Here's an idea to solve the stalled debt negotiations: President Obama should accept the Ryan budget in exchange for Republicans agreeing to raise the debt limit. The Ryan plan closes the corporate tax loopholes everyone wants closed, lowers the corporate tax rates as Republicans want, and does more than the President's “grand bargain” to put Social Security, Medicare and Medicaid on structurally sound footing and get spending under control. And here's the best reason of all: the Ryan budget already passed the House back in April.
House Budget Chairman Paul Ryan — who for some crazy reason is not part of the negotiations — explained on Morning Joe this morning why simply raising taxes on billionaires isn't the answer. Allowing the Bush tax cuts to expire just as Obamacare comes online will put the effective top tax rate for individuals at a whopping 44.8 percent in 2013 — and that doesn't include state taxes on top of that. In his district, Wisconsin business owners who compete with Canadian corporations right over the border are painfully aware that their Canadian competition pays only 16 percent in taxes.
According to Ryan, right now 54 percent of workers get their jobs from businesses that file as individuals (such as partnerships and sub-chapter S corporations); one in four people in the US get their jobs from sub-chapter S corporations. If the left had its way, those businesses would be facing a nearly 45 percent tax rate two years from now. We all know that it would not be a rational economic decision for companies facing that kind of looming tax bill to suddenly start hiring now.
President Obama has proposed $46 trillion in spending over the next ten years. His "grand bargain" of reducing the deficit by $4 trillion doesn't go nearly far enough. He's offered nothing on paper as far as specifics — especially on entitlement reforms — yet he continues to accuse Republicans of being intransigent. Yet it's Republicans who actually have a plan on paper, and it's one that has already passed the House. When Senate Majority Leader Harry Reid held a show-vote on it in the Senate in May, the Ryan budget lost by 57-40. But I bet it would pass now, especially now that the cost of doing nothing seems to grow daily. The House has already agreed to it. Now it's time for the Senate to hold a real vote and for President Obama to sign it in time for the August deadline for the debt ceiling. It's not crazy.