Many liberals have lamented (and some conservatives boasted) that Senate Majority Leader Harry Reid’s (D., Nev.) deficit plan consists entirely of spending cuts. Hardly. To start, Reid’s plan proposes to set revenue levels according the Congressional Budget Office baseline, which follows current law, as opposed to current policy. Current law, of course, assumes the expiration of certain business tax extenders, the Alternative Minimum Tax patch, and the Bush tax rates. So in effect, Reid’s plan assumes an overall tax hike of about $3.5 trillion to $3.8 trillion over ten years.
Not only that, but a Republican source tells me that Democrats are currently negotiating for automatic tax increases as part of a trigger mechanism that will go into effect if the bipartisan committee called for in Reid’s (and Boehner’s) plan fails to reach an agreement on an additional $1.2 trillion to $1.8 trillion in deficit reduction. Several GOP Senators confirm that this is the primary hang-up in the ongoing negotiations. Meanwhile, Senate Budget Committee chairman Kent Conrad (D., N.D.) has been shuttling back and forth between Reid and Mitch McConnell’s offices in an effort to negotiate a solution, but tells reporters there’s still no deal.
Let's see... committee of 12, 6 from each side. Automatic tax increases if spending cuts can't be agreed upon.
I can't believe the GOP isn't stampeding to jump on this bandwagon!! Surely, 6 Dems wouldn't sabotage the spending cut agreement for political gain. They would be able to get their tax increases, no spending cuts AND be able to blame Repubs for the whole thing. Hat trick, indeed!
Reply to this commentLinkReport AbuseGod help the GOP if McConnell agrees to any legislation that allows the Bush tax cuts to expire.
Reply to this commentLinkReport AbuseAny tax increase would be a catastrophe and the death of the Republican party. Surely they are not that stupid?
Reply to this commentLinkReport AbusePathetically, Congressional Republicans are always trying to duck having to make discriminating tough choices. They just can't seem to stop themselves for pursuing one damnable comprehensive deal after another. They always want to wave a sheath of papers at us and announce some issue is all fixed up (so they can then get back to their fundraising).
The only way out of this mess is to dismantle it piece by piece. We don't need any more bills consisting of hundreds of pages. I see no reason why the Republicans should be dealing on anything that's not in the here and now. The Republicans need to get away from the deals the Democrats are seeking and keep at the hard work of getting us out of debt.
Reply to this commentLinkReport AbuseWell, thank goodness House Republicans wised up and passed the Boehner plan on Friday.
That showed 'em!
Am I the only one who remembers that blaming Republicans for a government shutdown has been the Democrat plan since at least last fall? What has changed?
Reply to this commentLinkReport AbuseYou're missing what's happening here. The reason why the Democrats are feverishly seeking a deal this weekend is precisely because they now fear a government shutdown.
It's true, Obama and most of the Democrats probably have wanted a shutdown in the past. But that all went out the window when the House Republicans passed the Boehner bill containing a requirement for a Balanced Budget Amendment. With the Democrat Senate having killed that bill, and with no way to pass one of their own preference, the Democrats were now painted into a corner.
Their only way out is to sucker the Republicans into rescuing them with a stupid deal.
Reply to this commentLinkReport Abuse- "The Democrats are now painted into a corner. Their only way out is to sucker the Republicans into rescuing them with a stupid deal."
The Democrats have multiple ways out. None of these are ideal, but the may look better to the Democrats than just caving.
1) Make a big play that there is no way the Boehner bill can pass the Senate (which is true enough), so what is needed is for the Senate to pass its own bill and a compromise between the two be made, but the Republicans are stopping that with a filibuster. This way there is no bill that Obama has to veto and the blame for no bill can be put on Republican 'extremists'. Then start witholding those social security checks until the Republicans drop the filibuster.
When the economy starts to tank, as it probably will, put blame on those same Republican 'extremists' who won't compromise and won't allow a vote in the Senate. This has the added attraction for the Dems that any further bad news on the economy that would have happened anyway can now be dumped on the Republicans.
2) Go the 14th amendment route, and let the Republicans sue to stop the sending out of social security. This has the disadvantage of probably not being legally correct, but many think the Supreme Court would stay out of it. This seems to be what many Dem congressmen want Obama to do.
