‘Fiscal cliff’: Exchanging tax hikes for entitlement cuts; higher tax rates and revenue

December 6, 2012

Some in GOP urge lawmakers to back tax hikes for changes in safety-net programs: “A growing chorus of Republicans is urging House leaders to abandon their staunch opposition to higher tax rates for the wealthy with the aim of clearing the way for a broad deal that would also rein in the cost of federal health and retirement programs. With less than a month before the “fiscal cliff” deadline, President Obama remains adamant about allowing tax rates to rise for the wealthiest 2 percent of taxpayers. Without such a deal, he is “absolutely” ready to go over the cliff, Treasury Secretary Timothy F. Geithner said Wednesday on CNBC.” (Washington Post)


Higher taxes don’t equal higher revenues: “The fiscal-cliff negotiations seem to be foundering on Barack Obama’s insistence on higher tax rates on high earners and House Republican leaders’ insistence on opposing them. The president believes he has a mandate from voters for his position, and House Republicans believe they have a mandate from voters for theirs. The real argument here is over the size and scope of government. Under Barack Obama, federal outlays — the technical term for federal spending — have increased to over 24 percent of gross domestic product,” writes AEI’s Michael Barone. (National Review)

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Obama’s claim of the ‘largest’ discretionary cuts ‘in history.’ (Washington Post)

Raise the economy’s speed limit: “With the budget-and-tax showdown dominating headlines, most Americans probably missed an even more ominous story: according to a report by the Congressional Budget Office, America’s underlying growth rate — that is, the best the economy could do, under optimal conditions, without driving up inflation — has slowed from just under 4 percent a year in 2000 to just under 2 percent today,” writes Jared Bernstein of the Center on Budget and Policy Priorities. (New York Times)

Room for Debate asks: Last month major opposition groups joined to form the National Coalition of Syrian Revolutionary and Opposition Forces, giving it some diplomatic credibility. Although the United States has been slow in officially recognizing the coalition, it is considering labeling another group,the Nusra Front, a terrorist organization, which would show solidarity. Should the U.S. officially recognize the new Syrian coalition? (New York Times)

Politico’s Arena asks: Fox News has moved to sideline Republican pundit Karl Rove after Rove predicted a major victory for Mitt Romney and disputed Fox’s decision to call the state of Ohio for President Obama.  The move is part of an effort by Fox head Roger Ailes to shake up the network’s cast of talking heads. Is Fox News moving in the right direction by benching Rove?  Is this a sign that the network could appeal to a broader audience in the future?

The conservative learning curve: “Over the long run, the most important impact of an election is not on the winning party but on the loser. Winners feel confirmed in staying the course they’re on. Losing parties — or, at least, the ones intent on winning again someday — are moved to figure out what they did wrong and how they must change,” writes Brookings. E.J. Dionne. (Washington Post)

A drone strike on democracy: “In reality, though, the U.S. uses drones differently than it uses traditional weapons. Because they’re small and cheap, they’re in constant operation in parts of Pakistan, Yemen and Somalia — and thus much more likely to be used to deliver lethal strikes. We’ve gone from a policy of firing only on high-value targets, such as senior terrorist leaders, to one of engaging groups of young men who present the mere “signature” of militant groups,” writes Atlantic Council’s James Joyner. (New York Daily News)

AEI’s Mark Perry: According to government forecast, abundant and reliable fossil fuels will supply 80% of U.S. energy demand in 2040. (AEI)

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Allen McDuffee · December 6, 2012