Friday, January 4, 2013
McConnell, Boehner saved most of the tax cuts
By: Allan H. Ryskind
1/4/2013 10:47 AM
Here’s a question for many conservatives: Whom would you rather have negotiating a business deal for you–Senate Minority Leader Mitch McConnell or those House Republicans who would have had us sailing over the cliff rather than accept any compromise with the president?
Personally, I’d hire the Minority Leader. Since the deal, middle class workers and businessmen have been happier, the stock market has soared, retirement accounts are going up and most of the Bush tax cuts that affect people like me have been preserved.
The Over-the-Cliff folks, alas, would have deprived the nation of every one of these good things because they didn’t want to raise a single penny on those making over $1 million a year–as if the increases would have seriously affected their incentive to work or their entrepreneurial spirits.
Even McConnell’s detractors should concede that he was not dealt the best of hands on November 6. A re-elected Obama won the popular vote, the electoral vote and virtually all of the battleground states. His party picked up two seats in the Senate after the pundits claimed a GOP gain there was a slam dunk.
The GOP’s majority in the House was diminished as well. Obama didn’t have much of a mandate, but he had pledged–over and over and over again–that he was determined to repeal all the Bush tax cuts benefitting the “wealthy,” described by him as households and small businesses making as little as $250,000 annually. And he never let up on that demand after his victory.
The President then made a very tempting offer to his fallen foes. Allow me to paraphrase: “I’ll let you keep virtually all of the Bush tax cuts, 96 percent of them, cuts which we Democrats have endlessly demagogued against as favoring the wealthy and ballooning the national debt. But if you refuse to accede to my generous offer, all of the Bush cuts, even for lower income earners, will automatically expire on January 1. That will mean, according to your own Heritage Foundation, about a $4,000 tax increase for the average U.S. family. And you Republicans, as the polls happily reveal, will be badly blamed. Your party’s brand as the champion of tax cuts will be tainted or ended. And the media, of course, will be taking my side of the argument. So, do we have a deal?”
Over in the House, Speaker Boehner responded first, giving a firm “No”–against the advice of many good conservatives like Rep. Tom Cole, who thought conceding was the better part of valor and that conservatives should be concentrating on spending cuts instead.
But Boehner, in back-and-forth negotiations with the White House, finally moved a seemingly immovable chief executive to give a bit on entitlements and a lot more on taxes. The $250,000 figure, Obama surprisingly conceded, was no longer set in stone and he would be willing to extend the Bush cuts to those making as much as $400,000 annually, thus salvaging the cuts for millions of more folks.
As a huge fan of those cuts, a godsend to the economy and a gusher for the Treasury, I thought, hey, Boehner is putting up a decent fight for people who think like me.
He’s not letting Obama roll him, even though the president clearly has the upper hand. And he even got Obama to toss in some spending cuts on both Medicare and Social Security, which the Democrats had said had to be off the table in the lame duck session. When Boehner could get no more spending cuts from the president, however, he ended negotiations and came up with Plan B, which would have extended the Bush tax cuts to those making over a million dollars annually. The “Over the Cliffers,” however, wouldn’t go along, saying that all of the tax cuts had to be preserved, even though the author of the GOP tax pledge, Grover Norquist, was giving Boehner a pass. The Speaker then abandoned the field of battle, telling McConnell that it was up to him to save the day.
McConnell, however, had been politically weakened when Plan B, which would have provided him some leverage, was blocked from going over to the Senate. Unlike Boehner, McConnell was also operating from a chamber controlled by Democrats.
Moreover, the cliff deadline was fast approaching. In the teeth of all this, the Minority Leader pulled off a small triumph, salvaging the overwhelming majority of the Bush tax cuts, ending the Alternative Minimum tax increase threatening to engulf some 30 million folks, preserving most of the existing estate taxes which the Democrats were eager to send skyward and even securing the “doc fix.” He accomplished all this while holding not much more than a pair of deuces. The deal was hardly perfect, of course, and non-Bush taxes will be going up on plenty of individuals. But they won’t be nearly as onerous as if the majority of the Bush tax cuts hadn’t been kept.
There were, of course, no spending cuts to speak of, but whose fault was that? Obama and the Democrats, who showed no real interest in major entitlement reforms during the lame-duck session.
But it’s not as if the Republicans won’t get another crack at putting a major proposal on the table to significantly cut the deficit. The sequestration law, postponed for two months, provides for nothing but automatic spending cuts of a trillion dollars.
There’s no reason Republicans can’t build on that piece of legislation. That’s the time, one would think, for the GOP to bring out a well thought-out plan. There will also be the ongoing battle to lift the national debt ceiling, which provides a riskier debt reduction opportunity.
In the meantime, McConnell and Boehner, with major obstacles from both Obama and the “Over the Cliffers,” should be honored for the very tough fight they’ve been waging on behalf of us taxpayers. Their harsh conservative critics, in my humble view, have not yet outlined a coherent case against them.
To read more about the Fiscal Cliff results, click here.
Posted by Brett at 12:41 PM