President Obama and Speaker John Boehner, R-Ohio, met at the White House for 50 minutes last night to discuss ways to avert the fiscal cliff. But all accounts indicate the talks produced nothing. Boehner is now scheduled to spend the weekend at home in Ohio meaning no progress will be made any time soon either.
Earlier in the day Boehner held a press conference at the Capitol where he showcased a chart with the title, “Spending Is The Problem.” “Republicans want to solve this problem by getting the spending line down. The president wants to pretend spending isn’t the problem. That’s why we don’t have an agreement,” Boehner said.
And Boehner is right. Obama’s refusal to consider meaningful structural entitlement reform is the major reason why there will be no ‘grand bargain’ conclusion to the fiscal cliff debate. Obama did once reportedly consider raising the Medicare retirement age as part of a fiscal cliff deal, but that cuts spending by less than $300 billion over ten years. That is not meaningful entitlement reform. There simply are no real entitlement reform ideas out there that Republicans could ask for that Obama would realistically agree to between now and New Year’s.
So what should Republicans ask for? How about tax cuts.
Obama has been making the case for months that taxes should not go up on middle class Americans. He constantly urges Republicans to pass the Senate bill preserving the Bush tax rates on the middle class. But that Senate bill only preserves the Bush rates for one year. Yes, it would avert a $179 billion tax hike for 2013, but then they would be set to expire again in 2014. We’d be right back in the same fiscal cliff boat we are now.
Republicans should go on offense by outbidding Obama on middle class taxes. Obama and Senate Democrats want to extend the Bush rates for one year. Great. The House should pass a bill making them permanent. The Washington Examiner‘s Phil Klein explains why this would be a win for conservatives:
It’s important to remember that in terms of dollar value, a permanent extension of most rates is worth more to taxpayers over time than a temporary extension of all of them. Also, permanency for most tax brackets would mean that the Congressional Budget Office’s revenue baseline, against which all tax policy is measured, would no longer be based on the unrealistic assumption that all Bush tax cuts are going to expire in the near future and bring in a flood of revenue. We’d finally have a real-world demonstration that getting rid of the Bush rates on higher incomes isn’t going to change the nation’s long-term debt picture.
No, making the Bush tax rates on the middle class will not solve our fiscal problems. As Boehner said, we have a spending, not a revenue problem. But the spending problem can not be solved now. So Republicans should minimize Obama’s tax hike damage now, bring some certainty to 98 percent of Americans by making their existing tax rates permanent, and address the spending problem later.
From The Washington Examiner
Examiner Editorial: California’s anarcho-liberal dystopia
Byron York: Get ready for the costs and chaos of Obamacare
Charlie Spiering: Bobby Jindal calls for an end to ‘birth control politics’
Tim Carney: The persistent myth that the Supreme Court decided the 2000 election
Veronique de Rugy: Let’s return to Clinton spending levels, too
In Other News
The New York Times, Rice Ends Bid for Secretary of State, and Fight With G.O.P.: President Obama knew before he picked up the phone on Thursday afternoon what Susan E. Rice, his ambassador to the United Nations, was calling about: she wanted to take herself out of the running for secretary of state and spare him a fight.
The Los Angeles Times, Blue Shield of California seeks rate hikes up to 20 percent: Health insurer Blue Shield of California wants to raise rates as much as 20% for some individual policyholders, prompting calls for the nonprofit to use some of its record-high reserve of $3.9 billion to hold down premiums.
Bloomberg News, Aetna CEO Sees Obama Health Law Doubling Some Premiums: Health insurance premiums may as much as double for some small businesses and individual buyers in the U.S. when the Affordable Care Act’s major provisions start in 2014, Aetna’s chief executive officer said.
CNBC, Only 15 States Opt to Run Obamacare Exchanges: Only 15 states have told the federal government they plan to operate health insurance exchanges under President Barack Obama’s reform law, leaving Washington with the daunting task of creating online marketplaces for two-thirds of the country.
The Wall Street Journal, Cliff Fight Is Likely to Take a Toll on Growth: Economists now expect whatever deal that comes out of the fiscal cliff talks to cause middling growth next year as business and consumer confidence suffers from another drawn-out spectacle.
The Washington Post, U.S. troops will man Patriot batteries along Turkey’s border with Syria: The United States authorized on Friday the deployment of 400 troops to man two Patriot missile-defense batteries along Turkey’s border with Syria, a move that could put American troops near the front lines of the Arab country’s escalating civil war.
National Review‘s Katrina Trinko notes that some spending in sandy ‘emergency’ bill doesn’t start until 2018.
The Heritage Foundation‘s J.D. Foster explains why the Federal Reserve’s QE4 is “another big step down a dangerous road.”
The American Enterprise Institute‘s Edward Pinto highlights a new study showing devastating foreclosures on the rise.
Susan Rice explains why she withdrew from consideration for Secretary of State.
The Washington Post editorial board says Democrats are “losing their balance” in fiscal talks by not embracing entitlement reform.
Ezra Klein argues that Obama’s $1.6 trillion tax hike is actually pretty small.