One week after President Obama was reelected, Congress returns to work today and the number one item on their agenda is the resolution of the “fiscal cliff,” a mix of almost $600 billion in tax hikes and spending cuts that the Congressional Budget Office says would send the economy into recession if it is not prevented.
Many in Washington, and many more on Wall Street, are pushing Republicans to accept the Grand Bargain that Obama offered in July of 2011. But a new document obtained by Bob Woodward shows that such a deal would be a disaster for conservative movement and the country.
The papers published Sunday by NBC News consist of a three-page fax sent by White House Director of Legislative Affairs Rob Nabors to Speaker John Boehner’s, R-Ohio, office on July 19th, 2011. They outline the last offer Obama personally approved before debt deal talks collapsed in the summer of 2011. It includes some minor Medicare reforms including changes to “payments for hospitals, post-acute care, and prescription drugs” as well as “limitations to certain types of supplemental coverage.”
In exchange for these tinkerings with Medicare price controls, Obama expected Republicans to vote for a $1.2 trillion tax hike. No wonder the negotiations blew up.
According to the CBO, the tax hike that Obama actually campaigned on, returning the the top two income brackets to the Clinton era tax rates, would only raise about $800 billion over ten years. In other words, Obama’s last Grand Bargain offer included $400 billion more in tax hikes than he is set to get if Republicans let the top two rates expire at the end of this year.
Conservatives should not support any Grand Bargain with Obama. There is simply no way he will ever agree to any meaningful reform of the real drivers of our national debt: Social Security, Medicare, Medicaid, and Obamacare.
Instead, conservatives should try to minimize the damage of Obama’s second term. They should let the top two rates go up, but keep the rest of the Bush tax rates which, along with a fix to the Alternative Minimum Tax, cut taxes on the middle class by $3.7 trillion. They can then use the revenue from the Obama tax hike to stop both the defense sequester ($492 billion) and the scheduled 27 percent cut in Medicare reimbursement rates ($245 billion) from going into effect. Democrats can then fight over how to use the remaining $87 billion to stop the scheduled $492 billion domestic spending sequester.
It’s not a great deal, but its a lot better than any other”bargain” Republicans will get from this White House.
From The Washington Examiner
Examiner Editorial: Exit polls skip Texas, missing key demographic data
Byron York: In Ohio, the GOP puzzles over missing white voters
Sean Higgins: DCCC outraised NRCC in 2012, couldn’t re-take House
In Other News
The New York Times, Top U.S. Commander in Afghanistan Is Linked to Petraeus Scandal: “Gen. John Allen, the top American and NATO commander in Afghanistan, is under investigation for what a senior defense official said early Tuesday was “inappropriate communication” with Jill Kelley, the woman in Tampa, Florida who was seen as a rival for David Petraeus’s attentions by Paula Broadwell, who had an extramarital affair with Mr. Petraeus.”
The Washington Post, Obama considering John Kerry for job of defense secretary: “President Obama is considering asking Sen. John F. Kerry (D-Mass.) to serve as his next defense secretary. … Although Kerry is thought to covet the job of secretary of state, senior administration officials familiar with the transition planning said that nomination will almost certainly go to Susan E. Rice, the U.S. ambassador to the United Nations.”
The Wall Street Journal, U.S. Redraws World Oil Map: “A shale-oil boom will help the U.S. overtake Saudi Arabia as the world’s largest oil producer by 2020, according to the International Energy Agency, a shift that could transform not just energy supplies but also U.S. politics and diplomacy.”
At National Review, Michael Cannon explains why Obamacare is still vulnerable.
Neil Stevens notes an interview where Tom Jensen admits that PPP’s polls were rigged all along.
Bethany Mandel on Romney’s GOTV ORCA disaster.
The Washington Post asks, “Is Obamacare too much work for the Obama administration?”
Think Progress notes that nearly 400,000 people have called on Macy’s to dump Donald Trump
Talking Points Memo names Sens. Susan Collins, Maine, Lisa Murkowski, Alaska, Dean Heller, Nev., Mark Kirk, Ill., and Lindsey Graham, S.C., as the Republican senators most likely to cave for Obama.