Negotiations to avert the “fiscal cliff” have not gone well. After meeting with Treasury Secretary Timothy Geithner, House Speaker John Boehner said Geithner offered no “specific” plan for averting the looming end-of-year fiscal crisis, adding: “This is not a game.”
“First, despite the claims that the president supports a balanced approach, Democrats have yet to get serious about real spending cuts,” Boehner said. “And secondly, no substantive progress has been made in the talks between the White House and the House over the last two weeks.”
President Obama directed Geithner and White House Legislative Director Rob Nabors to meet Thursday with Boehner, as well as with Senate Majority Leader Harry Reid, Senate Minority Leader Mitch McConnell and House Minority Leader Nancy Pelosi.
Without action by the Congress and the White House, 2013 will arrive with massive tax increases and spending cuts that will likely push the economy back into recession.
Harry Reid said Democrats are still waiting for a reasonable proposal from Republicans on how to avoid the impending fiscal cliff.
In addition to the tax increases and spending cuts another crisis looms; once again we’re facing reaching the debt ceiling. The White House on Thursday called Boehner’s demand that any increase in debt limit be matched in cuts “irresponsible.”
“Asking that a political price should be paid to ensure Congress does its job… is deeply irresponsible,” White House press secretary Jay Carney told reporters.
Obama’s tax plan returns tax rates for all Americans who earn more than $200,00 individually or $250,000 for a family, to the Clinton-era 39.6 percent.
Carney called the president’s approach “very pragmatic.”
“He believes that it is entirely appropriate, as the American people do, that the wealthiest should be asked to pay a little bit more as we develop a balanced package for long-term deficit reduction.”
“And he believes that the right way to do it, because it is mathematically sound and it is the simplest way, is to extend tax cuts for 98 percent of the American people, but not extend tax cuts for the top 2 percent…and also to write into law some of the other changes that he’s proposed that include caps on deductions of 28 percent and include other loophole closures.”
Obama has chosen the path he used throughout his first term to avoid nearly all negotiations and to delegate discussions with lawmakers to his staff until a deal firm enough to warrant his imperial presence is reached.
The president met with the four leaders of the House and Senate on Nov. 16 and spoke with Boehner and McConnell by phone last week; other than these limited discussions Obama has remained detached.
The White House and Congress must reach a deal before Jan. 1 or kick the can down the road with delaying tactics that have become the hallmark of the Obama Administration. Spending cuts mandated by the failure of the Super Committee will automatically be initiated in lieu of deal to reduce the trillion-dollar annual deficits that have led the national debt to soar to more than $16 trillion.
On the Senate floor Thursday, McConnell said raising tax rates during tough economic times is the “last thing we want to do.”
“We’re not insisting on keeping tax rates where they are to protect some sliver of the electorate,” McConnell told lawmakers. “We’re insisting on keeping tax rates where they are, first and foremost, to protect jobs. And because we don’t think government needs the money.”
“A lot of people around here seem to have forgotten that we’re still in the middle of a jobs crisis. I can tell you a lot of folks are hurting in Kentucky. National unemployment’s still just a hair below 8 percent, and millions of Americans are still looking for work,” he continued. “So if it’s an iron law of economics that you get less of what you tax, why on earth would we want to raise taxes on work?
“Rates matter because they affect behavior. The higher the tax rate, the higher the disincentive to work,” McConnell said.
Current negotiations foretell four more years of gridlock and dissention in Congress, as well as a healthy serving of bitter partisanship. A betting man would place his wager on an agreement to simply delay resolving the problem because “we the people” elect power-hungry politicians that couldn’t spell statesmanship. Our ballots should include the famous Latin phrase “Caveat Emptor:” let the buyer beware.
Will one side cave? It’s possible; but as lame duck sessions generally do they’ll likely simply hand off the ball to the newly elected Congress.
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