Commentary Magazine


Topic: tax increases

Why the GOP Opposes Tax Increases

President Obama continued his campaign to demonize his opponents in the sequester standoff yesterday. Appearing on the radio show of racial huckster Al Sharpton, the president again attempted to frame the issue facing the country as one that pit the middle class and the poor against the wealthy. If Republicans refused to accede to his demands for a budget solution that would include more tax hikes, it was because affection for the wealthy was the core principle at the heart of their political coalition:

My sense is that their basic view is that nothing is important enough to raise taxes on wealthy individuals or corporations. And they would prefer to see these kinds of cuts that could slow down our recovery over closing tax loopholes, and that’s the thing that binds their party together at this point.

This is not just false but the kind of over-the-top rhetoric that gives the lie to the president’s pose of moderation and a willingness to reach out across the aisle. His claim that the rich don’t pay taxes is also false. So is the notion that it is only the wealthy who are being hurt by the government’s appetite for more “revenue” on his watch, as every American–be they rich, middle class or poor–found out last month when they saw their take-home pay drastically reduced by the increase in the payroll tax. But there is more to this debate than just Obama’s penchant for political talk. Conservatives do oppose tax increases as a general principle–not because they see it as their job to defend the wealthy but because they rightly understand their proper role as defending all Americans against the expansion of government power.

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President Obama continued his campaign to demonize his opponents in the sequester standoff yesterday. Appearing on the radio show of racial huckster Al Sharpton, the president again attempted to frame the issue facing the country as one that pit the middle class and the poor against the wealthy. If Republicans refused to accede to his demands for a budget solution that would include more tax hikes, it was because affection for the wealthy was the core principle at the heart of their political coalition:

My sense is that their basic view is that nothing is important enough to raise taxes on wealthy individuals or corporations. And they would prefer to see these kinds of cuts that could slow down our recovery over closing tax loopholes, and that’s the thing that binds their party together at this point.

This is not just false but the kind of over-the-top rhetoric that gives the lie to the president’s pose of moderation and a willingness to reach out across the aisle. His claim that the rich don’t pay taxes is also false. So is the notion that it is only the wealthy who are being hurt by the government’s appetite for more “revenue” on his watch, as every American–be they rich, middle class or poor–found out last month when they saw their take-home pay drastically reduced by the increase in the payroll tax. But there is more to this debate than just Obama’s penchant for political talk. Conservatives do oppose tax increases as a general principle–not because they see it as their job to defend the wealthy but because they rightly understand their proper role as defending all Americans against the expansion of government power.

The common thread throughout all of the president’s political pronouncements—such as the laundry list of liberal government projects he wishes to fund included in his State of the Union address—is the notion that big government is back to stay. Though he couches his rhetoric in such a way as to claim that he is not trying to expand the deficit, not even his supporters really believe that. But they are thrilled that the re-elected Barack Obama seems determined to bring the country back to a time when there was no end in sight to the growth of government-funded entitlements.

What conservatives understand is that this project is not something that will only be paid for by the rich. The top 1 percent of the country in terms of wealth already pay 38 percent of all taxes. And even if that figure is made to expand exponentially, it will never be enough to pay for all the things Obama wants government to do.

It may well be that, at least in the short term until the impending insolvency of our entitlement-bloated budget forces a change, those who promise the unending delivery of government goodies to as many people as possible will be politically successful. The president may certainly be forgiven for reaching that conclusion–especially after a re-election campaign in which his class warfare pitch was made even easier by Mitt Romney’s impolitic, but not altogether false, crack about Republicans not having a chance to gain the votes of the 47 percent of Americans who pay no taxes.

But Republicans should be united in their belief that the more money looted from the taxpayers, the bigger government and the federal bureaucracy will grow and with it an ever-rising federal debt that will eventually sink this country. The reason why Obama’s “balanced” approach to deficit reduction—which on the face of it seems so reasonable—must be opposed is that the president’s promises of cuts are no more credible than those of a “three-card monte” street game in which the pigeon can always count on being fleeced. No matter what he says now and no matter how much is taken from the wealthy, the government and the deficit will continue to grow and that will impoverish every taxpayer.

Calling the president out for this con game that liberals have been playing on the public for generations is a defense of the integrity of all taxpayers as well as common sense. The president may think he can evade a real debate about the deficit with name-calling and deceptive promises, but sooner or later the liberal project will be capsized by the debt he is running up. Though they have good reason to worry that Obama is getting the better of them at the moment, this is an issue around which Republicans ought to unite.

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Sequestration and National Security

General Ray Odierno, the army chief of staff, has provided further details of what sequestration could mean for the army–and why it would be so devastating. Already the army is due to decline in size, because of existing budget cuts, from 570,000 active duty personnel today to 490,000 in a few years’ time. If sequestration occurs, Odierno says a total of 200,000 troops could be laid off—35% of the current force. That would result in the smallest army since the dark days of 1940 when, not coincidentally, German, Italian, and Japanese militarists were overrunning the globe.

