Here’s the GOP’s predicament right now: Conservatives won’t tolerate any action that extends just the middle class tax cuts without also extending the tax cuts for the rich. That’s because it would mean a tax hike on the top two percent, which is so intolerable that it must be opposed even if it means denying a tax cut to the other 98 percent. But Dems won’t allow Republicans to do anything other than extend just the middle class tax cuts, and will let all the tax cuts expire if necessary.
That leaves Republicans with a difficult choice. Either they agree to continue just the middle class tax cuts (a nonstarter for conservatives) or the middle class tax cuts lapse (a nonstarter for the American public for which they will be blamed).
Today, however, it looks as if top GOP aides have hit on a possible way out — a way Republicans can allow an extension of the middle class tax cuts while simultaneously opposing it. They tell the Post’s Lori Montgomery:
The Republican-controlled House could adopt two competing bills. One, supported primarily by Republicans, would extend the expiring low tax rates for all households, including the rich. The second, supported primarily by Democrats, would extend the current low rates only on income less than $250,000 a year, allowing rates for the wealthy to increase. Both measures would go to the Democratic-controlled Senate, which would then pass only the Democratic bill.
So Republicans get to go on record supporting tax cuts for the rich — sorry, tax cuts for everyone. Then they get to vote against extending just the middle class tax cuts, but that passes anyway, thanks to House Dems. The second measure passes the Senate. The middle class keeps its taxes low; the taxes on the rich expire with Republicans on record against it; the GOP regroups to fight again next year. Problem solved, right?
Here’s where it gets complicated, however — and potentially very revealing about the true nature of GOP priorities. It will be very interesting indeed to see if conservatives and Republicans are willing to support this scenario. After all, simply by holding these two votes, Republicans would be willingly adopting a procedure that allows taxes to go up on the rich but not on everyone else (even as they vote against this outcome). Since this is supposed to be resisted at all costs, you may see a situation where even this two-vote solution is deemed unacceptable to conservatives. Indeed, it wouldn’t be surprising if this solution is labeled a “tax hike”! If so, it will reveal yet again how high a priority keeping taxes low on the wealthy remains for them.
That said, Republicans badly need a way out of the box they’re in, and this one seems as good as anything else. Since the most important thing here is preventing taxes from going up on 98 percent of taxpayers, let’s hope conservatives will let them take it.
UPDATE: It’s worth adding that in the above scenario you’d need some House Republicans to vote for the second bill extending just the middle class tax cuts, though perhaps not too many, since virtually all Dems would back it. Passage would not be assured, but it certainly seems possible.
* Public opinion gives Dems all the leverage: Here’s another reason Republicans may have to accept the above way out: A new Quinnipiac poll finds that Americans are solidly on the side of Obama and Democrats in this battle. Voters say by 53-36 they trust Obama and Dems more than Republicans on the fiscal cliff mess. And by 51-43, voters say Republicans won’t make a “good faith effort” to cooperate with Obama on issues important to them.
Also: 65 percent of voters, and 66 percent of independents, support raising taxes on income over $250,000. And solid majorities support a mix of tax hikes and spending cuts — again confirming that Dems are the ones who effectively have captured the middle ground.
* Obama having success wooing business leaders? A key nugget in Peter Baker’s story on Obama’s efforts to persuade the business community to agree to a compromise on the fiscal cliff:
Many chief executives who met with Mr. Obama privately at the White House last week told him they would go along with his proposal to raise taxes on the wealthy.
Contingent on Obama pursuing real entitlement reform, of course. The key question remains whether business leaders will seriously press Republicans to accept the inevitable on tax rates for the rich — and demand that they refrain from another debt ceiling showdown, which corporate leaders certainly don’t want.
* Business leaders ready to support debt limit fix? A fascinating bit of reporting from Politico’s Ben White, suggesting business executives want a permanent end to debt limit brinksmanship:
Per a plugged-in exec: “Have been picking up a lot of support amongst business execs for the idea of extending last year’s McConnell patch on debt limit. It gives members of Congress an opportunity to vote against debt limit increases without harming full faith and credit of the U.S. After last summer’s debacle around debt limit debate and subsequent downgrade, a lot of CEOs would prefer a symbolic vote to the brinksmanship that both parties have played with debt limit votes.”
As I reported here yesterday, Obama very well may refuse to negotiate with Republicans this time around if they try to revive their 2011 debt limit play, and one key reason for this is that he may be able to enlist business executives in the push for an end to this madness.
* Boehner continues groping for a way out: A nice piece by Dana Milbank explaining Boehner’s predicament, including this apt formulation: What’s really happening right now is Boehner is looking for “an orderly surrender.” The two-vote solution outlined above just might accomplish that.
* Why won’t Obama give Republicans what they want? Also note this remarkable quote in Milbank’s piece from one of Boehner’s deputies, Rep. Pete Roskam:
“President Obama has an unbelievable opportunity to be a transformational president — that is, to bring the country together,” he said. “Or he can devolve into zero-sum-game politics, where he wins and other people lose.”
After a four-year scorched earth campaign to render Obama a one-term president explicitly through denying him compromise, Republicans want him to bring the two parties together by agreeing (in exchange for unspecified loophole closings) to give them both the entitlement cuts they want and the tax rates they want.
* Labor organizes around fiscal cliff: The AFL-CIO is holding a series of grassroots events around the country to mobilize public opinion against the possibility of cuts to entitlements benefits “under the guise of a manufactured fiscal crisis.” The events underscore the fear on the left that any final deal will inevitably go beyond sensible entitlement reform, which would focus on the provider side, and include real cuts to the safety net, under the guise of deficit hawkery, all to get conservatives to accept tax hikes.
* Democrats should pursue voting reform: Senator Barbara Boxer is introducing a bill that would provide for the federal government to set standards for the number of voting machines and other voting resources based on population. Some other ways to reform voting are right here.
Remember, Obama said during his victory speech — almost as an aside — that we have to “fix” our voting problems. I really hope Democrats stay on top of this.
* And are conservatives really re-evaluating? Good stuff from E.J. Dionne comparing today’s GOP predicament with the struggle among Republicans to come to terms with the New Deal in the 1930s and 1940s — and outlining why we should be skeptical that Republicans are currently reevaluating anything other than how to package the same old ideas.