: Give me everything I want first and then we’ll talk.

He threatened that “If congressional Republicans refuse to pay America’s bills on time, Social Security checks, and veterans benefits will be delayed.” Translation: I’ll choose not to pay the bills that will cause maximum political blow-back and the mainstream media will see to it that the Republicans bear all the blame.

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GOP Can Start Reining in the Debt

Jonathan S. Tobin 01.08.2013 - 6:20 PM

Democrats had good reason to celebrate President Obama’s victory in the fiscal cliff. The House Republican caucus wasn’t just routed; it was nearly torn apart, leading some observers as well as many of the president’s supporters to suppose that this was just the first of a series of triumphs in which their liberal agenda will be imposed on the nation as the GOP fades into insignificance. Perhaps they actually think the president can get away with making the deficit or the debt ceiling go away by merely minting a trillion-dollar platinum coin. But like other triumphalist predictions from both parties in the last decade, such expectations are bound to lead to severe disappointment. Republicans remain in control of the House and any idea that the president can impose further tax increases on the nation while failing to address the need for entitlement reform that is necessary to solve our long-term fiscal crisis is pure fantasy. That’s why so many on the left are pushing hard right now to persuade Republicans to give up the one clear piece of leverage they have over the budget process: the need to raise the debt ceiling within the next two months.

As Pete Wehner wrote last week, using that upcoming deadline to force the president to give in on spending cuts is a perilous enterprise. Past attempts to hold Democrats’ feet to the fire on the budget in this manner have failed miserably. Nevertheless, as I pointed out on Sunday, unilateral surrender on the debt ceiling is not an option for Speaker John Boehner. They must fight not only for the sake of the cause of fiscal sanity but to avoid a meltdown of their caucus that will strengthen the ability of Democrats to get their way on taxes and spending and lessening their own chances of a comeback in 2014. The question is how to do so without being seen as irresponsible hostage takers who don’t care about the damage a government shutdown would have on the economy. A number of ideas are floating around, but Dick Morris floated one yesterday in the Hill that is worth considering: phasing in limited debt ceiling hikes that would avoid a government shutdown but would not be enough to allow the president to avoid having to negotiate on entitlement reform and other spending issues.

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Liberals’ Idea of Tax Reform Shows Who Are the Real Extremists

Jonathan S. Tobin 01.07.2013 - 5:50 PM

President Obama made it clear he wasn’t going to be satisfied with the tax increase on upper income earners that he forced on Congress during the showdown over the fiscal cliff. Though in fact all wage earners suffered a loss this week as the payroll taxes surged, the president and his liberal supporters are determined to inflict even more pain on more people in any upcoming budget talks. However, one of the leading advocates for the president’s redistributionist position, the New York Times editorial page, is worried that in settling for a deal that raised taxes on those earning more than $400,000 a year, he has made it harder for the left to foist another job-killing tax increase on the country. So, to make this bitter pill easier for Americans to swallow, the Times claims that plans to confiscate more private income for government use is actually “reform.”

Leaving aside the fact that trying to squeeze more revenue for the government out of taxpayers won’t do much, if anything, to avert the budget crisis, the use of the word reform in this context is straight out of Orwell. Reform implies making the system fairer, which for some on the left is synonymous with soaking the rich. But a genuine reform of the system is one that will incentivize achievement, not penalizing it as well as making the labyrinthine code simpler and more understandable. But when liberals use this word it is merely code for policy driven by left-wing ideology and not pragmatism or the country’s economic health.

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The Next Fight: Tea Partiers v. Hawks on Defense Cuts

Alana Goodman 01.07.2013 - 2:20 PM

The Hill reports that the defense industry is anxious the fiscal cliff tax deal may increase the likelihood of Pentagon cuts:

The defense industry is worried last week’s budget deal on taxes could damage its negotiating position for the next “fiscal cliff” deadline two months from now, when across-the-board spending cuts would take effect.

The deficit debate is shifting from taxes toward spending cuts and the debt limit, where there will be more of a focus on new cuts to the Pentagon.

While the first fiscal cliff fight over taxes included the threat of massive across-the-board spending cuts, the sequel is going to be nearly all about where to cut spending. The Pentagon is the largest target outside of entitlements. …

Some defense analysts say that the shift in the Republican Party away from national security, with the rise of the Tea Party, was highlighted during the fiscal-cliff negotiations, where taxes trumped defense in importance. …

“Other issues have overtaken national security as being more important,” said Mackenzie Eaglen, a defense analyst at the conservative-leaning American Enterprise Institute.

