Thursday, December 6, 2012

Another GOPer Calls to Extend Middle Class Tax Cuts Now

     Yesterday Tom Coburn came out and went so far as saying he'd rather raise tax rates on the rich than cut deductions-which ever ones those might be as Boehner and friends never give us a hint what they have in mind. It's one thing to say they should do it out of expediency but he took it the furthest a Republican has yet.

     While that was good to hear, Coburn is a Senator and the issue is the House-the tax cuts have already been extended in the Senate; in this case, at least, McConnell chose not to filibuster. Last night, another House Republican came out for passing the Senate bill as is-effectively allowing the top rates to expire.

     "Rep. Kay Granger (R-TX) on Wednesday endorsed top GOP Rep. Tom Cole’s (R-OK) call to extend all tax cuts for the middle class right away, calling it “just the right thing to do," according to Bloomberg News."

      It seems a lot of people are starting to get that this is going to happen and maybe even should happen. Geithner was very clear on CNBC yesterday: the rates are going up. There is no agreement that keeps those tax cuts for the rich.

     "During an interview with CNBC, Geithner was asked if the White House was willing to dive off the cliff if Republicans don’t accept a deal that raises tax rates for those making more than $250,000."

      “Oh, absolutely," he responded. "Again, there's no prospect in an agreement that doesn't involve the rates going up on the top 2 percent of the wealthiest."

      "Geithner’s comments offer the strongest indication that Obama would accept the automatic spending cuts and tax rate increases that kick in if an agreement is not reached before the Dec. 31 deadline."

      Say what you want about Geithner-some don't like him as, of course, he's from the NY banking elite, but having said that I've always liked him and think he's one of the good guys-he's been a great point man for the President during these negotiations. Of course, it's even more gratifying because it really sticks in the GOP''s craw when Obama sends him out to give his message-especially when Geithner delivered Obama's proposal.

      As Greg Sargent pointed out, the reason to think that Obama will not negotiate on the debt ceiling this time-denying Boehner any "leverage"-is they way he and the Democrats have negotiated the fiscal cliff. They simply aren't negotiating. They are willing to go over if that's what the GOP wants to do and it seems likely that this will be the attitude with the debt ceiling. It's not irresponsible; facing an irresponsible opposition, it's the only responsible thing they can do.

     Sargent predicts that if the GOP tries to use the debt ceiling again as a hostage this is what will happen:

     "So here’s a prediction: If this happens, Obama will refuse to negotiate over the debt limit, just as he’s refusing to negotiate over tax rates on the rich. The message will be clear: We’re not talking, if the debt ceiling — and the nation’s economy — have a gun pointed at their head."

      "Now, it’s true that if the middle class tax cuts are extended, Democrats lose a key piece of their leverage, and the remaining things Dems will want — an extension of the payroll tax cut and unemployment insurance, and a rise in the debt limit — will give Republicans a basis for renewing the push for deep entitlement cuts. But there is reason to believe that this time, Obama and Democrats will tell Republicans that they won’t brook the debt ceiling having any part in the talks."

      "The argument is straightforward: This isn’t 2011 anymore. Last time, Republicans had won an election; this time, Obama and Democrats won. Polls show the public increasingly sees Republicans as the intransigent party and the primary obstacle to compromise in Washington. The economy is on the mend; by threatening another drawn out debt limit battle, Republicans are recklessly putting the recovery at risk. The GOP’s brand is in tatters, and the party will ultimately cave on this point rather than risk more public blame for threatening to tank the economy again. Powerful GOP-aligned interests in the business community, including the Chamber of Commerce, won’t tolerate another debt ceiling fight. Having perennial fights over whether the country will pay its bills is no way to govern, and it simply must stop. The only way to put an end to this madness is to refuse to negotiate if the GOP insists on trying it again. Therefore, no discussions over the debt ceiling. Period."

    This seems very plausible to me. Though I know many worry that the Dems are at any moment about to fold, I don't believe that for one moment. As Sargent says, it's not 2011 anymore. They get it. As he says:

    "This may sound like an optimistic prediction, but this is exactly what’s happening over whether to raise tax rates on the rich: Dems are refusing to negotiate. If Republicans seriously attempt a rerun of the 2011 debt ceiling playbook, my bet is this is how things will unfold."

     I'll buy into that bet.

     It's not only Republican Congressmen who are beginning to get it. The business community is becoming hip to the fact that with all the talk about business confidence these hostage negotiations over the fiscal cliff and the debt ceiling are not exactly good for business. Surely, the business community doesn't want to see the debt ceiling become a bargaining chip every 6 months either.

    It seems likely that Republican leaning groups like the Chamber of Commerce certainly aren't going to want to see that. Recall that David Koch joke back during the 2011 game of debt ceiling chicken where he said maybe it was time to get rid of some of these Tea Party obstructionists if they messed it up.

    Perhaps a point that hasn't been explored enough is that the Tea Party is very ideologically pure. They are much more responsive to Right wing ideological purity than because some traditionally Republican business groups desire something. I guess some might say at least they're principled. For me, though, I've always believed that it's possible to be too principled. The world is a messy place.

    Obama has spoken to some business groups about the debt ceiling.

     For more on Obama's outreach to the business community in making common cause on the debt ceiling and fiscal cliff see here.

    Geithner spoke about some business people who now get that taxes must go up for the rich:

     "The treasury secretary, who has played the role of leading negotiator on behalf of the White House in fiscal cliff talks with Congress, also noted that businesses and investors are opening up to the idea of tax rates rising -- a shift reflected in comments made by several top executives earlier this week."

     "FedEx Chairman and CEO Fred Smith, an adviser to Sen. John McCain's 2008 presidential campaign, on Tuesday referred to the notion that tax hikes on the richest Americans would kill jobs as "mythology." And on Monday, a group of the nation's top defense executives took a surprising turn, endorsing tax rate increases on the wealthy."

    “I think there's broad recognition that rates are going to go up as part of a deal,” Geithner said. “I think that's a welcome change.”

      Yes, there are quite a few welcome changes around here lately.


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