The ground is shaking and the rumblings are getting louder as top congressional Republicans are signaling that they are about to give President Obama what he wants and cave on tax cuts for the rich.
The first sign came last Sunday when Bill Kristol said on Fox News Sunday that raising taxes on millionaires wouldn’t hurt the country. Then came the Wall Street Journal’s write up of the meeting between Obama and congressional leaders yesterday that included this telling description, “Congressional leaders sounded positive notes after their first round of talks about their ability to craft a bipartisan budget deal. Aides said the leaders agreed to a two-stage approach that would make a down payment on deficit reduction this year. The second stage would force detailed decisions next year on thornier tasks such as overhauling the tax code and cutting spending, including to entitlement programs.”
This morning Sen. Kelly Ayotte set the alarm bells ringing on high by delivering a GOP weekly radio address that included these lines, “And one thing is clear: the American people expect Republicans and Democrats to work together to solve the difficult challenges we face…In just over a month, tax rates that have been in place for more than a decade are set to increase. And automatic, across the board spending reductions will kick in–cutting funding for everything from our troops to federal cancer research.” (Research is a favorite Obama line when talking about this topic, and something Republicans haven’t uttered before.)
Ayotte made mention of not raising taxes, but she had nothing to say about the nation’s so called “job creators.” She said, “Tax reform that eliminates wasteful tax preferences to generate revenue will help bring fairness and efficiency to our tax system. This approach makes more sense than raising tax rates–which will harm nearly a million small businesses and cost hundreds of thousands of jobs.” (Ayotte’s language is ambiguous enough for Republicans to protect the rich, but the GOP has seriously toned the job creator stuff which shows a willingness to move on from that sticking point.)
If you put the pieces together, it is starting to look like President Obama is about to get exactly what he wants. Ayotte mentioned small businesses. Obama has been asking the House to pass the legislation that has already passed the Senate that would keep the Bush tax cuts in place for 98% of taxpayers and 97% of small businesses.
The two step process looks like it may go something like this. The House passes the bill to keep the Bush tax cuts for the 98% now, entitlements are off the table until later, revenues are raised through a combination tax reform and quietly letting the Bush tax cuts expire for the wealthy.
For early reaction on how the right is taking their party’s cave on tax cuts let’s throw it to Rush Limbaugh,
Folks, this was predictable, too. The Republicans are establishing the mechanism to cave on tax increases. McConnell, we’ve got the sound bite, ready now to talk about revenues as long as there’s talk of spending cuts, but you and I know that there won’t be any Now, here’s something to think about. How’s he gonna get that — and he will. See, this is the thing that we’ve gotta realize. This is going to happen. It may be 1.2. He is going to get this. Boehner, we had our note from the chief of staff for Congress say Boehner said let Obama lead and see where it takes us. McConnell says we’re fine and dandy on the revenue side now. The Republicans are the ones that always, “Okay, we lost the election, we’re gonna have to moderate our tone and our beliefs,” and all this. So we’re on the verge here of watching the cave. of those because Obama doesn’t have to cut any spending. That’s the last thing there’s gonna be, and so Obama wants $1.6 trillion in new taxes.
As I have written repeatedly, some on the left who are fearing an Obama cave on this issue are way off base. This isn’t 2010. The pressure has shifted. By not cutting a deal when they had the chance and agreeing to automatic cuts, Republicans sowed the seeds for their own demise. They gambled everything on Obama not being reelected, and they lost.
Obama can win by doing nothing. Republican have realized this, and are rapidly advancing towards full cave in mode. Republicans designed the fiscal cliff, and now they are the ones teetering towards the edge.
Momentum has shifted. Dynamics have changed, and it looks like President Obama is on the cusp of a huge political victory.