We have reached the stage in the “fiscal cliff” negotiations when not much is happening except needling. Republicans are sending around this presidential comment from July 2011: “What we said was, give us $1.2 trillion in additional revenues, which could be accomplished without hiking taxes — tax rates, but could simply be accomplished by eliminating loopholes, eliminating some deductions and engaging in a tax-reform process that could have lowered rates generally while broadening the base.”
Oh well, that was then, this is now. But why exactly the fetish over raising rates if Republicans can do the same by eliminating deductions, credits and loopholes? Why, it’s the politics, of course: the president’s desire to bring home a scalp in the class-warfare battle and, yes, his desire to break the back of Republicans.
Moreover, the president has so far avoided much talk about spending cuts, which never quite make it front and center in the negotiations. That is what is irking House Majority Leader Rep. Eric Cantor (R-Va.):
This is why some Republicans wouldn’t mind going over the fiscal cliff. How else are they going to get the president to cut spending?
But sequestration is among the worst approaches to spending restraint, not only because of the “devastating” cuts to defense. It is simply another kick-the-can moment on entitlements, which the president never has shown seriousness in reforming. Indeed, it appears that House Republicans are very much trying to pivot to the spending side of the equation.
This is for good reason. First, there is a deadlock on taxes and Republicans don’t see an immediate way out. Second, it highlights that, for all the bluster about a “balanced” approach, Obama seems deathly afraid to tackle the biggest drivers of the debt, entitlement spending. (You wonder whether, if Obama got tax-rate hikes, he would still refuse to budge on entitlements.)
That seemed to be the impetus behind the plea from House Chief Deputy Whip Peter Roskam (R-Ill.): “It is foolish to reject President Obama’s own self-described architecture of three dollars in spending cuts for every dollar in new revenue. We’re prepared to work, we call on the White House to do the same.”
Good luck with that. The president took the opportunity in his meeting with a business roundtable group not to suggest an offer was forthcoming but to up the ante, insisting that a permanent shift in authority for hikes in the debt ceiling be handed to the president as part of the deal. He also seemed to catch himself in his own exaggerated rhetoric on the tax front:
In his remarks, Obama also maintained that it’s “not possible” to raise enough revenue for a fiscal-cliff deal by simply eliminating loopholes and deductions in the tax code — which is the plan House Speaker John Boehner offered on Monday.
He immediately amended that remark, saying it was “possible,” but not “practical.”
“The notion that somehow we’re just going to eliminate charitable deductions is just unlikely,” Obama said in his reasoning.
That is just lame. The Simpson-Bowles commission achieved $1.1 trillion in savings and lowered rates. Other plans, including Rep. Paul Ryan’s budgets, have likewise set out a methodology for getting more revenue via tax reform. I would say the president is uninformed, sheltered from reality by his staff, but in fact he knows all this. This was the basis for the deal he made and then walked away from in the summer of 2011.
Well, that leaves us just about nowhere. For now the parties are talking publicly, not to each other. When they do the reverse, there may be hope for a deal.