Supporters of sequestration reply that it’s only fair the military absorb some cuts because of our fiscal crisis. But the military has already absorbed more than its share–unlike domestic programs. As Odierno reminded an audience at the Brookings Institution, in 2010 Secretary of Defense Bob Gates cancelled various procurement programs worth $300 billion, then in 2011 Congress enacted another $487 billion in cuts over 10 years. Thus the sequestration cuts, amounting to $500 billion, come on top of almost $800 billion in existing cuts. The drying up of funds for the war effort in Afghanistan will result in another major hit to the budget; that funding was used to pay for needed training and equipment refitting that will now have to be paid out of the regular defense budget.

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General Ray Odierno, the army chief of staff, has provided further details of what sequestration could mean for the army–and why it would be so devastating. Already the army is due to decline in size, because of existing budget cuts, from 570,000 active duty personnel today to 490,000 in a few years’ time. If sequestration occurs, Odierno says a total of 200,000 troops could be laid off—35% of the current force. That would result in the smallest army since the dark days of 1940 when, not coincidentally, German, Italian, and Japanese militarists were overrunning the globe.

Supporters of sequestration reply that it’s only fair the military absorb some cuts because of our fiscal crisis. But the military has already absorbed more than its share–unlike domestic programs. As Odierno reminded an audience at the Brookings Institution, in 2010 Secretary of Defense Bob Gates cancelled various procurement programs worth $300 billion, then in 2011 Congress enacted another $487 billion in cuts over 10 years. Thus the sequestration cuts, amounting to $500 billion, come on top of almost $800 billion in existing cuts. The drying up of funds for the war effort in Afghanistan will result in another major hit to the budget; that funding was used to pay for needed training and equipment refitting that will now have to be paid out of the regular defense budget.

Cumulatively, Odierno estimates, “if we implement the 2014 budget without sequestration, it’ll be a 45 percent reduction in the Army budget,” compared to the baseline of 2008. “If we implement sequestration, it’ll be over 50 percent.”

Little wonder than, that Odierno says “today, in my opinion, the greatest threat to our national security is the fiscal uncertainty resulting from the lack of predictability in the budget cycle.”

His words should not be dismissed as the pronouncements of a general bent on preserving his personal prerogatives. They are, instead, the words of a man who has devoted his life to the defense of his country and now sees our front line of defense in jeopardy of collapse. It is hard to exaggerate just how dire the situation is now, especially given that both Democrats and Republicans say there is virtually no chance of reaching a deal before sequestration hits on March 1.

The problem is that President Obama is demanding “revenue enhancements”—i.e., tax increases—along with further cuts to the defense budget as part of any deal to stop sequestration. Republicans, having already gone along on tax hikes once, aren’t budging this time around. Some privately even welcome sequestration; for instance John Makin of the American Enterprise Institute had an op-ed in the Wall Street Journal that made the pro-sequestration case without once mentioning its impact on defense.

This is the height of irresponsibility all around. Sequestration will have little impact on our fiscal situation (even eliminating the entire Department of Defense will not eliminate the budget deficit) but it will have devastating consequences for our military readiness in ways that will endanger our long-term security. In an ideal world lawmakers would reach a deal to cut entitlement spending instead since that is the real source of our budget woes. In today’s Washington, however, that won’t happen. If Republicans have no choice but to agree to tax hikes to stop sequestration, so be it: Almost any price is worth paying to prevent the evisceration of our most vital military capabilities.

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GOP Can Start Reining in the Debt

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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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.

As Morris writes:

The Republicans should offer to pass a bill now setting a debt limit that rises each quarter pegged to one-third of the revenue growth of the preceding quarter. Thus, two-thirds of all revenue growth — natural or due to tax hikes — would go to deficit reduction.

Republicans are unwilling to pull the trigger on default by refusing to raise the debt limit. But a bill to allow gradual increases in the debt limit, at a pace slower than revenue growth, need not trigger default. Instead, the president would be forced to prioritize his spending and borrowing so as to avoid default, pay the military and send out Social Security checks. All the rhetorical handles he has to battle an effort to kill the debt-limit increase will be gone in the face of a phased-in debt-limit hike.

Critics of the idea can certainly point out that this proposal could turn out to be as ineffectual as Boehner’s Plan B fiscal cliff plan that was dead on arrival in the House and never would have been passed in the Senate or signed by the president. We should certainly expect the president to stick to his refusal to negotiate on the debt ceiling at least initially. But Morris is right that what the GOP needs to avoid is an all-or-nothing approach to the debt that will only make Obama look like the reasonable one in the negotiation, even if his stand is no less ideological than that of his Tea Party foes.

As Pete wrote last week, conservatives need to use the upcoming months to articulate their vision for the country. But so long as they control the House they must use that body’s power of the purse to fight for the principles that the voters expect them to uphold. That requires what Morris calls a “flexible response” to a difficult fiscal and political problem. So long as Republicans are willing to raise the ceiling and avoid the shutdown that Obama believes will only strengthen his hand, they have a chance to win their point. The phased approach may not be perfect, but it is as good a scheme for thwarting Obama’s tax madness as I’ve heard in the last week.

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

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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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.

In the view of the Times, anything that creates a more progressive system in which more money is siphoned out of the private sector and into the hands of Washington is a form of reform no matter how convoluted the system might be. That’s a distraction from the country’s real problems that have everything to do with spending and little to do with not enough taxes. But it is also pure liberal cant rather than sensible economics.

