House Republican leaders planning to offer increased revenues through closing loopholes in fiscal cliff negotiations with President Obama need to check in with their base. Conservatives are not only not buying the distinction between raising revenue though rate hikes and limiting deductions, they are also arguing that closing loopholes would be worse.
“I am absolutely in favor of simplifying the tax code. I am absolutely in favor of getting rid of loopholes. But I am absolutely opposed to engaging in machinations of the tax code designed to increase spending through closed loopholes and the like,” RedState‘s Erick Erickson writes. “[GOP] plans are designed around tactics, not strategy, and tactics designed to avoid as much blame as possible for a mess they were complicit in creating.”
American Enterprise Institute fellow Marc Thiessen details why closing loopholes would be a strategic error: “Every dollar from limiting deductions that is used for a down payment today is a dollar that cannot be used tomorrow to buy down lower tax rates. … if Republican leaders use those revenues as part of a down payment, then the GOP have to find some other way to pay for lower rates on high earners. And the only source of revenue left would be tax increases on lower- and middle-income taxpayers. This means that real tax reform will never happen — because the GOP will never lower tax rates on top earners and pay for it with higher taxes on the poor and the middle class. That would be political suicide.”
House Republicans are in a tough spot. Taxes are set to automatically go up and there is nothing they can do to stop it. Given those facts, Republican leadership ought to start thinking about how to best set up long-term policy and political victories, and stop worrying about short-term inevitable defeats.
From The Washington Examiner
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Brian Hughes: Republicans strike first on immigration reform
In Other News
Gallup, Majority Now Against Gov’t Healthcare Guarantee: For the first time in Gallup trends since 2000, a majority of Americans say it is not the federal government’s responsibility to make sure all Americans have healthcare coverage.
The Wall Street Journal, Federal Student Lending Swells: The federal lending program designed to make college education available to everyone is creating a pile of debt so large it is fanning worries that it has become too easy to borrow too much.
The New York Times, California Finds Economic Gloom Starting to Lift: After nearly five years of brutal economic decline, government retrenchment and a widespread loss of confidence in its future, California is showing the first signs of a rebound. There is evidence of job growth, economic stability, a resurgent housing market and rising spirits in a state that was among the worst hit by the recession.
The Washington Post, Obama launches PR effort on fiscal cliff: The White House signaled Tuesday that it will try to marshal the momentum from President Obama’s reelection triumph into another victory at the negotiating table, launching a full-fledged public relations effort to avoid a “fiscal cliff” that could jolt the nation back toward recession.
Bloomberg, Geithner Keeps Withholding Freeze as Weapon to Curb Cliff: The Obama administration has a way to blunt about half of the fiscal cliff’s economic fallout for 2013, even if Congress stays deadlocked: Freeze paycheck withholding levels.
The Los Angeles Times, Competing immigration reform efforts begin: Even as Republicans in the House and Senate begin efforts to pass narrow immigration bills in the lame-duck session, closed-door negotiations have begun over how to accomplish a much broader package of immigration reforms next year.
CNN, Bolling to drop bid for Virginia governorship: Virginia Lt. Gov. Bill Bolling will drop his bid for the Virginia governorship, CNN has confirmed, a move that clears a path to the Republican nomination for his primary opponent Ken Cuccinelli.
The Weekly Standard‘s Michael Warren on Why Romney Lost the Asian Vote.
Tyler Durden on The Tragedy Of America’s Welfare State.
RedState‘s Erick Erickson says, “Saxby Chambliss has been part of the problem and remains part of the problem.”
Marc Ambinder explains why a Hillary Clinton 2016 run is not inevitable.
Greg Sargent explains why liberals should be encouraged by how the fiscal cliff negotiations are proceeding.
Firedoglake‘s David Dayen approves of Sen. Dick Durbin’s, D-Ill., call to add infrastructure spending to the fiscal cliff negotiations.