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Lots of buzz today about Republican leaders looking for a way out of their fiscal-cliff dilemma

On the left and right alike — and even in the middle, political pundits and reporters are offering lots of slants these days about the corner into which Republicans have painted themselves with regard to the fiscal-cliff stalemate.

Let’s peruse a few, shall we?

On the right, John Podhoretz of Rupert Murdoch’s New York Post says THIS:

Republicans have a bad hand to play when it comes to the “fiscal cliff” coming up Jan. 1, when taxes will rise automatically on everyone and whopping defense cuts will be imposed automatically.

Did I say a bad hand? Make that a terrible hand. It’s like getting a 3, a 5, a 7, a 10 and a Jack in poker. Only in this game, you can’t trade in any cards — or fold.

The tax cuts enacted in 2001 and 2003 are set to expire. A new piece of legislation must pass the House and Senate and be signed into law by the president to change that.

Republicans, for good economic reasons, want to keep the tax cuts in their entirety. Democrats, for good political reasons, want to keep all of them but the ones for people who earn in excess of some large number — at the least, $250,000.

(Snip)

The truth is, every way you look at it, the GOP is trapped. Republican politicians will cave and give the president most of what he wants. The only real question is when. The answer is: Probably at the worst possible time, when they’ve done even more damage to the party’s “brand.”

On the left, Frank Rich of New York magazine says THIS:

Everyone knows the Republicans are going to fold — the Republicans know they are going to fold — and the only question to be resolved is when and on what terms. They have zero leverage. It’s not only that they lost the election; they continue to decline in national polls, with the latest Pew survey showing that 53 percent of Americans will blame the GOP (and only 27 percent will blame President Obama) if there’s no deal by January. The party has no national leader still standing except John Boehner, who can’t even command the loyalty of his own caucus in the House. Let’s hope that Obama, who is showing the admirable take-no-prisoners toughness he lacked last time around, continues on his current firm path once the Republicans start to buckle. There is a lot more at stake in the negotiations beyond the upper-echelon tax rates that the GOP will soon have to retreat on.

Meanwhile, The New York Times reports THIS:

With President Obama insisting on higher tax rates for affluent Americans and winning public support for the idea, Congressional Republicans find themselves in an increasingly difficult political spot and are quietly beginning to look for a way out.

Senior Republican leadership aides say they are contemplating a fallback position since a standoff over expiring tax rates will be portrayed by Democrats as evidence that the opposition is willing to allow taxes to rise on the middle class to keep taxes from rising on the rich — and their intransigence could mean taxes go up on rich, poor and middle class alike.

The leadership officials now say that if no deal can be struck to avert the automatic expiration of all the Bush-era tax cuts and the onset of deep, across-the-board spending cuts, they could foresee taking up and passing legislation this month to extend the tax cuts for the middle class and then resume the bitter fight over spending and taxes as the nation approaches the next hard deadline: its statutory borrowing limit, which could be reached in late January or February.

And CNN reports THIS:

Taxes on the wealthy are going up, House Speaker John Boehner conceded Wednesday in challenging President Barack Obama to sit down with him to hammer out a deal for avoiding the fiscal cliff.

Obama, however, continued to insist on Republicans first ensuring no tax hike for anyone but the top 2% of Americans as a first step toward a broader agreement on tackling the nation’s chronic federal deficits and debt.

The statements reflected how negotiations on the automatic spending cuts and tax hikes set to occur on January 1 — the fiscal cliff — have evolved since Obama’s re-election last month.

Republicans once opposed to any new revenue in their quest to shrink government now realize Obama’s victory and public support for the president’s campaign theme of higher taxes on the wealthy leave them with little negotiating leverage.

Less than four weeks from the fiscal cliff, GOP leaders face a choice: Agreeing to Obama’s demand to hold down tax rates on most Americans while allowing higher rates on top earners, or being blamed for everyone’s taxes going up in 2013.

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26 Comments

  1. Two thoughts

    – From an IT perspective, the longer we wait for a deal, the harder it becomes to update all the payroll systems to reflect any changes in tax policy. Its not as simple as just updating a few lines of code. There are change control procedures, EDI feeds, a whole bunch of stuff.

    – Pat forgot to mention this worthy take from the Washington Times:

    “The left has railed against the “Bush tax cuts for the rich” for a decade. (Start preparing those YouTube video montages now.) Democrats’ dishonesty will be fully exposed, as the typical middle-class family of four who once bought into the anti-Bush mythology sees their taxes go up by $2,200. If the Bush tax cuts were only for the rich, the difference must be what we’ll call the Obama tax hikes.