But the Times is right on target in one respect. Having bulldozed Congress into the fiscal deal tax hike, the president and his followers are in no position to push for even more tax hikes. The payroll tax windfall for Uncle Sam also makes this argument difficult to sell to a skeptical public, let alone a Republican House of Representatives that is determined that it won’t be scammed in this manner again.

We can expect to hear more of this distorted argument in the coming weeks and months, but the main takeaway from this discussion ought to inform the way the upcoming debt ceiling fight is covered. Redistribution isn’t tax reform. It’s actually a way to avoid reform as well as irrelevant to the cause of preventing the country from sinking into bankruptcy. The Times editorial as well as the rhetoric coming out of the Democrats in recent days makes it apparent that instead of this confrontation being one between extremist Republicans and a sensible White House, the real ideologues in this argument are among the ranks of the president’s supporters.

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Cliff Win May Be Obama’s Last

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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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.

Before leaving the White House to continue his Hawaii vacation, the president spoke on Tuesday night as if the House vote settled for all time the question of whether he would have to deal with Republican objections to his decidedly unbalanced approach to balancing the budget. 

Far from silencing the Republicans, this debate will ensure that the House majority will be even more determined in the future to oppose the tax increases that the president has said he will push for in the future. Nor will they allow him to get anything passed without addressing the one thing that he has refused to contemplate in any serious manner: entitlement reform. He also won’t be able to count on dividing the GOP caucus as he did this time, as Speaker Boehner’s desire to do the right thing by the country estranged him from not only the Tea Partiers but much of his own leadership team. If there’s anything Obama should expect it is that this is the last time Boehner will allow House Majority Leader Eric Cantor to outflank him with most Republicans siding with him against the speaker.

That means this is also probably the last time there will be enough votes to raise taxes on anybody, especially with nothing being done about the spending problem that is at the heart of the nation’s fiscal ills.

President Obama should enjoy his victory on his plane ride to his island holiday. No amount of presidential bluster or bravado will be enough to get him another like it over the course of the coming years.

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GOP Plays Into Obama’s Hands on Cliff

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

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.

Throughout the debt ceiling talks last year and the recent discussions about the budget, the president has acted as he if wanted to avoid a deal with the GOP. The lip service he paid to the notion of compromise was always overshadowed by incendiary class warfare rhetoric that was aimed at his liberal base. Sending the nation over the cliff also achieves his objectives: raising taxes to create more revenue for the government to spend and forcing cuts in defense that he favors anyway.

That’s why many Republicans have suspected all along that the president’s refusal to get off his high horse and actually negotiate about entitlement reform was intended to blow up any hopes of an accord. At every stage of the talks when logic would have called for the White House to strike a moderate tone about the budget, Obama has instead done his best to incite the GOP caucus to stand their ground on taxes and spending. In doing so yesterday he merely confirmed the belief held by many conservatives that any concessions on their part would be merely pocketed by the Democrats before being asked for more.

Republicans will pay a high price for taking the president’s bait and voting the compromise down in the House or amending it to the point that it will be rejected by the Democrat-controlled Senate. Though it may be unfair for Americans to blame the GOP more than a president who is every bit the ideologue that his Tea Party foes are, there is little doubt that a no vote from the House will result in the Republicans being blamed for higher taxes on the middle class. As much as the deal is a bad one, allowing those taxes to rise is bad politics as well as bad policy. Most of all, in doing so, House Republicans are playing right into the president’s hands. 

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Obama’s Crisis Demagoguery

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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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.

The president obviously thinks the very last moment before a fiscal catastrophe that would raise taxes on all Americans and impose devastating cuts in defense is a good time to mock the idea of spending cuts and to threaten further taxes. The only possible motivation for this is to convince suspicious Republicans that any give in their position will not be met even part of the way by the Democrats. In other words, if even now the president is unprepared to contemplate entitlement reform, then it is difficult to make the argument that they should do the responsible thing and compromise.

Through last year’s debt ceiling crisis as well as the fiscal cliff talks, the president has always behaved as if he thought he had nothing to lose by engaging in class warfare demagoguery. Since going over the cliff means raising more taxes and feeding the government beast that he seems uninterested in restraining as well as cutting defense spending, why shouldn’t he try to incite the GOP to refuse to agree to a deal?

But for him to behave in this manner on the very eve of the crisis while leaders of both parties are struggling to construct a makeshift measure that will get the nation past midnight is telling.

This is not just the confident manner of a re-elected president, but the contempt of a man who believes he doesn’t have to listen to anyone but himself. This may presage future fights over taxes in which he thinks he will continue to have the whip hand over the GOP. But the law of unintended consequences may eventually catch up with him. Though his soak-the-rich rhetoric resonates with many Americans, they also understand that entitlement reform is in the best interests of the nation and that raising taxes on millionaires won’t balance the budget. Few outside the hard left really believe, as Obama seemed to say today, that America only has a tax problem, not a spending problem.

If in the coming months and years these irresponsible tactics catch up with the president, we may look back on his behavior today and see it as the turning point in the debate. The Greeks had a word for the kind of behavior President Obama demonstrated today: hubris. His second term may well be blighted by it.

