House Speaker John Boehner is under fire from conservatives, deservedly so, for proposing that income taxes be allowed to go up on Americans making more than $1 million per year.
Raising taxes, especially in a weak economy, is disastrous. As America nears the fiscal cliff, however, the political demands of the moment are outweighing the economic reality. As a pledge signer, Boehner is committed to oppose any and all efforts to increase marginal income tax rates. Yet the president's intransigence has him backed into a corner. If Congress fails to act, taxes will go up on more than those with million dollar incomes; they'll go up on everyone.
Missing in the discussion is the fact that Barack Obama has been absent without leave. The president talks in generalities but the simple fact is he has said "No" to everything Boehner has proposed, even when those proposals originated from the White House itself.
Obama is not interested in avoiding the fiscal cliff. As I have written before, going over the cliff gives him everything he wants: higher taxes, deep cuts in defense spending, and the ability to position himself next year as a tax cutter. More than chalking up a win for the American economy he wants to bring the Republicans to their knees.
Boehner's latest idea, the conservative Heritage Foundation noted Tuesday, "essentially ignores Washington's real problem—spending—and puts a $1 trillion tax hike on the table. It's so bad that conservatives are now left with only one unfortunate alternative—passing a temporary measure that avoids a doomsday scenario until the end of March." Nevertheless, Heritage added, "It's the best possible outcome with the days dwindling on the remainder of 2012."
It's hard for Boehner and the Republicans to negotiate when they want a deal and Obama fundamentally doesn't. This essential fact, which is missing from most of the media narratives concerning the ongoing discussions in Washington, defines the debate over the fiscal cliff.
What does this mean? Well, as Ohio Republican Rep. Jim Jordan, the outgoing chairman of the Republican Study Committee put it, "The small business tax increases Democrats campaigned on would only pay for 8 days of federal spending. So aside from raising taxes—money they will surely try to spend—what exactly do liberals propose to do about deficits and the national debt?"
In Jordan's view, the spending cuts the Democrats are willing to advocate "are mostly gimmicks. They won't touch Obamacare. They won't fix Food Stamps or Medicaid. Even though Americans are living longer and Medicare won't be able to pay full benefits in just a few years, they won't adjust the eligibility age or consider our suggestions for long-term reform. On Social Security, liberals won't even admit the obvious—that it's losing money and increases the deficit every year."
The Study Committee has put forward a budget proposal that at least deserves a vote. It includes enough reforms and spending cuts, Jordan said, "to balance the budget in five years without raising taxes. All it requires are good choices and a little discipline. Contrast that with the president's plan, which assumes all his proposed tax increases and still never stops piling up debt. Raising taxes will hurt the economy, and it won't solve the debt problem. The only way to do that is for politicians in Washington to stop spending so much of your money."
Obama wants higher taxes and more spending. Boehner and the Republicans would prefer no tax hikes and lower spending. Right now the American people support the latter approach, according to most polling data, but are also backing the president. It doesn't make much sense, unless you consider what is missing from the story that most of the media are telling.