    Democrats hate the Bush tax cuts on a visceral level. In their minds, those cuts caused the recession, exploded the debt and are the root of all evil. If undoing them makes things worse — and it will — Democrats have some serious explaining to do.”

    http://www.washingtontimes.com/news/2012/dec/4/gop-should-fear-voters-not-the-fiscal-cliff/

  2. Nef – “Worthy take” from the Moonie ALEC funder rag. Always good for a laugh.

  3. http://online.wsj.com/article/SB10001424127887323501404578161483449849070.html?mod=WSJ_Opinion_LEADTop

    Presidents, kings, queens, generals all have accomplished a modus vivendi with their opponents and mortal enemies. Until now. What deal of Clintonesque majesty has Barack Obama ever pulled off?

    The fiscal-cliff negotiation is a train driven by an engineer who doesn’t know how to use the brake, doesn’t know where the brake is and doesn’t care. His idea of politics is giving campaign speeches outside Washington to assemble a Sandy of public sentiment that will blow congressional Republicans off the cliff.

    Politics ain’t beanbag, but it also isn’t just about politics. While Barack Obama may think his election mandate includes the ruin of the Republican Party, Republicans seeking a strategy of self-preservation should assert their refusal to participate in the ruin of the nation. As it is, the fiscal cliff has degenerated into a familiar Beltway melodrama in which the media reduce the whole thing to which party gets shafted. As to the health of the gasping American economy, well, whatever.

    Conventional wisdom holds that the sequester is a mindless anti-spending Godzilla. But the sequester, because it is set in legislative stone, possesses what Washington today lacks with the public: credibility.

    The only issue on the cliff negotiation table held true by every serious person is that the entitlement crisis is going to crush the country. But nothing is dearer to this president than higher taxes on people defined by him as the wealthiest. If the president’s DNA prevents him from a compromise that also includes a sequester-strength commitment to disarming the entitlement bombs, much less discretionary spending, take the sequester. Better the fiscal cliff than pitching the American people over the bottomless entitlement cliff.

    Liberal commentators like to cite Ronald Reagan and Tip O’Neill as a case study in political compromise. Barack Obama has become a case study of a president unable to compromise—with John Boehner or anyone else. The sense here is that as the cliff approaches, more people are beginning to understand this grim reality.

  4. Brian Opsahl

    Yes your absolutly Right, Doc: middle class voters are about to see who has there back, and who doesen’t, as your republicans continue to hold out for the ultra-rich at the expence of us middle class folks…!! even after more than 4.4 million votes more for Mr.Obama, told the republicans loud and clear what we wanted from our Goverment…Boehner is demanding a worse deal than he presented over a year ago…before losing the election…So Doc, yes we are watching very closly to see if republicans throw us middle classers under the bus or NOT…!!

  5. Jeremy Cantrell

    expdoc,

    I do not think the Obama administration needs to do a single thing to bring about the ruin of the GOP, they’ve steadily marched towards that goal for the past 16 years.
    Your words are very eloquent and chosen wisely to heap piles of bullshit on this crap sandwich your serving.
    “every serious person”, “assemble a Sandy of public sentiment” All dandy’s for sure!

    You say Obama won’t compromise, but millions say he needed to be tougher and their getting that wish.

    Your Republican grass roots movement is whats going to tear the GOP apart, one Palin, Johnson and Angle at a time.

  6. Brian Opsahl

    Yes, Jeremy i could NOT have said it better….!!

  7. Thomas Sowell. Know him? Google his name. He’s Black. VERY…smart man. Read his words. The GOP and conservative thought may have taken one on the chin (much of their own doing). But you can bet the ranch they’ll be around for a long time….

    Obama’s plan to Increase rates on the upper income earners is just a foot in the door to get to where the real $$$ are at. The Middle class. Which is why he won’t negotiate in good faith. All he has to do is wait this out….

  8. Brian Opsahl

    Ed, pull your head out of your rectum….The President has repeated over and over his plan NOT to tax the middle class…Ed what more can be said…he has ran on this position for more than 2 years..

  9. Jeremy Cantrell

    Ed,

    I find it ludicrous that conservatives cannot seem to see what a majority of America seen in the last election. It’s like the GOP politically waterboarded you into believing Obama can do no good, even though it’s in front of your face daily.

    Also take notice, it’s only conservatives who keep pining over the GOP disappearing, almost like you feel it’s a possibility. With that said, I think your going to have to change the name to “teaservatives” or possibly ENC “Extreme Neo-conservatives” to allow that the tea party Republicans are running things…that is running them straight into oblivion.