“I think it does show how the Republican Party is no longer the party of national security, no longer a big-tent party of Reagan Republicans where a strong defense was a central tenet of conservatism.”

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The GOP Can’t Surrender on Debt Ceiling

Jonathan S. Tobin 01.06.2013 - 2:45 PM

On Friday, my friend and colleague Peter Wehner wrote about the question of how the Republican Party can avoid a repeat of the fiscal cliff debacle in the upcoming months as a new deadline for raising the debt ceiling looms. Throughout the last few weeks, Pete has been spot-on in his analysis of what he rightly called the Republicans’ “losing hand” as President Obama and the Democrats forced them to accept a terrible fiscal cliff deal. Though some think the debt ceiling discussion will be very different from the cliff debate, Pete fears the GOP is headed down the same path and will suffer if they allow themselves to be portrayed as holding the country hostage again. To avoid that accusation as well as what he accurately describes as the futile pretense that the president will negotiate in good faith, he advises that they preemptively take the debt ceiling issue off the table sooner rather than later.

There is much to be said for this point of view, but I don’t believe Republicans can or should do as he says. If the Republican majority in the House of Representatives were to concede on the debt ceiling now they might as well just go home and let the Democrats have their way without the fig leaf of a debate. Doing so would tear the party apart and lessen rather than enhance their chances of winning in the 2014 midterms. Though Pete is right about the calamity of a rerun of the GOP fiascos of 1995 and 2011 and 2012 when they were beaten in such confrontations, there is more than one way to lose a political fight. As much as House Republicans need to worry about being marginalized as extremists who are willing to allegedly sabotage the economy to make an ideological point, they also need to worry about playing the role of the pliant opposition that is unable and unwilling to offer a stark alternative to the Democrats.

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How to Prevent Another GOP Debacle

Peter Wehner 01.04.2013 - 4:50 PM

It’s certainly true that negotiations over how to avoid going over the fiscal cliff were particularly difficult ones for Republicans. President Obama had a huge negotiating advantage: If a deal wasn’t struck, taxes would go up on everyone, not just the high-income earners, and the military would be decimated by deep spending cuts. Presumably Republicans will be in a stronger position as we approach our next governing crisis: the debt ceiling deadline in early March.

There is a twin danger for the GOP, however. One is that they enter negotiations assuming the president is responsible and acting in good faith—and that a “good government” solution will be found and a grand bargain will be struck. That’s not going to happen. Mr. Obama is a dogmatist and a committed progressive. He has no interest in reining in spending or reforming entitlements. He wants to, in his words, “transform” America. And he has a burning desire to destroy the GOP.

The second danger facing Republicans is they once again engage in brinksmanship with the president—that they elevate the debt ceiling debate and (unwisely) threaten to allow the United States to default right up until the moment when they cave (which they would be forced to do).

My counsel to them would therefore be to take the threat of default off the table sooner rather than later. (One way to do this would be to pass legislation that increases the debt limit for, say, six months at a time.) Republicans should simultaneously put forward reasonable and realistic cuts to offset the increase in the debt limit, in the hope that they can secure some gains. Which leads me to my broader piece of advice.

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Mr. Obama’s Planet

Rick Richman 01.04.2013 - 2:40 PM

Saul Bellow used to joke that while the unexamined life is not worth living, the examined life will make you wish you were dead. The political equivalent might be that we can’t live with taxation without representation, but taxation with representation is going to kill us.

By “us,” I mean those of us who like to find out what’s in a bill before Congress passes it; who would like our representatives to read bills before they vote on them; who want to see hearings on legislation before it is brought to a vote; and who would like to have it posted on a website for a few days before it is signed into law–just in case we have some questions after we find out what’s in it. For such people, Senator Rand Paul’s description of the Senate’s action in passing a $600 billion tax increase this week will be discouraging:

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Prime Minister Biden on the Upswing

Jonathan S. Tobin 01.03.2013 - 1:55 PM

Among the big winners of the resolution of the congressional fiscal cliff debacle was Vice President Joe Biden. Rather than being relegated to funeral duty by a president who initially had little use for him, Biden’s decades of experience on the Hill have proven to be an invaluable resource in this administration. Since neither the president nor his top aides have any talent for or even interest in serious deal-making with Congress and with Senate Majority Leader Harry Reid similarly sidelined by his own bull-headed manner, Biden has emerged as a key player in a time of DC gridlock.

