Saturday, July 09, 2011

It Would Seem That the Teary-Eyed John Boehner Came Perilously Close to Wimping Out Again With Major Tax Increases in Debt Ceiling 'Deal'

Headline updated based on suggestions from commenters

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... 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.

Sign the Cut, Cap, Balance Pledge

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Zilla said...

Sonofabitch! WTF is wrong with those gutless sycophant RINO jackasses? Did they forget who won the 2012 elections? Did they forget who voted in the 2010 elections? Do they think we won't find people to primary the bastards out? Like you said in a previous post, Doug, there is going to be hell to pay.




Mmatters said...

Doug, I don't know how you can miss what the Speaker's statement says, in full:

"Despite good-faith efforts to find common ground, the White House will not pursue a bigger debt reduction agreement without tax hikes. 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."

What about "without tax hikes" is ambigous?

If I'm wrong, fine, but I don't see how.

Tom Blumer

Whitehall said...

Settle down guys.

This is not the big decisive battle, the elections in 2012 are!

Our system of governance is designed to be slow to react and change. We certainly won in a solid expression of decision from the voters in 2010 but that's not enough.

Better to have NO deal than tax increases though.

Doom said...

I do declare, someone is trying to ignite a real serious rebuke of politicians. If they fear being frozen out of the insider trading, wait till they find out what tar and feathers are about. It's coming down to that.

directorblue said...

@Tom -

I've updated the headline accordingly. The Pethokoukis section of the post describes how close Boehner appears to have been to agreeing to $1 trillion in revenue increases.


Mt Top Patriot said...

That cesspool on the Potomac, the entire system of government and people who work there is polluted with the most vile mental disorder known to the human species.

These bums have sold us out again.
They have pushed us into a corner.
Stolen everything we have, our dignity, our prosperity, our ways of life, our speech, our security, our children's future, our principles, our jobs, our resources, our farms. They have intruded into our most private places, our faith, our homes, our parenting, our marriages, our health, even when and how we go to the bathroom. Nothing in our lives is sacred to the intrusion of these vile tyrants. Because that is what each and every one of them are.
And now, given the golden opportunity of 230 + years of Republican form of governance, after a unquestionable call out by we the people in 2010 that it has to stop, with an unquestionably illegal undocumented die hard communist president running amok doing everything within and without his power to destroy the core rule of law and principles of Liberty that are everything to what America and its people is, the only people that could really honestly stop this madness have acquiesced, essentially choked, they have squandered a chance of a lifetime.
You Traitors! You ain't Americans, your treasonous pieces of excrement.

Never again.
One way or another never again.

Mt Top Patriot said...

This whole debt negotiation circus has nothing to do with negotiating in good faith, or not, a way to resolve and climb out of the political and economic hole we are in. It has nothing to do with principles of Constitutional Government. Nothing to do with rediscovering and finding common sense means to operate a government that lives within its means.
It is plain and simple another shell game, foisted on us by the greatest collection of con artists and tyrants ever collected in one spot, under the guise of "negotiations", a Ponzi scheme by various factions of the hierarchy of the ruling elite about how they can steal, squeeze and con the last few bucks we as Americans still have.
It is simple, you either cut the debt and spending, or you don't.
If you don't, well call it anything you want, because it is still theft and destruction to benefit the chosen few and screw everyone else.

Bones said...

Mt Top Patriot. Excellent rant!
I can't help but wonder how much worse things would be if Dems
were still in charge of the house.

Mmatters said...

Doug, James P's write-up preceded Boehner's statement last night.

James P's latest is "Like Reagan at Reykjavik, Boehner passes on a bad deal," and it's here.

From James P's latest it does seem bad that Boehner might have been willing to give in on tax increases at some point. But the bottom line is that he hasn't -- but I would also agree that we have to add the word "yet."

I'm a little bit tired of our side beating up on the guy for caving when it's clear that he hasn't (again, "yet").

Nothing wrong with letting him know that he damn well better not go wobbly.