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Obama Poised to Win as GOP Signals A Complete Cave In on Tax Cuts for the Rich
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.
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28 Responses to Obama Poised to Win as GOP Signals A Complete Cave In on Tax Cuts for the Rich
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ThomasW
Nov. 17th, 2012 at 12:30 pm
Please never divide policy into to stages with republican. By the time the second stage comes around. They will have found a way to get out of it.
Jason Easley
Nov. 17th, 2012 at 12:48 pm
Thomas, do you mean like how Obama allowed Republicans to divide debt reduction, and now they are faced with a complete defeat on tax cuts and deficit reduction? I am sorry, but your point appears to based more on a fear of Republicans than the actual facts about what is happening.
Edward Baker
Nov. 17th, 2012 at 12:33 pm
We ,the collective total of voters showed that We are in power not the corporations .Stand together and we are unbeatable ,.don`t let the Republicans ever divide us again……..
ae
Nov. 17th, 2012 at 2:56 pm
“Don’t let the republicans ever divide us again.”
Using divisive speech to call for an end to division? Have you had your coffee this morning?
Conservatives aren’t the enemy. They’re other Americans. They’re on the same team as us, man. They just have a different ideology.
Stop talking about the other political party like they’re the enemy. That’s a good way to start ending American division, don’t you think?
Jo Hargis
Nov. 17th, 2012 at 10:12 pm
When conservatives stop acting like the enemy, the Dem side will be most happy to have all of us on one team. You think we should just forget the last two years of complete obstruction by the GOP? Act like it never happened? Develop a Pollyanna attitude? That would be a terribly foolish thing to do. The GOP has done ZERO for this country in a long time, but especially in the last two years. They aren’t “for country”, they’re for themselves and enriching their already rich. So give us a break from your pontificating attitude. The ball is in the GOP’s court now, let them prove their worth.
Robert Chapman
Nov. 18th, 2012 at 7:54 pm
To AE, I agree with your call for unity, but I disagree with your implication that the divisness stems from the Dems or from the left.
The GOP use of wedge issues to separate the different components of the Democratic coalition from mutual support is the practice that Jo Hargis denounced here.
While we can all agree that there is no general reason to denounce Republicans, we can all agree that their use of wedge issues is reprehensible.
We can also simultaneaously pledge to resist using wedge issues against the GOP ourselves.
galactusx
Nov. 17th, 2012 at 12:57 pm
People have seriously underestimated the genius that is our President Barack Obama. To their own peril. LOL!
Willow
Nov. 17th, 2012 at 1:03 pm
WE are poised to win…..President Obama was elected by the vast majority of the voting public to help us win for EVERYONE. That is the message the GOP needs to understand. It is my fervent hope that they will join with the citizens of the United States of America and show the world that we are still a democratic republic.
Anne
Nov. 17th, 2012 at 1:05 pm
The Congressional Republicans have backed themselves into a corner with their obstinate partisanship that was aimed at making President Obama a one-term president. Now that they have failed at that endeavor, it would behoove them to act like they have some sense by enacting on what the majority of Americans want, which is nothing short of reasonable. I hope he continues to hold their feet to the fire until what he wants is a done deal.
Robert Chapman
Nov. 18th, 2012 at 7:57 pm
The GOP have backed themselves into a corner in more ways than one.
It must be repeated as often as possible that the GOP OPPOSE the sequestration of unneeded and excessive military spending, proving yet again that the GOP will do anything with federal spending but cut it.
Karli
Nov. 17th, 2012 at 1:22 pm
I disagree with this analysis. Not letting taxes go up and draconian cuts occur was an Obama campaign promise. He will be expected to deliver. I think the most likely outcome is that the current tax rates will be continued, and Obama will accept removal of certain egregious deductions and exemptions that benefit mainly the wealthy in exchange, though both the elimination of those exemptions and deductions and the increase in tax rates on the highest income levels ought to occur. Also, they will plan on future ‘tax reform’ agreements that the Republicans will use to restore the tax breaks for their high income constituency.
Jason Easley
Nov. 17th, 2012 at 1:25 pm
Your analysis seems based on your own speculation more that what Obama and the GOP leadership are actually saying. Obama said three times in the past week that he will not sign anything that includes keeping the Bush tax cuts for the wealthy. Where you got the idea that he would is beyond me.
Sandra
Nov. 18th, 2012 at 12:29 pm
You’re correct, PO campaigned on letting the Bush tax cuts for the wealthy expire and is in a better position to demand it in his re-election. The R’thugs created the crisis when they refused to continue tax cuts for the middle class if these same cuts were eliminated for the wealthy, they lost that argument on Nov.6th, 2012 and so must capitulate.
Stay Strong, Mr. President, the ball is in your court, keep it there.
Robert Chapman
Nov. 18th, 2012 at 8:03 pm
Au contraire, Jason, Karli seems to on the right track with her comments.
During the first debate and again in the third debate, President Obama stated forthrightly that the sequester will not occur.
On the other issue Karli, raised, the tax cuts, in his press conference and in other remarks since the election, the President has stressed the need for flexibility and negotiation in determining the exact mechanism for making the wealthy pay their fair share.
A final thought is that the grand bargain was not as grand as it sounded due to its conception under pressure from the TEA Party.
There are good strategic reasons to step and reexamine the big picture issues: defense spending, entitlement reform and tax reform become making a comprehensive deal.