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Obama’s Gesture Just for Show

The spin coming out of the White House is that President Obama cut short his annual Hawaii vacation to head back to Washington to help nudge Congress towards a deal that would prevent the nation from heading over the fiscal cliff. If so, this act of sacrifice will allow the president to show his leadership skills and craft a compromise tax and spending bill that will pass both houses of Congress. But with only a few days left before a massive across-the-board tax increase is imposed on the American people while devastating cuts in defense are put into effect, it’s much more likely that the president’s gesture is just for show.

If the president really wanted to avoid the fiscal cliff, he might have spent the weeks before his family headed to Oahu for Christmas making a good faith effort to make a deal with Congressional Republicans rather than digging in his heels on his own plan to raise taxes while refusing to substantially address the real issue at the heart of the fiscal crisis: entitlement spending. Most Republicans rightly suspect that he’s quite content to see the deadline expire. So why come home?

The answer is simple. The optics of more days of presidential golf while the country heads closer to an economic disaster would damage Obama’s image and make it clear that he views the impact of the fiscal cliff as being more to his liking than a reasonable compromise.

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The spin coming out of the White House is that President Obama cut short his annual Hawaii vacation to head back to Washington to help nudge Congress towards a deal that would prevent the nation from heading over the fiscal cliff. If so, this act of sacrifice will allow the president to show his leadership skills and craft a compromise tax and spending bill that will pass both houses of Congress. But with only a few days left before a massive across-the-board tax increase is imposed on the American people while devastating cuts in defense are put into effect, it’s much more likely that the president’s gesture is just for show.

If the president really wanted to avoid the fiscal cliff, he might have spent the weeks before his family headed to Oahu for Christmas making a good faith effort to make a deal with Congressional Republicans rather than digging in his heels on his own plan to raise taxes while refusing to substantially address the real issue at the heart of the fiscal crisis: entitlement spending. Most Republicans rightly suspect that he’s quite content to see the deadline expire. So why come home?

The answer is simple. The optics of more days of presidential golf while the country heads closer to an economic disaster would damage Obama’s image and make it clear that he views the impact of the fiscal cliff as being more to his liking than a reasonable compromise.

Throughout the negotiations over the budget, the president has always acted as if a continuation of the standoff served his interests. After all, if the deadline does expire without a deal he’ll get a good deal of what he’s wanted all along: big tax increases to give the government more money to spend and large cuts in defense spending without forcing the government to think seriously about how to reform entitlements. And if the polls are right, the Republicans will be blamed for the whole mess.

Last week’s debacle for House Speaker John Boehner in which a substantial number of House Republicans refused to back his Plan B compromise bill which would have only raised taxes on millionaires reinforced the president’s confidence that he can only win by prolonging the impasse. And by showing up in DC this week he can preserve the pretense that he wants a solution even while continuing to do nothing to advance one.

But these careful calculations may not turn out to be as well considered as the president thinks.

If the Democrat-controlled Senate fails to pass a budget proposal this week — something it has failed to do for the last three years — then it will be as much their fault as the House Republicans that a deal wasn’t made before we all go over the fiscal cliff. That means it is up to the leader of their party to ensure that some kind of bill that can pass both houses of Congress gets to his desk in the next few days.  Should, as seems increasingly likely, that not happen, the consequences would be incalculable for Obama, his party and the Congress.

The assumption that only Republicans will bear the burden of why there was no deal only holds true if the president and the Democrats send a bill to the House of Representatives before next week’s deadline. Any bill that stops the tax increases and sequestration cuts is likely to get some Republican votes even if it is a short-term solution on the president’s terms. If that doesn’t happen, the economic downturn that will likely follow is going to hurt Obama far more than a Republican party that is already out of power. If so, the president may have reason to regret that his curtailed vacation wasn’t more a matter of a real effort to avoid the cliff than playacting for the media.

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Heading Over the Cliff With Plan B?

With the House Republican leadership sticking to its plans to push through a Plan B tax and spending bill today, it’s an open question as to whether House Speaker John Boehner is really bluffing about his proposal as the party’s final answer to the White House in the fiscal cliff negotiations. Considering that there is no chance that the Democrats will allow the GOP plan to pass in the Senate and that reportedly even the staffs of the two sides are not talking, right now it is entirely possible that the standoff will result in there being no deal in place prior to the Christmas holiday next week. Or is it?

There are many observers in Washington and around the nation who are convinced that Plan B is merely an elaborate bluff designed to smoke more concessions out of an administration that for all of the president’s bluster is as desperate to avoid the ruinous tax increases and spending cuts that a failure to make a deal will bring as any Republican. But considering the enormous difficulty that Boehner is having in lining up the 218 votes from his own caucus that he will need to pass his legislation, imagining him going back to Republicans in the next couple of weeks to ask for their support for what is certain to be an even more unpalatable compromise deal seems a stretch. That means that it is entirely possible that Boehner and Majority Leader Eric Cantor mean what they say about putting off any further efforts to resolve the crisis until January. In other words, like it or not, both parties may actually be heading over the fiscal cliff with Plan B.

