It's the last straw. I'm guessing this Wall Street Journal report is accurate; and, if so, the American people and the pathetic John Boehner should begin weeping.
House Speaker John Boehner (R., Ohio) said the White House and congressional leaders have stopped pursuing the major deficit-reduction deal tackling entitlement programs and an overhaul of the tax code that he and President Barack Obama had been seeking.
A statement from Mr. Boehner issued late Saturday, after a conversation with Mr. Obama, said efforts by both parties to reach a deal to reduce the federal deficit by $4 trillion over the next decade reached an impasse this weekend over the issue of taxes. Mr. Boehner said negotiators will instead work toward an agreement closer to $2 trillion.
"Despite good-faith efforts to find common ground, the White House will not pursue a bigger debt reduction agreement without tax hikes," Mr. Boehner said. "I believe the best approach may be to focus on producing a smaller measure, based on the cuts identified in the Biden-led negotiations, that still meets our call for spending reforms and cuts greater than the amount of any debt limit increase."
...Messrs. Obama and Boehner had agreed to shoot for a $4 trillion deal that would include up to $1 trillion in tax increases, which Republicans have resisted, and significant savings in Medicare, Medicaid and Social Security, which drew criticism from Democrats. Their hope was to go beyond the minimum deal necessary to win votes in Congress necessary to raise the federal debt ceiling and to make a landmark strike at deficit spending.
..."The White House would not agree with the core elements of tax reform proposed by the speaker," the Republican familiar with the discussions said. "A gulf also remains between the Speaker and the White House on the issue of medium and long-term structural reforms."
Hey, schmuck: you don't need to do anything. The government isn't going to default; it isn't going to renege on Social Security; and it could run for a year on current revenues.
James Pethokoukis called it earlier tonight: Obama is "snookering Boehner on taxes".
The media accounts of the tax reform deal being cooked up by President Obama and House Speaker Boehner aren’t all that clear. But it is looking like a big tax increase:
– The White House is insisting that as part of any deal the current tax rates on the middle class—the child tax credit, etc.—would be made permanent, while the lower rates on capital gains, dividends and the higher income brackets would expire after 2012. Taken by itself this would be a tax increase pure and simple and violate the GOP’s campaign pledge.
...More troubling than these details is the staggered timing. Republicans would be putting their fingerprints on a tax increase in return for spending cuts as a first order of business, which would raise the dividend and top income tax rates to 39.6% (from 35%), or 41% if you include the phase-out of deductions. (Plus the 3.8% payroll tax hike baked into ObamaCare.) Only then would Mr. Obama and the Democrats negotiate the details of tax reform and lower overall rates...
...as much as $1 trillion would be in revenues: $700 billion from letting the Bush tax cuts for the highest income brackets expire and another $300 billion from increased revenues, from auctioning off frequencies, increased payments to federal pension plans and ending agriculture subsidies in addition to ending tax breaks such as deductions for corporate jets, yachts and race horses...
All very confusing, but the best I can make of it is this: higher taxes now in exchange for a promise of tax cuts later to be “paid for” by reducing tax breaks/deductions/loopholes with perhaps some of that money going toward deficit reduction.
I can tell you this: Democrats need a lot more tax revenue to make their long-term budget plans works. This is why Obama has not offered a long-term budget plan. The need for massive tax increases would then be clear to all. In private, liberal economists all talk about a need for a value-added tax to raise the additional revenue.
But a liberal think with close ties to the White House, the Center for American Progress, recently released a budget plan that goes out to 2035. It shows taxes as a share of the economy rising dramatically to nearly 24% of GDP vs. around 18-19 percent historically. And I am guessing they would go even higher if the table went beyond 2035. If Boehner and the Republicans don’t hold the line now on taxes, this is the American future...
Let me repeat this simple message to Speaker Boehner and Leader McConnell: if you cave on this ridiculous plan, prepare to be removed from your lofty positions on the Beltway cocktail and talk show circuits.
Your timidity is helping to destroy the American economy. Say hello to Speaker West and Leader Rubio.
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