Trailfaz
Nov. 17th, 2012 at 1:43 pm
The problem is, republicans are ignorant of just about everything that matters. Your logic is flawed. Your fabricated theory will never come to fruition. You underestimate your one true gOD (Obama).
C.
Nov. 17th, 2012 at 2:01 pm
this is what republican’s are really worried about……whahoo, the middle class America wins!
sphotos-b.xx.fbcdn.net/hp...
Great article Jason! Thank you.
Sugapea
Nov. 17th, 2012 at 2:56 pm
C, Watch Nick Hanauer explain the concept:
www.youtube.com/watch?fea...
clarence swinney
Nov. 17th, 2012 at 2:25 pm
We need a redistribution of wealth and income to middle class
Affordable homes health care education
Get $$$$ out of government Here is how
A. Fed Fund Election—6 months—3 primary 3 general—free equal tv time—a debate week=12=adequate to evaluate candidates—No $ used—Outside limited to little
B. No need to campaign —BAN–all govt employees from accepting anything with a financial value
Progressive Flat Tax by group—14,000B Income is plenty to pay our way and pay down debt —huge Estate Tax —problem is 50% get 87% —change tax code—there are 1300B in exemptions That is why GE paid no tax in 4 of 10 years
Simple—The people will love it
Robert Chapman
Nov. 18th, 2012 at 8:15 pm
I strongly disagree with Clarance Swinney’s call for redistribution to the middle class through the use of the US tax code.
We need to make the economic pie bigger, not just slice it different.
The tax code, as important as it is, is not enough, we need a strong labor movement to make the workplace more equitable, too.
The US needs an industrial policy that will help us to direct resources, talent and effort toward our most competitive areas.
If for example the US has an advantage in the production of computer apps, we should help entrepneurs and other get into the business of making computer apps.
We should also encourage by all legal means the production of consumer and producer goods in this country. There is no reason that irons, TVs, phones and other things should ALL be imported. There is no reason that cotton grown in America should be spun and woven into cloth in America, too.
I agree with Clarence Swinney on the need for a high inheritance tax to protect the level playing field.
I can partially agree with him on the need for progressivity in the tax code, but I think that tax incentives are a good tool for industrial policy and should not be lightly forsworn.
Most importantly, I favor the uplifting of the US middle class by support of a strong labor movement facilitated by a new “Wagner” Act.
The new “Wagner” Act that would give 21st century unions the tools needed to improve our work lives.
Shiva (Moderator)
Nov. 18th, 2012 at 8:23 pm
Distribution of money should only be done through jobs and work. And thats exactly how Obama defined it when he said it.
But then again, if I pay 36% full taxes, and a billionaire pays from 0 to 20%, that doesnt cut it with me. Do away with all deductions. All laws and loopholes. All income sources counted. That would lower everyones taxes even further. Hide the income, go to prison.
But again, the base of the middle class has to be in full employment. THAT is distribution of wealth
patsy soto
Nov. 17th, 2012 at 3:18 pm
This will be the first of many victories for President Obama… his approval rating will continue to rise, and the republican congress will see that they MUST cooperate, and compromise, or they will go down in flames…. and after what the republicans have put this country through, many will consider that a true and just reward….
Steve
Nov. 17th, 2012 at 4:28 pm
This is good to hear, but we need to stop calling cooperation “victory”. Gloating is just going to drive more Republicans to not work with Democrats out of spite.
Connie
Nov. 17th, 2012 at 8:17 pm
I don’t think it helps the process to put out this kind of headline- if things are looking good for our side in the negotiations, it’s safer to be cautiously optimistic than caustically bombastic. The deal aint done yet. No need to stir up opposition to it.
Robert Chapman
Nov. 18th, 2012 at 8:19 pm
I personally spent a ton of my own money and hundreds of leisure hours working for Obama-Biden and the local Dems.
The troops need some good news.
There is no reason to act like a bunch of guilty teenagers when Obama does the things we elected him to do.
It reminds the GOP that we are here, that we are watching and that we are willing to hold them accountable if THEY don’t perform.
Jolly Roger
Nov. 17th, 2012 at 11:56 pm
I was furious in 2010 when the cave on goody bags for the rich were capitulated on. I am much less aggravated now. I may even have to rename my blog.
Tina
Nov. 18th, 2012 at 6:21 am
Don’t count your votes before they are cast.
We cannot believe anything the republicans say at this point.Remember the last 4 years? They agreed on a lot of things until they came up for a vote.Let’s keep the pressure on these guys until they do the right thing for our country, the middle class and the poor.
Beverly Grenert
Nov. 18th, 2012 at 10:34 am
I’m with Tina. Just check this out to see what that smarmy Eric Cantor is aiming to do to the Medicare cost control board.
www.nytimes.com/2012/11/1...
Robert Chapman
Nov. 18th, 2012 at 7:49 pm
Thanks to Jason Easley for this well researched and well crafted piece.
The following quote taken from the article describes the current public GOP position on the fiscal cliff debate.
“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
Senator Ayotte has offered us all an honorable way back from the brink of the fiscal cliff.
There is no reason that the second term should be limited by or tied to the TEA Party mentality that dominated the past two years as it would be if a comprehensive deal were cut now.
Let’s take Senator Ayotte at her word, step back from the fiscal cliff and work out a sound deficit reduction package over the next year that is in the context of needs of the American people going forward.