The Fiscal Cliff....or is it more like the Fiscal Meh?

I think some of the cuts that would happen in the 'fiscal cliff' would be good things.

And it looks like Obama has learned his lesson from the Health care debate to start from the left and work towards the middle. Instead of starting from the center and ending up on the right where your base doesn't really like it, and the right won't like it anyways.

If Obama was really smart, he would invite Ron Paul over to discuss ways to cut the size and programs in the government, that would put some of the most outspoken people in a difficult dilemma.

 

The first showdown may come by mid-week with Pelosi firing the first shot with a rarely used parliamentary procedure.

Earlier in the year, the Senate passed a bill to extend the Bush tax cuts on all but the top bracket and it has been stalled in a House for five months with the Committee Chair refusing to allow it to come to the floor for a vote.

The discharge petition will force at least one vote. A majority of the House will have to vote to support the discharge petition. Then if the discharge petition succeeds, a majority of the House would have to vote to pass the bill.

I dont think Pelosi and the Democrats will get the necessary votes (20+ Republicans) on the discharge but it will put Republicans on the record. Voting no will be portrayed as voting against middle class tax cuts.

Pelosi warns ‘clock is ticking,’ threatens House vote on tax rates - The Hill's On The Money

 

The Tea Party once again demonstrated earlier tonight an unwillingness to compromise at all to reduce the debt and instead, stabbed Boehner, their party leader, in the back.

The Speaker could not get the necessary 218 votes out of the 241 Republicans for his Plan B that proposed to restore the Clinton era tax rates only on those over $1 million (less than 1/2 of one percent of all taxpayers) as opposes to the Obama plan to restore the earlier tax rates on those over $400k (up from the $250k that he campaigned as another attempt at compromise with the Republicans).

Boehner thought he could one-up Obama and get the Republican House to pass Plan B and tell the American people that they supported extending current rates to 99.6% of all taxpayers and the Democrats were the obstructionists.

Instead, the Tea Party members stuck it to him and made it quite clear tonight that they will not accept any revenue increases...not even the weakest of the three plans that were on the table.



Boehner's in a world of hurt now. He can probably get the needed 30+ Republicans to hold their nose and accept the Obama compromise plan (along with most Democrats).

But is he willing to potentially sacrifice the Speakership to do so? If he makes that move and does what is best for the country rather than his own future, a challenge from the Tea Party (ie Cantor, smirking behind Boehner with his fingerprints all over the knife in Boehner's back) for the top spot is a strong possibility.

High drama on the right over the holidays....to be continued next Wed or Thurs.
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On the spending side, the House Republicans did pass a separate bill that would take defense off the table for any spending cuts, with higher spending cuts on social safety net programs like food stamps, meals on wheels for seniors, unemployment insurance, etc. and allowing earned income tax credits, child tax credits and higher education tax credits to lapse (ie raising taxes on working poor and middle class)...all of which were flatly rejected by the voters last month.

I am convinced the Republicans have lost all sense of political reality and are living in Aceworld.

 

I've been Congress watching for 30 years and I have never seen a Speaker lose control over his/her own caucus to such an extent...to allow 20-25 of the most extreme members hold him hostage with an unwillingness to compromise at all.

Pelosi could craft compromises to placate the blue dog Democrats but these Tea Party guys are evidently not gonna give an inch. They will take public approval of the Republicans in Congress down below 20% and they just dont give a shit.

Its fascinating to watch a party in such turmoil.

 

Boehner can get enough Republicans to vote for the Obama compromise plan if he wants to.

The question remains whether he wants to risk the Speakership.

 

There were rumblings, but no real threat.

Even with 7-8 fewer Tea Party types in the next Congress, he is now much closer to falling off the Speaker cliff.

 

Everyone has a take on the fiscal cliff....even Dr. Ruth:

Members of Congress who can't compromise probably aren't good lovers. Sex requires give and take.

Take that, Tea Party extremists.

 

I dont agree with Krugman.

Obama got more than half of what he wanted in terms of revenue ($650 billion) and locked in the middle class tax rates, extended unemployment insurance, extended other key tax credit programs that benefit the middle class (child tax credits, higher ed tax credits) extended alternative energy R&D tax credits, and a permanant fix to the AMT to the benefit of the middle class. I think he gave up too much on the estate tax and capital gains.

The real test will come with the debt ceiling fight. If he does not get significant additional revenue through tax reform (closing loopholes for top taxpayers and corporations), I would join the infuriated.

 

If only some day Obama could get somewhere above 60% or *gasp* 65% of what he wants. Or maybe he doesn't actually want that shit, and just says he does because that's what the base wants to hear.

I don't think I was the only one who laughed when he said last week that he was going to be unwilling to negotiate on the debt ceiling. It was a big, hearty belly laugh. "Oh my dear Barack, everyone knows you're a horrible fucking negotiator," I said in my best Heston voice to no one in particular while trying to catch my breath.

I would have preferred that we had gone over the cliff. That might have actually resulted in some sort of significant changes in US fiscal policy and also changed the starting line for subsequent negotiations. What we have now is a guarantee for more of this bullshit in a few weeks. The current deal virtually guarantees that cuts in funding won't come from the country's largest entitlement (i.e. the military) and instead will come from programs designed to help people survive in tough times. As someone who makes significantly less per year than $250,000, I would have no problem paying more taxes. We should have let the Bush tax cuts (which are now the Obama tax cuts) expire for everyone and forgotten that they ever happened.

 

The last time a single Republican voted to raise taxes on the wealthy was twenty years ago.

With this vote, nearly all Senate Republicans and 1/3 of the House Republicans voted to raise taxes on the top. Not only the top marginal rate, but on capital gains as well.

I think that was significant, even with today's spin by Grover Norquist and others that the Republicans didnt really vote to raise taxes since the Bush tax cuts official expired the day before.

The debt ceiling will be the real test of Obama's will to negotiate.

He may not achieve the $1.6 trillion revenue goal, but I dont expect him to sign off on a 3:1 spending/revenue ratio either.

The hard issue for Democrats, and for which Obama will get resistance from the left, will be putting entitlement reform on the table. The base wont like it, but it is essential, along with defense, to really tackle the debt.

If Obama can frame that discussion away from Republican goal of privatizing Medicare/Social Security or raising the age of eligibility to indexing benefits and raising contributions (on incomes over $100K), then I would see that as a best case scenario.
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I agree with this perspective:

This was a small step to solving the debt issue, but a bigger step (not a giant leap) in addressing tax fairness.