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With the House Republican leadership sticking to its plans to push through a Plan B tax and spending bill today, it’s an open question as to whether House Speaker John Boehner is really bluffing about his proposal as the party’s final answer to the White House in the fiscal cliff negotiations. Considering that there is no chance that the Democrats will allow the GOP plan to pass in the Senate and that reportedly even the staffs of the two sides are not talking, right now it is entirely possible that the standoff will result in there being no deal in place prior to the Christmas holiday next week. Or is it?

There are many observers in Washington and around the nation who are convinced that Plan B is merely an elaborate bluff designed to smoke more concessions out of an administration that for all of the president’s bluster is as desperate to avoid the ruinous tax increases and spending cuts that a failure to make a deal will bring as any Republican. But considering the enormous difficulty that Boehner is having in lining up the 218 votes from his own caucus that he will need to pass his legislation, imagining him going back to Republicans in the next couple of weeks to ask for their support for what is certain to be an even more unpalatable compromise deal seems a stretch. That means that it is entirely possible that Boehner and Majority Leader Eric Cantor mean what they say about putting off any further efforts to resolve the crisis until January. In other words, like it or not, both parties may actually be heading over the fiscal cliff with Plan B.

All along it has been President Obama rather than Boehner who has sounded like the side most ready to go to the brink. With polls showing the public blaming Republicans for the impasse and a second term already won, the president appeared to believe that he had the whip hand in any negotiation. Indeed, up until the last week when he offered to raise taxes only on those making more than $400,000 rather than $250,000, Obama had showed no sign of being willing to budge. After that, most pundits assumed that there would be further movement from both sides that would create a deal that would be somewhere between $400,000 and the $1 million income mark that Boehner has offered. But if the speaker had come to believe that there would be no more concessions from a president who thought he could bludgeon his opponents by further grandstanding and delegitimization of their position, then perhaps he came to the conclusion that it was time for him to shut down the talks and make the White House sweat.

Republicans are aware that they will be blamed in the short term for allowing an across-the-board tax increase and the impact this will have on the economy. But they also understand that any hopes for a successful second term for the president hinge on a deal that might boost the chances of a genuine recovery for the nation rather than the anemic revival it has experienced under Obama. This may be emboldening Boehner to think that it is he, and not the man who was just re-elected president, who is in control of the talks.

In doing so, Boehner may have put the ball back into the Democrats’ court. But it’s not easy to see how the GOP leadership team will sell a deal in which the president came closer to their position if they’re having such a hard time putting across Plan B.

If the end result of all this maneuvering is that no deal will be reached, it must be said that this is a disaster for the country. Allowing taxes to rise for all taxpayers is not just wrong (indeed, Republican hardliners are right when they say that any increase on anyone, no matter how rich, isn’t going to help the economy or do much to balance the budget), it will harm the nation’s economic health. The defense cuts that will result from such a failure will also be ruinous for national security. But Boehner may be counting on President Obama being more fearful of this than a Republican Party that may think it has nothing left to lose after their November defeat. Unless the president jumps first in the next couple of days in this game of chicken the two are playing, the fiscal cliff doomsday scenario may come to pass.

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Boehner’s Bluff Not Impressing Dems

This morning’s press conference by the Republican House leadership was supposed to give the impression that Speaker John Boehner is prepared to go to the brink on the fiscal cliff negotiations with the White House. The GOP has finally coaxed President Obama to budge a bit from his previous hard-line position on raising taxes on all those who earn more than $250,000 (the president has upped the total to $400,000) leading many journalists to write yesterday as if a deal between the two sides was a foregone conclusion. But Boehner knows he needs more than the minimal spending cuts offered by the Democrats if he expects his caucus to back a gut-wrenching compromise that will require them to sign on to tax increases that they think will hurt the economy as well as offend their principles. Thus, the speaker was in front of the cameras today insisting that he would pass a version of his own current position on the fiscal cliff that would only raise taxes on those earning more than $1 million and more drastic spending cuts than those envisioned by the White House that has zero chance in the Democrat-controlled Senate.

But Boehner’s problem is that Democrats are no more impressed by his Plan B bluff than his Tea Party colleagues are by the president’s slight movement toward a deal. With polls continuing to show that the public blames the GOP more than the president for the impasse over the budget, no one in the White House or the Democratic caucus thinks the speaker’s move is anything more than the negotiating tactic of a party that knows it is in a vulnerable position.

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This morning’s press conference by the Republican House leadership was supposed to give the impression that Speaker John Boehner is prepared to go to the brink on the fiscal cliff negotiations with the White House. The GOP has finally coaxed President Obama to budge a bit from his previous hard-line position on raising taxes on all those who earn more than $250,000 (the president has upped the total to $400,000) leading many journalists to write yesterday as if a deal between the two sides was a foregone conclusion. But Boehner knows he needs more than the minimal spending cuts offered by the Democrats if he expects his caucus to back a gut-wrenching compromise that will require them to sign on to tax increases that they think will hurt the economy as well as offend their principles. Thus, the speaker was in front of the cameras today insisting that he would pass a version of his own current position on the fiscal cliff that would only raise taxes on those earning more than $1 million and more drastic spending cuts than those envisioned by the White House that has zero chance in the Democrat-controlled Senate.