    Even MSNBC’s talking points are geared towards the GOP having to change, not disappear. Possibly your emotion driven, fear mongering party’s ways have started to effect the inside more than the out.

    you realize you’ve driven away from GOP talking points by saying the real money is with the middle class. The GOP has spoon fed it’s base the line that the real money is with “the job creators” for so long…I see a spark of hope for you.

    Ed, your liberal is showing……

    Jeremy

  10. No, the real money is in the middle class and it will eventually be eroded even further unless the economy starts to roar.

    Economic growth, not soaking the rich, is the only possible fix for our economic and budgetary woes.

  11. Expdoc says this: “Economic growth, not soaking the rich, is the only possible fix for our economic and budgetary woes.”

    He thinks a return to the tax rates of the Clinton presidency, under which the economy boomed, amount to soaking the rich.

    Yeah, don’t let the facts get in your way, doc. Your right-wing Republicans lords and masters have spoken, and it behooves you to parrot their nonsense.

    By the way, doc, have I missed it or have you had nothing to say about your good buddy Ron Johnson voting against the disabilities treaty? I’ll bet you were really proud of that, especially as a man of medicine.

  12. Luke Fredrickson

    Treating investment profit as regular income is not “soaking” anyone. The contention that big government welfare programs for rich people help everyone was debunked years ago. Revenue goes down. The economy gets no boost. Fortunes get stashed in foreign banks by lying cultists who claim to be patriots.

    Just ask Mr. Trickle Down himself. David Stockman will tell you there is just no economic rationale for giving the rich the equivalent of food stamps they can use each tax season.

    Our great country cannot afford to keep these dependent leeches on the federal dole. These welfare recipients become dependent on government. They believe they are victims. They believe the goverment should care for them – that it’s an entitlement, and the government should give it to them.

    Oh well. I’ll never convince them they should take personal responsibility and care for their lives. My job is not to worry about those people.

  13. Luke Fredrickson

    Treating investment profit as regular income is not “soaking” anyone. The contention that big government welfare programs for rich people help everyone was debunked years ago. Revenue goes down. The economy gets no boost. Fortunes get stashed in foreign banks by lying pigs who claim to be patriots.

    Just ask Mr. Trickle Down himself. David Stockman will tell you there is just no economic rationale for giving the rich the equivalent of food stamps they can use each tax season.

    Our great country cannot afford to keep these dependent leeches on the federal dole. These welfare recipients become dependent on government. They believe they are victims. They believe the goverment should care for them – that it’s an entitlement, and the government should give it to them.

    Oh well. I’ll never convince them they should take personal responsibility and care for their lives. My job is not to worry about those people.

  14. Many (not all) of the rich and super rich people in this country involve themselves in multiple businesses and investment ventures. chances are that along the way they created some new taxpayers and quite possibly even some new rich people wo created some even newer taxpayers etc…
    If I’m one of these folks who in many cases have risked everyting (see FEDEX) to do this, and I’m rewarded by being villanized in the public domain…..guess what….I’m taking Me and My $$$ to a beach and forget about investing in any more businesses that might make me some more $$$ and create some more taxpayers and maybe even some new rich people…..

  15. Oh…and as a side-bar. The thing about sending jobs offshore. If that bugs you, then you might want to put Wal-Mart on your “Never gonna shop there again” list. They…encourage their vendors to move off shore to get cost down. You can read about this by searching the archives of FORTUNE SMALL BUSINESS and look for the article about Troy-Built Mowers… they tried to get them to move their operations off shor out of Georgia. The CEO politely told them to pound sand..In person.
    Things are not always as they seem.

  16. Brian Opsahl

    So Ed, Would you call this “I’m taking my ball and going home routine” is that what your doing …all because Americans chose a progressive way of life. Your lucky to have such an option as to just walk away and land on a beach somewhere, but instead of saying something bitter to you, I would just say good luck and enjoy the rest of your time. I hear that the Camen Islands is a favorite choice of the Bush’s and Romney s for hiding the money they made in America from paying any taxes….Try there..!!

