When Speaker John Boehner, R-Ohio, began negotiations with President Obama over how to resolve the fiscal cliff, he promised conservatives that he would make a principled stand on tax rates. Last Friday, he surrendered those principles by offering Obama a tax rate hike on incomes over $1 million. That concession, along with other measures capping loopholes and deductions, would raise approximately $1 trillion over ten years. In exchange, Obama has now offered to change how the federal government calculates inflation when determining Social Security benefits. How much would this ‘reform’ cut entitlement spending by? $122 billion. Over ten years. That is about ten days worth of federal government spending. That is the big spending concession Boehner will attempt to sell his Repblican colleagues today.
“The two sides are now dickering over price, not philosophical differences,” The New York Times reports. So much for principle.
Boehner and Obama still have not come to any final deal, but Boehner is scheduled to update House Republicans on the status of negotiations this morning. “There’s unity around the spending side,” newly elected House Republican Conference Chairman Cathy McMorris Rodgers told BuzzFeed. “But the devil’s always in the details.” That is an understatement. And so far it does not look like there are many.
Obama and Boehner are still $200 billion apart on the final size of the tax hike and there is little agreement on how that money will be raised. Boehner wants rates to rise on just those making more than $1 million. Obama wants rates to rise on those making more than $400,000. But neither of those proposals will raise anywhere near the $1 trillion and $1.2 trillion tax hike targets Boehner and Obama have set. The details of those tax hikes won’t come until next year. Same with most of the spending cuts.
According to The New York Times, Obama is willing to cut the before mentioned $122 billion in Social Security spending, plus another $400 billion in unspecified cuts from federal health care programs, plus $200 billion in cuts to other mandatory programs like farm subsidies, plus $100 billion in Defense spending, plus $100 billion from other discretionary spending. That is $930 billion in spending cuts, only $122 billion of which has been specifically identified.
So the only thing Obama and Boehner have really agreed to so far are tax rate hikes for incomes over $1 million in exchange for $122 billion in cuts to Social Security. They are basically trying to punt everything else into next year. The real question is what the default penalties will be if/when Congress fails to agree on details for the unspecified tax hikes and spending cuts.
“Look, we haven’t made the first dollar of promised cuts for the last debt ceiling deal, and now we’re just going to say we pass [on that]? That’s a problem,” Rep. Jim Jordan, R-Ohio, told Politico.
Why would Republicans ever agree to a $1 trillion tax hike that raises rates when they could instead pass a permanent extension of the Bush rates for 98 percent of Americans (which only raises taxes by $824 billion) is a question that Boehner will have to answer today.
From The Washington Examiner
Examiner Editorial: The real cost of Obama’s $1.6 trillion tax hike
Byron York: Anxiety rises as Americans face start of Obamacare
Susan Ferrechio: Scott poised to become first black Republican senator in 34 years
Tim Carney: Bank of America CEO wants slow unwind of Fannie & Freddie
Joel Gehrke: IRS rule threatens to shut down the small businesses that prepare tax returns
Charlie Spiering: Sen. Chuck Schumer compares assault weapons to child pornography
David Freddoso: California, where a cop can make $483,581 in one year
In Other News
The Washington Post, Obama asks Cabinet members for proposals to curb gun violence: President Obama on Monday began the first serious push of his administration to attempt to reduce gun violence, directing Cabinet members to formulate a set of proposals that could include reinstating a ban on assault rifles.
The New York Times, Pro-Gun Democrats Signaling Openness to Limits: Demonstrating rapidly shifting attitudes toward gun control in the aftermath of a massacre in a Connecticut school, many pro-gun Congressional Democrats — including Senator Harry Reid of Nevada, the majority leader and a longstanding gun rights supporter — signaled an openness Monday to new restrictions on guns.
The Wall Street Journal, Struggles Mount for Greeks as Economy Faces Winter: The spread of economic hardship is fraying Greece’s social fabric and straining its political cohesion as the country enters the harshest winter of its three-year-old debt crisis. Even the tightknit Greek family—an institution that has helped the population to absorb a collapse in employment—is under pressure as household incomes dwindle.
Bloomberg News, Schools Safer Than 1990s as Educators Anticipate Killers: In the 2009-2010 year, 17 children ages 5 to 18 died in homicides at school, traveling to or from campuses or at school events, according to the U.S. Education Department. That’s about half the annual figure during much of the 1990s. In a population of more than 50 million students, the school-related death toll has been about 1 percent of all homicides for that age group.
Mark Krikorian on Obama’s ongoing illegal amnesty program.
The Heritage Foundation on the EPA’s costly and unnecessary new air quality standards.
The Weekly Standard‘s Andrew Wilson on why states should say no to the Obamacare Medicaid expansion.
Jamelle Bouie urges liberals to pass gun control since Democrats don’t need rural white guys to win anymore.
Think Progress names Six Extreme Policies That Prove The NRA Is Out Of Step With America.
Talking Points Memo‘s Brian Beutler worries Obama is setting himself up for debt limit trouble two years from now.