3) Tell the Republicans no deal and go the platinum supercoin route. From what I can judge, this is explicitly legal by passed statue of Congress in the 1990's and is economically equivalent to just ignoring the debt ceiling while technically following it.
One can even argue it is the only legal thing Obama can do if Congress passes laws mandating social security spending, and then won't raise taxes or allow borrowing to get the money to pay for the legally mandated spending. In fact, it solves all of his problems so perfectly in one fell swoop, I personally think the main reason he isn't preparing for it right now is that he is not too bright about economic matters.
Reply to this commentLinkReport AbuseNothing changed when the Boehner bill passed. Cut, Cap and Balance had already passed, with more votes, (including Democrat votes) a couple of weeks ago. The Senate killed it, sat on their hands and complained about intransigent Republicans - a chorus many in the conservative commentariat joined.
Democrats are simply using the artificial deadline to force Republicans to agree to something stupid. But Democrats absolutely do not fear shutting down the government, because their tune has not changed one bit: it will be the Republicans' fault if it shuts down, and to the Republicans' credit when Democrats get their $2.6 trillion extension, no spending cuts and maybe some new taxes.
If sending a bill to the Senate was calling Reid and Obama's hand, that was done two weeks ago. Instead of playing that out, the Boehner bill just gave ground for no reason. It's no wonder Democrats think they can sucker Republicans into a stupid deal.
Reply to this commentLinkReport Abuse"Their only way out is to sucker the Republicans into rescuing them with a stupid deal." ... which is exactly what will happen. When they do, it may produce a bump for Bachmann and Perry.
Reply to this commentLinkReport AbuseDemocrats really are like the junkie in that new commercial. They cant stop wanting more of the tax-crack and will do anything at all to get it.
If anyone thought that those new taxes would really go toward paying down the debt, it might be palatable. But no one believes that. All they want is more money to spend.
Reply to this commentLinkReport AbuseTwo points:
If Obama/Dems wanting to raise taxes within the federal income tax scheme, why didn't they do it 2009/2010 when they had massive majorities to do so? Because they were too fricken chicken. At least Clinton, with less of a liberal majority in 1993/4 was able to push through income taxes increases to pay for his programs.
Second, I think we all wish 2010 election had done better on Senate side, considering the landslide in the house. Nevada, Delaware, WA State, etc were states that GOP should have been able to pick up. Current debt talk would be a lot different if GOP had won a few more of those Senate seats in 2010.
Reply to this commentLinkReport AbuseI think that Andrew manages to miss the point, even while explicitly stating it.
The expiration of the Bush tax cuts, the AMT, etc., etc, are already law. The Boehner does nothing to make them any more real than they already are.
All that setting his revenue forecasts according to the assumption that these tax increases will actually happen does is make the forecasts wrong if they don't happen and right if they do. It does NOTHING to make them more likely to actually happen.
Reply to this commentLinkReport AbuseAnd there should be automatic tax increases in any budget plan otherwise any of these committees will accomplish nothing.
Reply to this commentLinkReport AbuseIt was predicable that with Obama in the mix again, taxes would rise up like a zombie. With an automatic tax trigger if the special budget committee can't agree on additional cuts, all Democrats need to do is sabotage the talks to get their taxes. This should be a non-starter for Boehner and McConnell. (For Reid as well, since vulnerable Demos in the Senate want no part of more taxes, and Reid's bill was looking out for them.)
Right????
If Obama were not such a doctrinaire leftist, he would say, OK, let's wrap this up, just give me a hike until May or June 2012...and then work like a fiend during the next 9-10 months to make the necessary 4-5 months' worth of cuts in outlays to last through the election. Blame Republicans even. Don't think he will because he knows the public is not with him on the debt hike; he can showcase his efforts in the middle of the campaign (which Republicans can counter with a simple rebuttal about a death-bed conversion, not genuine good-faith fiscal soundness). Saves face and averts market turmoil now.
But Republicans should not make it easy for him and concede the full requested increase in one 'tranche' to get him through his political problem. They will almost certainly have to cave on the BBA and Boehner will have to rely on Demos in the House to pass whatever Frankenstein comes out of this new process...that's enough.
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