Having denounced as “silliness” President Barack Obama’s plan for a budget deal to avoid the “fiscal cliff,” House Speaker John A. Boehner, R-Ohio, has countered with a proposal of his own. It didn’t take long for Obama to shoot it down: “Still out of balance” was his dismissive description in an interview Tuesday with Bloomberg TV. A Republican concession on higher tax rates for the top 2 percent of earners is still the president’s sine qua non for a deal; Republicans “will not agree to” that, Boehner and his fellow House leaders insisted Monday in a letter to Obama.
So we’re headed for $600 billion worth of tax increases and federal spending cuts next month, right? Certainly the political rhetoric is not encouraging. Nor is the substance of Boehner’s counteroffer. On taxes, the speaker promised to raise $800 billion over 10 years — but only by eliminating “special-interest loopholes and deductions,” which he refused to name.
Boehner would cut $600 billion in medical entitlement spending, $300 billion in other entitlements and $300 billion in discretionary outlays — numbers that he suggested are based on ideas raised in congressional testimony a year ago by Erskine Bowles, a former co-chair of the national deficit reduction commission. The reference to Bowles’ recommendation also would imply applying a new inflation adjustment to federal taxes and benefits, yielding $200 billion in savings, and a gradual increase in the Medicare eligibility age. There were few specifics otherwise.
Still, Boehner has publicly put his name on something that can loosely be called a plan. His letter to the president is the first time we know of that he has committed, publicly — as opposed to behind closed doors in last year’s abortive debt-reduction talks — to raising taxes, not just raising revenue through economic growth. This is progress — forced by the GOP’s election defeat in November and the White House’s subsequent pounding on Republicans over their refusal to demand more taxes from upper-income Americans.
Each side has now laid out a maximum position, which hardly guarantees a deal but could be the necessary prelude to finding middle ground. In that respect, it is noteworthy that, for all its insistence on a higher top tax rate, the White House has not insisted that the rate go all the way back from the current 35 percent to its previous level of 39.6 percent.
What’s worrisome, though, is that the two sides are slipping into a kind of tacit agreement to scale back the size of an ultimate debt-reduction package. The president billed his plan as $4.4 trillion worth of debt reduction over 10 years. But $2.4 trillion of that comes from lower interest payments, alleged savings from winding down overseas wars Obama never planned to fight and discretionary cuts that were legislated a year ago. Boehner’s letter similarly identifies only $2.2 trillion of new revenues and cuts.
It will take more than that to dent the debt. A new report from a Bipartisan Policy Center task force headed by former Sen. Pete Domenici, a Republican, and former budget director Alice Rivlin, a Democrat, suggests that it would take $2.8 trillion in fresh cuts and revenue to stabilize the debt at 69 percent of gross domestic product by 2022 — above historical levels but sustainable. It would appear Republicans and Democrats must not only come together, but also raise their sights.
The Washington Post (Dec. 6)
Here are two basic truths about the pathetic Fiscal Cliff stand-off in Congress: A) the US debt crisis can be effectively managed by means of judicious spending cuts and revenue increases and B) putting the country at risk over a man-made crisis is grossly irresponsible. The Cliff crisis is artificial because it is a club carved by Congress to beat all factions into accepting a compromise solution. Furthermore, the Bush-era tax cuts at the center of the debate were to be temporary, as originally claimed by the GOP, which now would have us believe they are carved in granite. Republicans need to accept that they lost the election and move from obstinate to loyal opposition. The difference is in knowing how to compromise.
Nice summary. I want to see some leadership from both the President and Congress. It’s their job..that’s why we pay them fat salaries and benefits. Not just to blow hot air and placate their partisan base.
Yes, but you cannot rely too much on what Republicans say. Just today, Mitch McConnell agreed on one thing (agreed to go along with Boehner,etc.) but later in the day, he reversed and said “no.” Hardly reliable people you could trust.
There is no debt crisis. The debt is a problem to be sure, but the GOP has used the economic slump and resulting debt as a foil to barter the ending Bush tax cuts for huge cuts to social programs. The fact that the President will probably sign on as part of his legacy of Grand Bargaining doesn’t make it sound policy. There are other ways to “fix entitlements” that do not involve the partial dismantling of these programs. “Fixing” Medicare by excluding more elderly from the program is hardly a reasonable solution when the effects of the ACA are only a few years away and are yet to be known. Raising the income cap on SS fixes any funding issues that program may experience in coming decades. Lowering the nearly 8% unemployment rate would do more to fix the debt than cutting services for the poor, old, and sick in the midst of the worst economy since the ’30’s. But the election is over, so we won’t be hearing about the unemployment rate anytime soon. Obama seems destined to govern like a Rockefeller Republican and be labelled a commie for his troubles by the goofballs that now control the GOP.