Fiscal cliff fiction shouldn’t spook Republicans into abandoning the tax ties that bind
Since the shock of the electoral re-hiring of a failed Democratic Party president and senate majority, we first toyed with maximizing blame avoidance for the inevitable market crisis and double dip recession by simply abstaining from opposing Obama’s agenda. But when the hangover wore off we rejected that option for negotiations, so long as President Barack Obama was required to first put specific proposals for spending cuts in writing.
Of course, Speaker John Boehner couldn’t resist an “open to more revenues” genuflection which only opened the door for Obama’s current tax the rich in the Lame Duck and we’ll talk about spending cuts with a Lamer GOP Duck in 2013.
Considering that what passes for a so-called fiscal cliff of tax hikes and defense cuts are merely an alias for mainstream Democratic Party policies during all of this rooster’s adult life, we think Patrick J. Buchanan has offered the best advice to a Speaker who has already spoken too much:
Tell the president politely that America’s problem is not that we are taxed too little but that we spend too much — and the GOP will not sign on either to tax rate or tax revenue increases. For Republicans believe that would further injure the economy — especially an economy limping along at between 1 and 2 percent growth.
Then Boehner should depart the White House, go back up to the Hill and urge his Republican caucus to do two things.
Pass an extension of the Social Security payroll tax cut and block its automatic rise from 4.2 percent of wages to 6.2 percent. To raise that tax now and scoop off the discretionary income of most of America’s families in this anemic economy makes no sense economically or politically.
The House should then vote to extend the Bush tax cuts for another year, with a pledge to do tax reform — lowering tax rates in return for culling, cutting or capping deductions for the well-to-do in the new year.
Then let Harry Reid work his will. If the Senate votes to let Social Security taxes rise, let Harry and his party explain this to the middle class that gets hammered in January. If the Senate votes to let the Bush tax cuts lapse for those over $200,000, decide in the caucus whether to negotiate — or to go home for Christmas and New Year’s.
As for the automatic sequester that would impose $100 billion in cuts next year, half in defense, do nothing. Let it take effect. The budget has to be cut, and while these cuts are heavy on defense, the depth and mixture can be adjusted in the new year.
If Republicans walk away from tax negotiations with the White House, market investors, anticipating a sharp rise in tax rates on dividends, interest and capital gains next year, will start dumping stocks, bonds and investments to take advantage of the last year of lower taxes.
The market may tank. Let the party of high taxes explain it.
The fiscal cliff nomenclature is merely a device to use to try and blame Republicans for what has been (anemic recovery) and what has been coming, no matter the expiration of certain tax cuts before the New Year, i.e. Double Dip Recession. The GDP has fallen each of the past two years. Under-employment remains at Depression Era levels for the fourth year in a row.
The money that would have come off the sidelines had a tax and energy regulation-averse Romney been elected, isn’t. And sales of new homes are DOWN. That’s right, all the talk of a rebound in the vital-to-recovery housing market, was just talk. Yes, some folks are re-financing their old homes before the ObamaDem trillion-dollar deficits and Bernanke’s QE printing press inevitably knock interest rates up; but re-fi’s do not create jobs or recoveries.
Speaker Boehner and the GOP should not partner with President Obama and the Democrats to chase even more capital away from the United States. Take Pat’s advice and show some moral backbone.
“One man with courage makes a majority.” – Andrew Jackson