Republicans finally may be confronting reality.
The Washington Post reports “a growing chorus of Republicans is urging House leaders to abandon their staunch opposition to higher tax rates for the wealthy,” while The New York Times says Speaker John Boehner now has “the broadest support of his tumultuous two-year speakership” as he bargains with the White House to avoid the looming fiscal cliff.
No doubt the crushing electoral defeat last month and recent polls showing a majority of Americans would blame congressional Republicans if an agreement is not reached have injected a measure of sanity into GOP ranks.
Republicans recently have not been prone to an appeal to reason, and there’s no guarantee that an agreement will be reached. Already conservative blogger Erick Erickson is accusing the Republican leadership of “selling out.” Fear of primary challenges from the right in 2014 may prevent many Republicans in Congress from signing on to tax increases, which would torpedo any deal the leadership can reach with the president.
The GOP finds itself in a curious place, a victim of its own anti-tax rhetoric of the last thirty years. If the party had not been so ideologically strident on taxes, it would not be now at the mercy of President Obama, who has the upper hand in budget talks because of his reelection and because he has the backing of the public on increasing tax rates on the wealthy.
A less rigid position would have allowed Republicans to declare victory on taxes. Everyone agrees that the Bush-era tax rates should remain for Americans earning less than $250,000. The Republican position on taxes remaining at historically low levels has been accepted by both parties for 98 percent of all taxpayers. In politics, as in most endeavors, getting 98 percent of what you seek is a very good day’s work.
Yet instead of saying “we won,” Republicans have put themselves in the unpopular and uncomfortable position of defending tax cuts for millionaires. It’s odd, because the defense of the temporary Bush-era tax cuts offered by Republicans in 2012 does not match the rationale President Bush offered in 2001.
As columnist Ruth Marcus notes, “memories are short, which is lucky for politicians,” but the reason Bush cut taxes “wasn’t because rates were too high. It was because the surplus was too big. Yes, too big.”
It’s hard to recall in this era of trillion dollar deficits, but in 2000, at the end of the Clinton presidency, the United States ran a $230 billion surplus. Bush used the surplus to defend his tax cuts. “We recognize, loud and clear, the surplus is not the government’s money,” the new president said. “The surplus is the people’s money. And we ought to trust them with their own money.”
Bush argued that government revenues were sufficient to begin paying down the national debt, create a “contingency fund” for emergencies, increase the budget four percent annually, and “still have money left over” for a tax cut.
Well, we know how that turned out. The unfunded tax cuts, coupled with two wars paid for on a credit card and an unpaid for prescription drug program for seniors, left the government deeply in hock by the end of Bush’s two terms in office. Instead of paying down the national debt by a promised two trillion dollars, the total America owes nearly doubled under Bush.
Accepting the President’s position on rates for the top two percent of taxpayers ought to be easy for Republicans since high rates were not the reason for the tax cuts originally and since the Republican position on rates will prevail for the remaining 98 percent. Moreover, Congress always intended the tax cuts to be temporary, so Republicans can legitimately claim they are not voting for a tax hike, only for a restoration of the top rates.
Logic says it ought to be easy; unfortunately, we are talking about Republicans.
Posted December 7, 2012