Many in the mainstream media feigned shock when Speaker of the House John Boehner (R-Ohio) came forward on Wednesday to re-propose the grand bargain with the inclusion of new revenue. Good grief. This was identical to the position that Boehner took in the summer of 2011, which was apparent at the time, and if there was any doubt, Bob Woodward researched the matter thoroughly in his book the “Price of Politics.” New revenue, as we reported here at Right Turn, was also on the table during the supercommittee. So why the shock?
In short, the White House, with the mainstream media attached at the hip, constructed a fantasy: Republicans are opposed to revenue increases. As Woodward reported, Boehner had put $800 million in revenue increases derived from tax reform on the table, which the president appeared to accept. However,once the Gang of Six came out with a higher revenue figure that would have necessitated a tax hike, Obama got cold feet, upped the ante with Boehner and the deal fell apart.
Sen. Pat Toomey (R-Pa.) who was in the thick of the supercommittee fight, commends Boehner for speaking up. Toomey told me Thursday evening, “I think John Boehner is exactly right. He’s reminded everyone we’ve been trying to solve this problem for awhile.” He added, “The president just won an election. He’s the president. At some time he needs to put an idea on the table.”
Why can’t Democrats accept yes (to revenue) for an answer? Remember that they just waged a campaign ginning up their base on socking it to the rich. The president repudiated 1986-style tax reform (lower the rates, broaden the base) when he labeled Mitt Romney a liar for putting out a plan that followed that model. So can they give up the class warfare act now, let go of the notion that they can force Republicans to bend too their will by raising the top marginal rate, as if it were an achievement unto itself? It does seem that way.
In his remarks on Wednesday, Boehner went back to the 1986 tax act, explaining: “There is an alternative to going over the fiscal cliff, in whole or in part. It involves making real changes to the financial structure of entitlement programs, and reforming our tax code to curb special-interest loopholes and deductions. By working together and creating a fairer, simpler, cleaner tax code, we can give our country a stronger, healthier economy. A stronger economy means more revenue, which is what the president seeks. … There’s a model for tax reform that supports economic growth. It happened in 1986, with a Democratic House run by Tip O’Neill, and a Republican president named Ronald Reagan.”
The Democrats now have a choice and the president may be in an entirely different place than his House and Senate allies. He, we are told, wants an historic legacy beyond Obamacare. The rest of the Democrats who will face future elections want a perpetual class warfare. It worked so well in 2012 why not keep it up? Toomey said there is “a lot of logic” to the idea the president might be more reasonable and interested in a deal than the congressional Democrats. But, he added quickly, “I am hopeful and eagerly waiting for some evidence [that Obama wants a deal].”
Now the possibility exists of course that Democrats wouldn’t mind going over the fiscal cliff at all. Heck, they’d get the Draconian defense cuts they pined for. The Bush tax cuts would vanish, and the blame for raising rates on the non-rich could be passed to the Republicans. Well sure, it might send the country into a recession, but Sen. Patty Murray (D-Wash.) has explained that is a small price to pay for getting rid of the tax cuts.
Toomey finds this idea incomprehensible. He argued, “It would be very, very destructive economically. The tax increase alone would drive us into a recession. Hundreds of thousands, maybe millions more people out of work?” He can’t imagine Democrats would actually welcome that.
Toomey thinks the Congress and president can’t wait until the new Congress. “I think we really should get something done in the lame duck.” Otherwise the tax hikes will go into effect with no guarantee they will be undone. Moreover, he stressed, “Sequestration is a threat to national security.” On the sequestration cuts he said, “The magnitude of the spending cuts need to be reconfigured.” It is a “very, very” small percentage of GDP he reminded me, but it nevertheless is important “to demonstrate we are willing to cut.” What sort of cuts could substitute for the sequestration cuts? Toomey alludes to those cuts developed in talks between VP Joe Biden and Republicans in the summer of 2011. “A number of items have been vetted by both sides. We did discuss at great length and have some bipartisan agreement.” He said the exact selection of cuts to be selected from the menu isn’t critical. “I would be very flexible,” he added.
Toomey said, “It would be terrific if we Republicans could agree on a framework. But the president has to lead at some point. Ideally that [proposal] should be public.”
So, the ball really is in the White House’s court. Is Obama serious about using the election results to accomplish something for the country’s fiscal health, or will he be at the mercy of Democrats who see just one more chance to score points and widen the class divide? We’ll soon find out.