  17. Brian, read All of the words. If you can’t totally comprehend them, perhaps you could let someone interpet them for you. I’m not rich…far from it. You missed the point by 180 degrees. But…thanks for not throwing an insult my way….you’re learning

  18. Brian Opsahl

    Ed, I went over what you wrote and you implyed that you were taking your money and going to a beach and forget about investing….in my world that means your retiring to a beach….Hello !! hello..!! Mcfly..i am NOT a mind reader i corresponded to what you said..?
    I do NOT shop at any Walmarts…they cheet there employees and 3 of the top 10 billionares are Walton kids and CEOs…there billionares and most of there employees Qualify for welfare ther are so low paid…also I buy Local and American whenever possible…TNX

  19. Pat,

    Soak may be too strong of a word choice, but when income tax rates go north of 50% (federal plus state) that has gone beyond what is reasonable. I have always said I am willing to pay my “fair share” of taxes as I do every year. But I have little confidence that our current leadership will control spending to the degree that it must be controlled.

    Luke,

    Taxing investment income as ordinary income may generate some revenue, but it won’t generate more investment. What do you think we need to do to grow the economy? If you want to decrease an activity, then you tax it. Why would you want to decrease investment? What do you think we need to do to grow the economy?

    I would challenge you both to make a note of projected revenue from any tax increases proposed in the final “deal” and then check back and see how far revenue will fall short of projected values with any taxes we add.

    The best way to increase revenue is to grow the economy. Attacking business, particularly smaller business with increasing taxes, mandates and regulations will only decrease any economic growth we may have hoped for.

  20. Brian Opsahl

    Worked under Clinton…did it Not..!! After 8 years of Busheconomics….we need to try a differant plan…Doc…suck it up your guys lost..!!

  21. doc: Your claim that the tax burden has or soon will have “gone beyond what is reasonable” is pure poppycock. Where do you get that nonsense?

    The truth is that the overall tax bite (federal, state and local) on Americans is less now than it was in 1980.

    And why do you persist in opposing an increase in tax rates on the rich to where they were under Clinton, when the economy was booming and budgets were balanced? I’m guessing you do so because that’s what the Republican demagogues in Congress do. You are pathologically unable to disagree with them and agree with Obama.

  22. By the way, doc, I’m still waiting for your take on Ron Johnson’s vote against the disabilities treaty. After all, this Tea Party nutcase is one of your heroes, isn’t he?

  23. “The truth is that the overall tax bite (federal, state and local) on Americans is less now than it was in 1980.”

    The truth is that the overall tax rate on ALL Americans has to go up. Not just on the rich, but on all Americans. In addition, the absolute amount of federal spending has to decrease. Simple math facts cannot be avoided despite the politicians who continue to want to promise more spending.

    And by the way, I do think tax rates exceeding 50% are unreasonable. And they are already here in some states, with many more to follow.

    http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2176526

    This paper compares state-by-state estimates of the top marginal effective tax rates (METRs) on wages, interest, dividends, capital gains, and business income for tax year 2012 to the rates scheduled for 2013 under scheduled law. Scheduled tax law for 2013 assumes the expiration of the 2001 and 2003 tax cuts and the new PPACA taxes. Overall, the average top METR on wage income is scheduled to increase by approximately six percentage points (41.8 percent to 47.8 perent), while taxes on dividends would increase the greatest (19.0 percent to 47.9 percent). The top METRs on wages, dividends, interest, and partnership/sole proprietor income would exceed 50 percent in California, Hawaii, and New York City.

  24. Brian Opsahl

    Doc: you live in the most Powerful Nation on earth. We have the strongest Military, Man has ever known, You drive your car on interstate highway over massive bridges all over Our Country for all that we pay taxes…if your one of them that will have to pay a little more suck it up SIR..! ..Now you know how I feel after all those years of watching CEO after CEO and hedge fund managers and Bankers paying themselves like GODS all while sticking it to the rest of us ever since Reagan was elected…Boohoo you..you can afford it we can not…!!

  25. Now Brian, where did I say that ALL government is bad? No, what I said, is that government that recklessly spends our money is bad. I have said that politicians who build their power base by increasing the dependence of my fellow citizens on government are bad.

    And I know you can’t afford it. That is why I am so sad that:

    A) You will also have to pay for it. As will my children and your children and probably their children as well.

    B) Liberals are so dependent on government to define their very existence and happiness.

  26. Brian Opsahl

    Now Doc: If you really care about the deficit why are you NOT a Democrat….Just do a little math doc….Reagan,Bush 1 and 2 Ran up more credit card dept than any Presidents in our History, Clinton left GW Bush a budget surplus did he NOT..!!…Now you want to blame all this credit card spending on Mr. Obama….Really Doc:…!!

    I am a Liberal and never once took a dime from the US Government…ever..!!
    But im betting that you take payments from the Government all the time..Sir !!

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