How the GOP can turn Obama’s ‘I won’ attitude against him

So far, President Obama and Speaker John Boehner aren’t negotiating a way to rein in budget deficits in private this time. They’re negotiating in the press, and Obama is taking the hardest line.

While Boehner has signaled a willingness to increase tax revenue by limiting and eliminating deductions rather than by raising tax rates, Obama says his idea of compromise is to do both. He wants $1.6 trillion in new revenues over the next decade, which is double what he and Boehner nearly agreed to do during the 2011 debt-ceiling talks.

Virtually all of this new revenue would come from high earners: individuals making more than $200,000 or couples making more than $250,000. Raising their tax rates and capping their itemized deductions is estimated to bring in more than $1.43 trillion. The “Buffett Rule” would tack on another $47 billion, bringing the tab to $1.48 trillion for those at the top of what’s already the most progressive tax system in the industrialized world.

Obama is so committed to his position that his spokesman says the president will veto any tax bill that leaves rates intact for the top two income-tax brackets (currently 33 percent and 35 percent). The rates for these brackets are scheduled to expire Jan. 1 and rise to 36 percent and 39.6 percent, respectively. Problem is, the current rates for everyone else are also scheduled to expire Jan. 1.

You gotta love Obama and the Democrats. They care so much about the middle class that they will let middle-class tax rates rise, if that’s what it takes to stick it to “the rich.” Somehow, though, Obama succeeded in making a majority of the electorate believe it’s the GOP that is holding the middle class hostage by insisting on keeping all rates the same next year.

It is ludicrous to claim Republicans are playing tax-rate chicken more than the president. In fact, it’s closer to the opposite, because Boehner is saying he’s willing to raise revenues, just not in the same way as the president. Obama is not only insisting on his end but his means — and saying everyone will feel the pain if he doesn’t get both.

It’s ludicrous, but . . .

It’s also brilliant politics. Obama knows voters gave him the benefit of the doubt and that he’s got limited time to take advantage of that (as all second-term presidents do, particularly those whose party doesn’t control Congress). However, he may be able to turn it into a longer-term advantage with this little two-step:

1. Force House Republicans to accept higher taxes on “the rich” before Jan. 1 on high earners to stave off tax hikes on everyone else, for which he knows Republicans know they would be blamed; and then

2. When the GOP comes back next year seeking spending cuts and structural changes to entitlements as their part of the “balanced” “compromise” Obama keeps insisting he wants, he can either tell them to take a hike or make a deal that puts all the onus for unpopular cuts on Republicans. (I’m sorry, my fellow Americans, but just to get the rich to pay their Fair Share, those evil Republicans insisted on ending Medicare as we know it…)

Some of you will say I’m making the president out to be unserious about our fiscal challenges. To you I say: No, his two campaigns and first term revealed him to be that way.

After all, that’s the only way to explain a proposal that raises an average of $160 billion more per year — when the deficit last month alone rose to $120 billion — while double-counting spending cuts such as those for ending the Iraq and Afghanistan wars (decisions that were already made and thus don’t represent new savings) and seeking to increase expand spending (er, “investments”) in certain favored areas.

What we’re really seeing here

So, to Obama, this clearly is more about good politics than good policy. The House GOP should respond in kind.

It should pass the “Buffett Rule” bill that failed to pass the Senate in April, amended to include an extension of all current tax rates through 2013, as a down payment. While the Buffett Rule is projected to raise $47 billion during the next decade if the current tax rates for high earners are not extended, I’ve seen projections of more than $160 billion in 10 years if rates don’t rise. That’s an increase of approximately $16 billion next year, and it comes from real millionaires — not Obama’s “millionaire” couples who earn $250,00 a year.

Given the support for Obama in America’s wealthiest counties, not to mention Hollywood, I’d chalk this up to a paraphrase of Mencken: It appears the truly rich know what they want, and they deserve to get it good and hard.

At the same time, House Republicans should introduce a bill outlining the deductions-cutting approach for which Boehner has expressed support. Many deductions represent subsidies that are merely located in the tax code rather than an appropriations bill, and this approach allows Republicans to talk about the importance of getting government out of private decision-making without reducing incentives to work, save and invest (by increasing marginal tax rates). I’d go ahead and include a corresponding reduction in tax rates but make clear that’s negotiable, depending on what happens on the spending side.

What might this look like? Capping deductions at $50,000 a year would, according to an analysis by the Tax Policy Center, raise almost $750 billion over 10 years, with about 80 percent of that money coming from the top 1 percent of earners. The change in the average tax payment for the three lowest income quintiles would range from zero to $12 a year. Again, this approach does not leave taxes on “the rich” intact.