Biden’s ability to craft a deal with Senate Minority Leader Mitch McConnell made it clear that he, rather than the president or even Reid, has become an important Washington player in his own right. In effect, he is positioned to be the prime minister of a second Obama administration. That status will likely be reinforced by Biden’s lead role in pushing forward a new gun control initiative in the coming months. This should keep him in a spotlight that is brighter than is usual for a vice president even in an era when veeps are no longer the political equivalent of the missing persons bureau. And though 2016 is a long way off, these developments can only feed Biden’s still burning ambition to be president himself one day.

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Boehner’s Enemies

Alana Goodman 01.02.2013 - 6:25 PM

John Boehner isn’t resigning from his position as House speaker–despite dubious Internet rumors to the contrary–but there is clearly a campaign to try to push him out. Breitbart’s website, RedState, and a group called American Majority Action seem to be at the forefront.

Boehner was already under attack from the right over last night’s fiscal cliff deal. It didn’t help that he punted on a Hurricane Sandy aid bill, sending cable-soundbite kings Chris Christie and Rep. Peter King into histrionic fits. Boehner likely calculated that the pork-filled Sandy aid bill would hurt him with conservatives after the fiscal cliff deal, so he sought a delay. But Breitbart’s website speculates that Boehner had more sinister motives:

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The Cliff Vote and the Ryan-Rubio Race

Jonathan S. Tobin 01.02.2013 - 1:50 PM

It did not escape the notice of political observers that some of the leading candidates for the 2016 Republican presidential nomination came down on opposite sides of the vote on the fiscal cliff deal. No one was surprised that an extreme libertarian like Rand Paul would be one of the eight no votes in the Senate on the pact. But the votes of Senator Marco Rubio and Representative Paul Ryan did raise some eyebrows, and could potentially impact the way conservative primary voters view the pair four years from now when Iowa and New Hampshire are again the center of the political universe.

Rubio’s decision to join Paul in opposition to the deal makes sense for those who remember that although he is a very mainstream figure today, just three years ago he was viewed in Washington as just another Tea Party insurgent determined to upset the plans of the establishment to make Charlie Crist the GOP candidate for a Florida Senate seat. However, the reaction to Paul Ryan’s decision to join House Speaker John Boehner in supporting the pact did create something of a stir. Ryan’s vote for a deal that he and most other Republicans despised might have been the responsible thing to do since the alternative was to let the taxes of all Americans go up. But in doing so he may have lowered his stock among conservative activists who preferred the futile gesture of protest that most House Republicans made when they joined Majority Leader Eric Cantor in voting against the bill. Though no one should be under the misapprehension that we can know what will determine the outcome of primaries that will be held so far in the future, there’s little doubt Ryan’s stand is going to be held against him by some segments of his party.

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Obama and the “Moral High Ground”

Seth Mandel 01.02.2013 - 12:20 PM

In April 2008, during the Democratic primary season, Barack Obama criticized John McCain for seeming to favor economic policies of the Bush administration that McCain had once opposed. “Well, they may have stopped offending John McCain’s conscience somewhere along the road to the White House, but George Bush’s economic policies still offend my conscience, and they still offend yours,” Obama said.

The Bush tax cuts offended his conscience, and so did the Bush deficits. Well, they may have stopped offending Barack Obama’s conscience somewhere along the road to the White House, you might say, considering the fiscal cliff deal the Obama White House has agreed to. The reason conservatives enjoy pointing things like this out is not to play “gotcha” so much as to remind people why Obama was always so off-putting to non-liberals. To Obama, those who disagreed with him were cast as immoral. They weren’t simply political opponents of Obama’s; they were, to the current president, opponents of all that is good and righteous.

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The Boehner-Cantor Rift and the Speaker Election

Alana Goodman 01.02.2013 - 12:00 PM

House Majority Leader Eric Cantor broke with Speaker John Boehner on the fiscal cliff deal vote yesterday, fueling speculation that he may challenge Boehner in Thursday’s Speaker election. At the Guardian, Jim Antle writes:

It’s rare for the top two members of the House leadership to split on an important vote. Bob Michel, the hapless leader of the House Republicans during a long period in the minority, and Newt Gingrich voted differently on the 1990 “read my lips” tax increase. They split again over the 1994 assault weapons ban.

