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.
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.
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.
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.
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.
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
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 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.
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.
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.
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.
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.
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.