But Boehner’s problem is that Democrats are no more impressed by his Plan B bluff than his Tea Party colleagues are by the president’s slight movement toward a deal. With polls continuing to show that the public blames the GOP more than the president for the impasse over the budget, no one in the White House or the Democratic caucus thinks the speaker’s move is anything more than the negotiating tactic of a party that knows it is in a vulnerable position.

Republicans are right to argue that the president’s insistence on raising taxes on the wealthy has little or nothing to do with balancing the budget, let alone helping an anemic recovery. Their frustration with the White House’s refusal to seriously address the deficit via entitlement reform is similarly justified. But they also know that if the fiscal cliff is reached next month without a deal in place, it will be their party and not a newly re-elected president who will be blamed for the across-the-board tax increase that will be imposed on the middle class as well as the rich. Though the president has a lot to lose by allowing the standoff to sink an already fragile economy, Boehner is sensible to the fact that a failure to compromise would be a political disaster for the GOP.

That has left the speaker in the unenviable position of having to try to make the best possible deal with the president without setting off a full-scale revolt among House Republicans.

Thus, it is likely that talk about Plan B—a proposal that is sensible but which would be dead on arrival in the Senate—has more to do with the speaker orchestrating a process by which he can secure his party’s agreement to an unpopular deal.

But unfortunately for Boehner, it isn’t terribly likely that President Obama will make it easy on him and follow up his tax offer with a more far-reaching proposal about cuts. The looks on the faces of Boehner, House Majority Leader Eric Cantor and Whip Kevin McCarthy this morning reflected the desperation of men who understand they have very few cards left in their hands, not the bold defiance of a party that thinks it can defy the president’s bullying tactics. Obama has spent the last month since his victory over Mitt Romney acting as if he would be just as pleased by a failure to avoid the fiscal cliff as he would be by getting his way in the talks with the Republicans.

Boehner deserves some credit for being tough enough to get Obama to make some concessions, but given the weakness of his relative position to the winner of the presidential election, those Republicans who expect him to get more are probably being unrealistic.

Though a compromise, no matter how inadequate, will be seen as a victory for Obama, in the long run it is the nation as a whole that is the big loser in a negotiation that seems destined to ensure that the country not deal with entitlement reform and the out-of-control spending that is a strategic threat to America’s future. But in the short term, it appears that Boehner’s Plan is just the prelude to an unpalatable deal that will at least allow Republicans to avoid the blame for a tax increase on everyone.

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Will Ryan Lead GOP Resistance to Deal?

As negotiations over a deal on the federal deficit continue, President Obama pressed his advantage with his House Republican antagonists yesterday with his latest speech harping on the need to raise taxes. Though he calls his plan a “balanced approach,” as the New York Times notes today, “the high-profile public campaign he has been waging in recent days has focused almost entirely on the tax side of the equation, with scant talk about his priorities when it comes to curbing spending.” That doesn’t mean that some spending cuts won’t eventually be included in any deal. But with more signs of GOP panic about being blamed for the standoff, the expectation is that the president will get a lot more than he will give in the negotiations with House Speaker John Boehner.

As Politico reports today, the outline of a deal is already in place and few in Washington believe the Republicans will stand their ground when it comes to opposing the raising of rates on wealthier Americans, even if those hikes won’t do much to solve the deficit. Even worse is the possibility that rather than just closing loopholes and eliminating deductions instead of raising rates, what will happen is that the GOP will wind up doing both while failing to extract an agreement on reforming the tax code or an end to out-of-control spending on entitlements.

But if the assumption that Boehner and House Majority Leader Eric Cantor will decide that discretion is the better part of valor and fold in order to avoid the fiscal cliff is correct, that leaves us with the not unimportant question of who it will be that will lead the resistance to such a deal. The answer to that question will tell us a lot about the future of the Republican Party as well as the 2016 presidential race.

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As negotiations over a deal on the federal deficit continue, President Obama pressed his advantage with his House Republican antagonists yesterday with his latest speech harping on the need to raise taxes. Though he calls his plan a “balanced approach,” as the New York Times notes today, “the high-profile public campaign he has been waging in recent days has focused almost entirely on the tax side of the equation, with scant talk about his priorities when it comes to curbing spending.” That doesn’t mean that some spending cuts won’t eventually be included in any deal. But with more signs of GOP panic about being blamed for the standoff, the expectation is that the president will get a lot more than he will give in the negotiations with House Speaker John Boehner.

As Politico reports today, the outline of a deal is already in place and few in Washington believe the Republicans will stand their ground when it comes to opposing the raising of rates on wealthier Americans, even if those hikes won’t do much to solve the deficit. Even worse is the possibility that rather than just closing loopholes and eliminating deductions instead of raising rates, what will happen is that the GOP will wind up doing both while failing to extract an agreement on reforming the tax code or an end to out-of-control spending on entitlements.

But if the assumption that Boehner and House Majority Leader Eric Cantor will decide that discretion is the better part of valor and fold in order to avoid the fiscal cliff is correct, that leaves us with the not unimportant question of who it will be that will lead the resistance to such a deal. The answer to that question will tell us a lot about the future of the Republican Party as well as the 2016 presidential race.