Even less common is a House speaker and majority leader going their separate ways on big-ticket legislation. The last major example is when the Democratic-controlled House debate funding President George W Bush’s surge in Iraq. House speaker Nancy Pelosi allowed the measure to proceed to the floor and voted no. House majority leader Steny Hoyer voted yes.

House speakers typically don’t even vote at all unless it is necessary to break a tie. So it may have been a clarifying moment when speaker of the House John Boehner and House majority leader Eric Cantor parted ways on the deal that ended the long national nightmare known as the fiscal cliff. Boehner voted for the bipartisan agreement negotiated between Vice-President Joe Biden and Senate Minority Leader Mitch McConnell; Cantor breathed the final moments of life into the opposition.

As Antle notes, despite conservative frustration with Boehner, Cantor is the only one who could potentially rally enough members behind him to seize the gavel. And Breitbart reports that there may be growing support for it:

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A Bad Deal Beats a Calamitous Outcome

Peter Wehner 01.02.2013 - 10:15 AM

The deal to avoid going over the so-called fiscal cliff was a lousy one: tax rate increases during a weak economy, no spending reductions, nothing on entitlement reform. And yet if House Republicans had succeeded in derailing this deal, negotiated between Senator Mitch McConnell and Vice President Joe Biden, it would have been disastrous.

It would have led to much higher tax increases on all Americans, even beyond the increase in payroll taxes that will now go into effect, and triggered decimating cuts in the defense department. And it would have done a great deal to advance the storyline that Republicans — at least House Republicans — are extremists enamored with nihilism.

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Cliff Win May Be Obama’s Last

Jonathan S. Tobin 01.02.2013 - 12:10 AM

President Obama got the best of both worlds with the passage of the deal to prevent the country from going over the fiscal cliff. He got the massive tax hike on wealthier Americans that he wanted and paid for it with no spending cuts. Though he acted throughout the crisis as if he might prefer the political advantage that he would gain by a Republican refusal to pass these measures, the avoidance of the cliff prevents the economy from going into a tailspin that would blight his second term. And he accomplished all this while making Republicans looking bad with the passage of the compromise being accomplished despite overwhelming opposition from the House majority caucus.

But the president’s claim that he wouldn’t have another debate with Republicans about taxes and spending in the future was a hollow challenge. House Speaker John Boehner and other Republicans who voted for the unsatisfactory package and ensured its passage knew that the alternative was a devastating tax hike for all Americans that would harm the economy and hurt their party for years to come. Though liberals have often claimed that it was the GOP and its Tea Party faction that was holding the nation hostage, this time it was the Democrats who were the ones with a gun to the heads of the nation. It was either vote for a tax increase for some and no spending cuts or see middle class America pay a terrible price. These circumstances won’t apply in the coming months when the debt ceiling and other budgetary measures must be passed. Though the cliff bill was a win for the president, he isn’t likely to have one like this again.

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GOP Plays Into Obama’s Hands on Cliff

Jonathan S. Tobin 01.01.2013 - 7:00 PM

Those who were wondering at the truculent tone exhibited by President Obama yesterday afternoon during remarks delivered at a White House event got their answer today. Negotiations between Vice President Biden and Senate Minority Leader Mitch McConnell had already produced a deal by the time the president spoke. That should have meant at least a temporary cessation of partisan warfare, but Obama was having none of it. As I wrote yesterday, though the deal was very much on his terms–including a tax increase on those making $400,000 or more a year and had nothing in it about the spending cuts or entitlement reform that is necessary to fix the country’s budget problems–the president was not in a conciliatory mood. He made it clear that subsequent negotiations about the debt ceiling and the budget would focus on even more tax increases rather than address the nation’s spending problem. He spoke contemptuously of the Republican position. Rather than uniting the nation just at the moment when it appeared a bipartisan compromise (albeit one that was far closer to his demands than anything proposed by the GOP) had been achieved, he seemed intent on goading House Republicans into rejecting the deal.

