Daniel Gross is right. The Republicans don’t have a plan and they don’t seem to understand what is happening to them. They have, however, finally made a counteroffer. Their offer is to raise $800 billion over ten years by reducing loopholes and deductions in the tax code. Of course, that is non-responsive to the administration’s repeated demand that the highest marginal tax rates go back up to a Clinton Era level. Floating Erskine Bowles’ plan (which is distinct from the Simpson-Bowles Report) is a little more constructive and actually signals some small sign of movement, but it is still non-responsive.
It appears that the Republicans have not internalized the fact that the Democrats are perfectly content to go over the fiscal cliff. It’s just not worth it to the Democrats to pass up this opportunity to break the Republicans’ psychosis about marginal tax rates. If they are unwilling to compromise because taxes will rise 4.6% on income over $250,000 then they cannot be negotiated with at all.
Loopholes? Which ones?
Cutting Medicare? Didn’t they just finish a campaign saying they weren’t gonna be like Obama and cut Medicare?
I heard one of the GOP leadership, Boehner or Graham, say on the news that they would limit deductions as a percentage of gross income. Nice huh? If you make four million dollars you get a limit a hundred times higher than the guy making forty thousand. Deductions used to be phased out starting at around $100K AGI. Did Bush repeal that? No wonder they want to talk about deductions and have a high limit on the rich. If we go back to the Clinton rules, the rich will have no deductions at all.
So it’s just another GOP plan to squeeze the middle to pay for the top. Just go over the cliff and forget the kid credit and $800 for everybody and starving SS by tax cut. That last one was a really bad idea and I said so at the time. Booman said, “No NO, it’s only for a year!”, but now, as I feared, people view it as a tax increase instead of the end of a temporary cut.
This is actually a very real possibility. Then what? I wonder if there is a possibility of a coup in congressional republican leadership. I’d really like someone like Tom Cole, Alan Simpson or Shellery Moore Capito as Speaker of the house; not that they are any less right wing than Boner and Cantor, but they are people with whom negotiation is possible
If there’s a coup in the House Republican caucus it will come from the right—led by Cantor and Ryan with the support of the tea partiers. Roughly 2/3 of House Republicans won with 60% or more of the popular vote in their district last month. Their worst political fear is a primary challenge from the right.
That’s the bind Boehner is in. What’s different this time is the power equation has shifted in the Democrats’ favor, and there seems to be an increased awareness in the White House that it’s not the president’s job to solve the speaker’s problems with his caucus.
Erskine slaps Boehner’s mouth.
BAM! ” You, suh, are no gentleman.”
The GOS has the scoop:
https://twitter.com/damianpaletta/status/275716594271916033
Bowles is running from this like a scalded cat.
I’m getting confused here. I thought that if the Bush tax cuts expire we return to Clinton tax law and rates. I did not think those Clinton taxes were marginal, you hit the next bracket and you pay the higher rate on the whole thing. Obama seems careful to always specify returning to Clinton rates, not the Clinton tax law. The Clinton taxes would generate a lot more revenue than the Clinton rates under a marginal tax system for those over $250k. If this is true the people just over $250k would have a great deal at stake.
you hit the next bracket and you pay the higher rate on the whole thing.
As far as I know, this has never been so.
I can see the reasoning for it, but I was also not aware this was the case until Drum went on his screed against raising the social security tax limits.
I don’t know where you got that idea. Marginal tax rates haven’t changed. You pay each rate in succession until you are in the highest bracket. The Bush tax cuts simply lowered the marginal rates in each category. And then he cut the taxes on unearned income the second time around.
I apologize for piling on, but you raise a really important point. All the “Clinton tax rates” came about as a result of “Clinton tax law” in which all of the progressively higher tax rates for higher incomes were marginal tax rates. (It’s in the interests of Republicans and their wealthy sponsors to create confusion on precisely this point, so don’t feel too badly about misunderstanding what’s at stake.)
Income tax has never worked like that.
Harry Reid slaps Boehner in the mouth:
These negotiations are a great object lesson in what more people are learning every day: the GOP protects the rich only. I hope people are tuning in to political news after the election, in the holiday season: the more people pay attention, the more damage this does to republicans
Fox News is pounding the theme that unless Obama gives in, taxes will rise at least $2000 on everyone and the country will be thrown into deep recession. Untrue on both counts, but that’s what people will believe.
The people who watch Faux News already believe he’s a klepto-facist-Muslim-terrorist-ursuper. I don’t Obama is worrying too much about what they think.
In this circumstance, I envision the Republicans being just like the person who sees a tornado heading straight for them. And rather than seek safety, they stand there staring in awe until the vortex plucks them off the ground and deposits their broken body a half a mile away and 30 feet up in a tree.
The perfect cliche: “deer in the headlights”
Or leaves them untouched on a chair in their yard. Tornadoes are unpredictable in the extreme.
I am reminded of Wile E Coyote going over the cliff after he misses his chance at the roadrunner. The coyote being Speaker Boehner.
Yeah! The way he rushes out and then slows down. The stupid look on his bug-eyed face. Then he starts to fall with a whistle like a WWII bomb. Then the puff of dust way below.
Perfect analogy.
We need to work ACME Budget in there somewhere.
Isn’t ACME already a defense contractor?
I snorted when the House Republicans’ letter called the recent election a “status quo election”. As I see it, the GOP had negotiated assuming Obama would be unseated. He wasn’t, so I’d say the status quo has changed. They’re trying to deny that elections have consequences.
If they can’t make any offer that doesn’t involve Dems eating a super-size shit sandwich, then it’s going to be a long four years. (Dare I hope TWO years, if the GOP really bungles this?)
Unfortunately all one hears on the Sunday talk shows is, “Both Democrats and Republicans are unwilling to compromise for the good of the country.”
Stop listening to George Will. 🙂
It’s not just George Will. It was all over CBS This Morning and the CBS News website. More of that both sides do it stuff. False equivalencies everywhere. One wishes one could force-feed that Swampland/Time Magazine blog piece by Michael Grunwald to everyone of the MSM “journalists”.
Robert Reich has a few pertinent suggestions.
Rep’s would go farther if they took Obama’s 2%er raise; went for a bigger stimulus (getting Luntz to rename it so that it would fly with the TBaggers) and count on the economy’s uptick to bring in more revenue instead of making cuts to entitlements.
Entitlements are experiencing a 2nd love affair with the American electorate. There’s narry a one that people, when asked directly, are willing to see cut much less forego. Let them go R’s.