As Politico notes, the wild card in the GOP leadership is Rep. Paul Ryan, who is now back on the Hill in his role as House Budget Committee chair after his stint as Mitt Romney’s vice presidential nominee. Reportedly, Ryan is the sole member of the top House GOP leadership who is still opposed to conceding the argument about raising taxes that his colleagues consider to be inevitable.

If Ryan came out openly against the agreement, it would take the already fractious debate about the direction of the Republican Party to a new level of contentiousness. A full-scale revolt would pit the Tea Party core of the GOP against its more pragmatic leaders with consequences that can’t be entirely predicted. That would be catnip for a liberal media that loves to depict the GOP as extremists. It could also set the stage for a difficult vote in which liberal Democrats might choose to join with conservatives in opposing an Obama-Boehner deal in the hope that sending the country over the cliff would be blamed solely on the Republicans. However, a Ryan-led opposition to a deal would be no pushover, and even the possibility of such a party split might cause Boehner to pull back from a deal that could sunder his caucus and achieve the same results.

A Ryan revolt or even a situation in which he was seen as the one member who kept the GOP true to its principles might also be the first blow in what is sure to be a protracted four-year lead-up to the 2016 presidential contest. By taking a stand now, Ryan would further establish himself as the hero of conservatives and the Tea Party even as he alienated the party’s House leadership. But it is the former rather than the latter that helps picks party nominees.

However, should Ryan decide to go along with Boehner, that won’t mean there won’t be any opposition to a pact with Obama. There will, and it will be angry and loud. But if it falls to someone like Michele Bachmann or a similar Tea Party rabble-rouser, the effect won’t be the same as if Ryan were the standard-bearer. In that case, Boehner would probably prevail. Seen in that light, Ryan’s decision may well decide the fate of any fiscal deal.

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Confident Obama Counting on GOP Panic

There’s no doubt that a president who has just been re-elected has a lot more leverage in a negotiation than the House Republican leadership. But if President Obama is feeling confident that he can have his way in any deal that prevents the country from heading over the fiscal cliff, it’s not just because of his victory over Mitt Romney earlier this month. The spectacle of House Republicans starting to snipe at each other and tax activist Grover Norquist is evidence that the campaign to pressure Congress into backing tax increases being orchestrated by the White House appears to be working.

While the pushback against Norquist’s heavy-handed attempts to bludgeon Republicans into obedience is understandable, both the anti-tax purists and those more amenable to compromise are playing right into Obama’s hands. Rather than the debate centering on whether tax increases will hurt the economy and the need for Democrats to put entitlement spending on the table in any deal to prevent the country from heading over the fiscal cliff, right now the debate seems to center on a growing civil war within GOP ranks. Rather than sticking with House Speaker Boehner and strengthening his hand in negotiations, many Republicans are allowing themselves to be panicked into a stand that would effectively allow the president’s plans for tax increases to go forward without any commitments about reforming the tax code or entitlement spending. If the trend continues and a critical mass of Boehner’s caucus breaks, the result will not just be a tactical defeat on a point where Obama may have the country’s support, but a rout that will enable the president to avoid any commitment to significant spending cuts.

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There’s no doubt that a president who has just been re-elected has a lot more leverage in a negotiation than the House Republican leadership. But if President Obama is feeling confident that he can have his way in any deal that prevents the country from heading over the fiscal cliff, it’s not just because of his victory over Mitt Romney earlier this month. The spectacle of House Republicans starting to snipe at each other and tax activist Grover Norquist is evidence that the campaign to pressure Congress into backing tax increases being orchestrated by the White House appears to be working.

While the pushback against Norquist’s heavy-handed attempts to bludgeon Republicans into obedience is understandable, both the anti-tax purists and those more amenable to compromise are playing right into Obama’s hands. Rather than the debate centering on whether tax increases will hurt the economy and the need for Democrats to put entitlement spending on the table in any deal to prevent the country from heading over the fiscal cliff, right now the debate seems to center on a growing civil war within GOP ranks. Rather than sticking with House Speaker Boehner and strengthening his hand in negotiations, many Republicans are allowing themselves to be panicked into a stand that would effectively allow the president’s plans for tax increases to go forward without any commitments about reforming the tax code or entitlement spending. If the trend continues and a critical mass of Boehner’s caucus breaks, the result will not just be a tactical defeat on a point where Obama may have the country’s support, but a rout that will enable the president to avoid any commitment to significant spending cuts.

The president was happy to mention the fact that Oklahoma Republican Tom Cole publicly called yesterday for a quick deal with the White House that would allow some taxes to go up while getting nothing about tax reform or entitlements. Cole isn’t alone; many other Republicans are reading poll numbers that show most Americans support measures that would soak the rich, and think that they are better off ditching their principles than standing firm and getting blamed for the failure to get an agreement.

The danger of Republicans getting the lion’s share of the blame for the country heading over the fiscal cliff is real. It may be that such a view is based on a skewed view of the standoff in which the president’s intransigence and ideological fervor for tax hikes is ignored while Tea Partiers are spoken of as extremists. The president seems eager for just such a debacle since he believes it would hurt his opponents and give him even more support in the next round of budget talks.