One day later, it looks like he got his wish. Though the Tea Partiers in the GOP caucus might have opposed the deal anyway, as did presidential hopefuls Rand Paul and Marco Rubio in the Senate, Obama’s remarks had to have pushed many Republicans over the edge into opposition. Though the alternative to passing the deal, which would entail sending the country over the fiscal cliff and generate ruinous tax increases for all Americans, is unthinkable, it is hard to blame House Majority Leader Eric Cantor and other Republicans for thinking they are dealing with a negotiating partner in the president who is only interested in raising taxes and not in dealing with the nation’s problems. Though it can be argued that the GOP will be in a stronger position to fight the Democrats on entitlement reforms once taxes on the wealthy have already been raised, Cantor and his colleagues understand that Obama will not negotiate in good faith two months later on the debt ceiling any more than he has this time. That’s exactly the message the president wanted to send, and his intended audience responded just as he wished. Read More

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The “Fiscal Cliff” Deal and Defense

Max Boot 01.01.2013 - 3:00 PM

The Senate’s early-morning budget deal kicks the can down the road–not very far down the road–for about two months. For those of us who focus on defense policy, the good news is that the Senate at least agreed to address the looming sequester, something that looked unlikely as recently as a few days ago.

According to this report in the Washington Post, “The last last piece of the puzzle to fall into place was the sequester, which would be delayed until early March under an agreement to raise $12 billion in new tax revenue and $12 billion in fresh savings from the Pentagon and domestic programs.” Presumably that means that the cost of turning off the sequester for two months is about $6 billion in extra defense cuts. That’s much better than $50 billion in cuts, which would have hit if sequestration had occurred, but given how much the Defense Department has been cut already (remember that the budget deal of 2011 slashes some $500 billion over 10 years), while entitlement spending (the main driver of our debt) has not been cut at all, there is scant justification for cuts of any size. At least on the merits.

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Obama Sets Stage for Conflict

Alana Goodman 12.31.2012 - 4:40 PM

Just as it looked like a fiscal cliff deal was coming together, President Obama gave a partisan, sarcastic speech this afternoon that seemed intended to set back the entire process. As Jonathan wrote, Republicans have good reason to think the president’s goal is to go over the cliff. But they also suspect the White House is preparing to push for further tax increases, in addition to the hikes on individuals making over $400,000 (and families making over $450,000) a year.

“What they’re telegraphing to me is that when Republicans ask for spending cuts, [Democrats are] gonna say ‘You’re not getting those unless we get more tax hikes’,” said one Republican Senate aide after the speech.

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Obama’s Crisis Demagoguery

Jonathan S. Tobin 12.31.2012 - 2:40 PM

There may be a last-minute compromise reached today in the negotiations over the fiscal cliff, but not if President Obama has anything to say about it. Even as Vice President Joe Biden and Senate Minority Leader Mitch McConnell were believed to have led the effort to have the structure of a deal in place for the two houses of Congress to vote on later today, the president emerged to make a statement that seemed geared to scuttling the negotiations.

In a campaign-style event, the president spoke of a possible accord between the two parties that would avert the immediate effects of the fiscal cliff being reached. But the bulk of his remarks were devoted to goading the Republicans into backing away from any deal. Not only did he gratuitously insult the GOP about their stands on the budget to the great amusement of the hand-picked audience of supporters, he also made it clear that the tax increases in any compromise would just be the start of what he hoped to accomplish. Even worse, he implied that spending cuts, especially the entitlement reform that is necessary for any long-term solution to the nation’s problems, are not really on the table as far as he is concerned.

Given the tone of his comments and the timing, Republicans should be forgiven for suspecting that his real purpose was to send the country over the cliff in the belief that only the GOP would be blamed for the disaster.

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Why Both Parties Failed

Jonathan S. Tobin 12.31.2012 - 12:30 PM

It almost goes without saying that even if a deal is somehow reached today that would prevent a massive tax increase and defense cuts, the disgust of the public at the fiscal cliff hijinks that have gone on in Washington the last few weeks will outweigh the relief they feel. If the last-second talks between Vice President Joe Biden and Senate Minority Leader Mitch McConnell succeed in crafting a short-term compromise that enough Democrats and Republicans can live with, the country will be spared the disaster that would ensue should the scheduled across-the-board tax increases and devastating sequestration of funds for national defense be implemented. But as much as both sides have spent more time casting aspersions at each other’s motives than negotiating in good faith, there needs to be a full accounting of why this happened in the way that it did.

To say that both Republicans and Democrats have failed in this episode is stating the obvious. But each failed in different ways and an analysis of their shortcomings tells us a lot about the direction in which the country is heading.

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