It appears that Republicans and Democrats, under the auspices of Sen. Mitch McConnell (R-Ky.) and Vice President Biden, have reached a deal on the tax aspects of the “fiscal cliff” centered on tax rates rising for individuals making $400,000 and couples making $450,000. We now know these two are the only capable deal-makers in Washington. Time can be saved and much annoyance avoided in the future by bypassing the White House altogether.
Without action by the Senate, the House vote will likely come tomorrow at the earliest. The Senate, after years of budget avoidance, could not manage to meet a deadline of Dec. 31, despite McConnell’s best efforts.
The deal would presumably put off the sequester issue, which the president highlighted in his unseemly spike-the-ball press conference this afternoon by threatening to replace the $1.2 trillion in cuts with, you guessed it, some more tax hikes. (The sequestration idea came from the White House and was intended as a spending-reduction measure, making President Obama’s suggestion the ultimate bait-and-switch.) McConnell has zero incentive to move forward on that score, and he can claim that he saved a number of taxpayers (including small businesses) earning between $250,000 and $400,000 from tax hikes. He and the rest of the GOP live to fight another day on spending in the context of the debt-ceiling fight.
There were many mistakes along the way by Republicans, most especially the failure to pass House Speaker John Boehner’s Plan B. Rather than negotiating down from $1 million, McConnell had to negotiate up from $250,000. Every blogger, action group and hardline conservative who opposed Plan B contributed to a worse deal than would in all likelihood had been obtainable had the House set up the $ 1 million threshold. At some point, these people need to stop paying checkers and learn some chess.
It was also an error to assume that the president was ever interested in real spending restraint. The only way to achieve fiscal sobriety is to jam him and, yes, hold the country hostage, in the debt-ceiling fight. He behaved precisely as he did in 2011, refusing to accept that a grand bargain must include real entitlement reform and not merely a class-warfare display of soaking the rich. To all the Democrats and media pundits who will surely claim foul, we should ask how else will we ever achieve fiscal restraint? The president is plainly bent on embarrassing his opponents (see today’s news conference) and hiking taxes to the exclusion of all else. Republicans freed from the charge that they are protecting the super rich should unite on a serious entitlement reform plan and hold firm.
As for the sequester, it may be that this is reversed or delayed, but at this point I would share the view of many (e.g., the Wall Street Journal editorial board) who suggest it is preferable to take these cuts (defense spending included) than to let them go by the wayside. Under Obama, the military isn’t likely to be used much anyway, so a true modernization will have to await the next president. The president suggested the devastating cuts as part of the debt-ceiling deal of 2011, did nothing to prevent them and should be held accountable for savaging national security. Maybe his nominee for defense secretary can explain why and how that comports with his constitutional obligations as commander in chief.
Finally kudos to President George W. Bush whose tax cuts from 2001 and 2003 survive, almost entirely intact for now, making the Republican mantra of low taxes a bipartisan affair to the chagrin of the left.