Is there anyone out there who didn’t see this one coming a mile away?
Republicans have rejected President Obama’s opening budget bid.
In a Capitol meeting with House Speaker John Boehner Thursday, Treasury Secretary Timothy Geithner submitted the Obama administration’s proposal for addressing medium term deficits, and avoiding across the board tax increases and spending cuts at the end of the year.
Republicans called the proposal outlandish and brushed it aside as unserious. But it’s almost entirely comprised of policies Obama campaigned on and included in his budget for the current fiscal year. And by satisfying GOP demands that Obama offer up a plan that includes spending cuts, it paints Republicans, who have been reluctant to specify their own Medicare cut proposal, into a tight corner.
The White House formally proposes to increase tax revenues by $1.6 trillion over 10 years by increasing top marginal income tax rates and taxes on both capital gains and dividends, and by limiting tax deductions for top earners, according to Republicans.
I am pretty sure I predicted this in August 2011 when we did this the last time. It would start out with everyone saying that they were sure they could come to an agreement to avoid the imminent threat, then each would come up with something, and the jousting of the talking points would begin. The Republicans would accuse the White House of not being serious (irony and self-awareness not being their strong suit), then they would come back with something equally unserious. Meanwhile the Very Serious People on the cable shows would go back and forth with their chin-stroking about who’s at fault and decide it’s both sides, even if it isn’t. And life goes on as the deadline approaches.
This is how they came up with this current situation: the Fiscal Cliff (which sounds like either a one-hit wonder band from the ’60′s or the guy from Cheers carrying on about monetary policy) was put in place by both the White House and the GOP in August 2011 just to insure that we would have this entertainment a year later. Apparently this is something they enjoy.
The last time, though, the GOP had the cards. If the debt ceiling wasn’t extended — a minor technical point that was a one-page bill when they were in the White House — then we’d have trouble with paying off the bills that George W. Bush and the Republicans ran up. But suddenly it was The Most Important Thing In The Whole Wide World. In the end they came up with this Fiscal Cliff idea that lets the Bush tax cuts expire and a bunch of cuts, mainly in defense, go into effect on January 1.
This time President Obama has all the cards. If nothing happens, the tax cuts go away, the defense cuts go into effect, the deficit drops, and the Republicans are left to explain why they stood in the way of continuing unemployment insurance and keeping the middle class tax cuts. President Obama is not running for re-election, so his work is done. And the Koch Brothers and all the other folks who paid good money for the GOP are wondering why John Boehner and Mitch McConnell are tearing up the bill they sent them for all the money they spent.