Friday, November 30, 2012

GOP Rejects Obama Opening Bid in Fiscal Cliff Negotiations

At the clip is Donald Marron of the Urban-Brookings Tax Policy Center, a center-left think tank. Taxes are going to hit just about everyone if we go over the cliff, and hit hard.

Meanwhile, the White House's opening bid is a staggering example of progressive extremism and contempt for commonsense budget discipline. Especially egregious is the call for increasing the federal government's debt limit. The Los Angeles Times reports, "Boehner: 'Fiscal cliff' talks hit 'stalemate'":

Republicans had harsh words for the offer Obama’s Treasury secretary presented this week to avert the year-end fiscal crisis of automatic tax hikes and spending cuts. Obama proposed generating new revenue by allowing existing tax rates on to expire for those earning above $250,000 for couples, or $200,000 for single households. The highest rate would revert from 35% to 39.6%. Obama would also end the historically low 15% tax rate on capital gains and dividends for these upper-income households, taxing dividends at ordinary income tax rates and increasing the capital gains rate to 20%.

“Laughable” and “absolutely insulting” were among the comments coming from Republicans over the White House offer, which was essentially a reprise of the president’s earlier budget proposal to Congress. GOP lawmakers also objected to Obama’s calls to renew stimulus spending to spur the economy, aid homeowners in refinancing mortgages and extend long-term unemployment benefits.

Republicans want Obama to put deeper spending cuts on the table in exchange for their offer to produce new revenue by capping deductions and lowering rates to generate economic growth – a proposal that experts say does not add up unless you extract more money from middle-class households.

“Increasing tax rates draws money away from our economy that needs to be invested in our economy to put people back to work,” Boehner said. “It’s the wrong approach.”

As Obama seizes the bully-pulpit in a very high-profile public relations campaign, Republicans have both criticized and copied the approach – embarking on their own counter-campaign on Twitter and traditional media, while complaining the president should spend more time negotiating in Washington.

Republicans took particular aim at Obama’s visit Friday to a small business, as they argued that companies would be especially hurt by the tax hikes because many owners of small businesses file individual income tax returns.

Studies have shown nearly 3% of the small businesses earn enough income to be hit by the higher tax, about 900,000 businesses.

No talks are scheduled as the impasse deepens. If no agreement is reached by year's end, the combination of higher taxes and deep spending cuts would rattle the fragile economy. Tax rates are set to automatically rise on Jan. 1 – resulting in a $2,200 tax hike on ordinary Americans; at the same time, previously agreed to spending cuts would begin Jan. 2, slicing through the federal budget.

Doing nothing could tip the economy into another recession, economists have warned, especially as Wall Street is eager for a deal that would fundamentally reform tax and spending to lower the nation’s annual deficits.
And see also Charles Krauthammer, "Cliff-jumping with Barack":
Obama is claiming an electoral mandate to raise taxes on the top 2 percent. Perhaps, but remember those incessant campaign ads promising a return to the economic nirvana of the Clinton years? Well, George W. Bush cut rates across the board, not just for the top 2 percent. Going back to the Clinton rates means middle-class tax hikes that yield four times the revenue that you get from just the rich.

So give Obama the full Clinton. Let him live with that. And with what also lies on the other side of the cliff: 28 million Americans newly subject to the ruinous alternative minimum tax.

Republicans must stop acting like supplicants. If Obama so loves those Clinton rates, Republicans should say: Then go over the cliff and have them all.
Hear, hear. Fuck Obama. I don't believe at all that he has the upper hand in negotiations. His political capital is limited. He's a lame duck now. It's four and out after January 20th, unless he's able to declare himself president-for-life, a possibility with a snowball's chance for even this authoritarian of an administration. Republican should hang a rejection of the deal like a Christmas wreath around the president's neck. Send him home for the holidays with those tax increases. Everyone will get plenty of the blame, but bet your bottom dollar that the public won't buy the argument that it's all the GOP's fault. This White House said that it wouldn't raise taxes on the middle class, a pledge that's already being broken with the ObamaCare monstrosity. Another shot of tax increases will only wear the patience of a public that decided to give the president more time to fix the economy. Instead they'll find the he fixed their finances for the worse.

I'll have more. Meanwhile, there's lots more at Memeorandum.