But what is starting to look like a rush to the lifeboats by many in the GOP caucus is not only counter-productive; it isn’t necessary.

The rush to a quick agreement would get the GOP off the hook for the crisis. But if they fold quickly rather than allowing Boehner to get them the best deal possible, they will regret it. A bargain may eventually have to be accepted that would allow increased federal revenues. But it is sheer cowardice on the part of Republicans to concede defeat before Democrats have even had to put a rudimentary offer on a more rational tax code or entitlement cuts on the table.

Democrats are right to note that elections have consequences, but that doesn’t mean Republicans need to simply give up. The GOP majority won re-election by pledging to stop the growth of the government and tax increases. That doesn’t mean that they must go to their graves vowing fealty to Norquist’s pledges if a reasonable alternative can be reached that would achieve their long-range goal of changing the system. But to quit the fight now just because some are feeling the pressure being exerted by the mainstream media and the Democrats would doom any hopes for reform over the next two years.

There is no guarantee that if they do stand their ground Obama will listen to reason and compromise on his demands. But if the panic spreads, then House Republicans might as well not even show up in January since the Democrats will have already beaten back their attempt to address the problems they were sent to Washington to fix.

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Tax Hikers Undaunted by California Defeat

In what must be seen as the last piece of bad news for liberals from Tuesday’s election results, California Governor Jerry Brown conceded late yesterday that his attempt to impose an extra $1 tax on cigarettes was turned down by the state’s voters by a narrow margin. But Brown is undaunted by the 51-49 percent defeat for the special tax. He is still planning to put even more wide-ranging tax increases on the ballot in November in an effort to force the most populous state’s citizens to dig deeper to fund the government’s growing deficit. Brown plans to force a vote on sales tax increases as well as imposing higher rates on the wealthy to get closer to balancing a state budget that is projected to be $15.7 billion in the red. He seems sure it will pass.

But given the way taxpayers balked at a hike in taxes on the despised minority that smoke as well as the way voters endorsed referenda in San Diego and ultra-liberal San Jose that cut back on municipal employee pensions, Brown’s confidence may be misplaced. The idea that voters can be blackmailed into approving confiscatory taxes in order to fund the government leviathan may be outdated. That’s something that liberal tax and spend politicians need to take into account. If even deep blue California has realized it’s time to put the brakes on the politicians’ gravy train, there should be no surprise that states like Wisconsin — where the public employee unions and their Democratic allies were prevented from throwing out Gov. Scott Walker — are embracing conservative ideas.

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In what must be seen as the last piece of bad news for liberals from Tuesday’s election results, California Governor Jerry Brown conceded late yesterday that his attempt to impose an extra $1 tax on cigarettes was turned down by the state’s voters by a narrow margin. But Brown is undaunted by the 51-49 percent defeat for the special tax. He is still planning to put even more wide-ranging tax increases on the ballot in November in an effort to force the most populous state’s citizens to dig deeper to fund the government’s growing deficit. Brown plans to force a vote on sales tax increases as well as imposing higher rates on the wealthy to get closer to balancing a state budget that is projected to be $15.7 billion in the red. He seems sure it will pass.

But given the way taxpayers balked at a hike in taxes on the despised minority that smoke as well as the way voters endorsed referenda in San Diego and ultra-liberal San Jose that cut back on municipal employee pensions, Brown’s confidence may be misplaced. The idea that voters can be blackmailed into approving confiscatory taxes in order to fund the government leviathan may be outdated. That’s something that liberal tax and spend politicians need to take into account. If even deep blue California has realized it’s time to put the brakes on the politicians’ gravy train, there should be no surprise that states like Wisconsin — where the public employee unions and their Democratic allies were prevented from throwing out Gov. Scott Walker — are embracing conservative ideas.

Advocates of the cigarette tax hike were shocked by its defeat. Its authors framed the question in such a way as to make it as much a referendum on increasing medical research as making it more expensive to buy smokes. But even that altruistic-sounding premise (backed by the endorsement of people like cyclist and cancer survivor Lance Armstrong) couldn’t outweigh the general disgust of the public with government pocketing more of the people’s money. Liberals sounded their usual sour grapes about being outspent–this time by the tobacco companies–but it could also be that cynicism about whether the taxes would really go to research may have contributed as well as revolt by some usual Democratic constituencies. After all, minorities and the poor are more likely to smoke than the affluent, making cigarette taxes among the most regressive in the government’s arsenal of levies.

There is also the possibility that even Californians are getting sick of the way the nanny state that Brown supports is not just legislating morality but attempting to impose new restrictions on individual liberty. Smoking is unpopular and rightly so as it is a noxious habit that contributes to the deaths of those who smoke as well as annoying those in the vicinity of the smoker. But the increasing resistance to using the tax code to discourage certain types of behavior and encourage others is becoming a significant force in American politics. Citizens are sick and tired of the tyranny of the taxman and the way government officials take it for granted that there is no limit on their ability to put their hands in the pockets of the taxpayers.

This week’s defeat for higher taxes in California as well as support for restrictions on union power there and elsewhere is a wake-up call for politicians to realize that the ideas of Scott Walker and not those of Jerry Brown are the wave of the future.

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