Your turn, Democrats

For now, that’s it. Dare Senate Democrats not to pass, and president to veto, a bill that includes their cherished Buffett Rule, just because it also keeps all tax rates in place for one more year while the two sides negotiate further. Further call their bluff with that second bill to raise even more revenue, almost all of it from the very highest earners, in the most economically sound way. Then, explain you’re looking forward to tackling the country’s real fiscal problems next year, and adjourn.

And leave it to Harry Reid and President Obama to explain to 99 percent of tax filers why their taxes are going up so that taxes can rise even more on the top 1 percent.

– By Kyle Wingfield

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542 comments Add your comment

fair and balanced

November 14th, 2012
12:15 pm

give the tea party their wish -over the cliff!

JDW

November 14th, 2012
12:20 pm

@…Kyle…fixed your first typo…

You gotta love Boner and the Repugs. They care so much about the rich that they will let middle-class tax rates rise, if that’s what it takes to keep Grover off their a$$.

getalife

November 14th, 2012
12:22 pm

Still trying to get our President Kyle?

That is the wrong mindset.

JDW

November 14th, 2012
12:22 pm

@Kyle…” Obama is not only insisting on his end but his means ”

It’s just math…as Geithner and the rest of us constantly said as Romney pounded this dead horse…you can’t get there by just limited deductions.

I Report (-: You Whine )-: mmm, mmmm, mmmmm! Just sayin...

November 14th, 2012
12:25 pm

The 7.5% of 2008 voters that seceded from obozo won’t like this.

Finn McCool (The System isn't Broken; It's Fixed)

November 14th, 2012
12:25 pm

knock
knock

“Who’s there?”

Taxman



knock
knock

Kyle Wingfield

November 14th, 2012
12:25 pm

JDW: Not sure which typo you meant. And “math” doesn’t work for Obama’s plan, either. He is talking about $2T in real measures over 10 years. We are scheduled to have $10T in deficits during that time.

So, as long as he’s not being serious, you might as well point out just how unserious he’s being. Maybe after that we can get something serious done.

JDW

November 14th, 2012
12:27 pm

New term…same ole Republicans so far…my guess is the top two rates plus capital gains rates are going up or Republicans will be explaining the reason we went over the cliff.

JDW

November 14th, 2012
12:29 pm

@Kyle..the typo where you try to put the onus on Obama..he ran and was elected on the principle that those rates would rise…he can and should stand pat. It is the Republicans that, so far, seem willing to have the rates rise for the rest of the population along with them…the monkey is on the back of Boner and crew.

JDW

November 14th, 2012
12:31 pm

@Kyle…”He is talking about $2T in real measures over 10 years. We are scheduled to have $10T in deficits during that time.”

How do you eat an elephant?

cc

November 14th, 2012
12:34 pm

JDW:

Exactly what part of “deficit” and “debt” do you not understand?

What Obama is doing WILL take the U. S. over the cliff, and people (like you) either do not understand it, refuse to accept it or just want the “rush” of cliff diving.

Finn McCool (The System isn't Broken; It's Fixed)

November 14th, 2012
12:37 pm

Let ALL the tax cuts expire and then turn around and sign a tax cut for those households earning less than $250,000 a year.

pbbbbbtttttttt

Native Atlantan

November 14th, 2012
12:38 pm

Wow…barely a week after the election and this is what you come up with? Obama did win….and there are very good reasons for it. Going down this path this soon seems…well, like sour grapes.

Finn McCool (The System isn't Broken; It's Fixed)

November 14th, 2012
12:39 pm

cc, there is no cliff. The “cliff” is a media term meant to scare the gullible. Most of the mandatory spending cuts are phased in over time so Congress could act at any time to stop them.

There is no cliff.

JDW

November 14th, 2012
12:40 pm

@CC…”Exactly what part of “deficit” and “debt” do you not understand?”

I understand both very clearly. Including the point that escapes you, that Duhbya inherited an annual budget surplus and turned it into a $1.3 trillion annual deficit. Obama is going down the road of restoring that balance and it will take time. A 20% bite off the top is a great start.

carlosgvv

November 14th, 2012
12:40 pm

Obama has not been braging in public about how he won. Calling this essay “How the GOP can turn Obama’s I won attitude against him” sounds like something a high school sophmore would write.

Perhaps your encouraging Republicans to meet Obama half-way and try to hammer out a compromise would be a more adult thing to do.

Cutty

November 14th, 2012
12:41 pm

‘I earned capital in this campaign, political capital, and now I intend to spend it.’

‘When you win, there is… a feeling that the people have spoken and embraced your point of view.’

Kyle voted for Deal, Newt, and Mitt. That’s all you need to know about his ‘opinion’.

I Report (-: You Whine )-: mmm, mmmm, mmmmm! Just sayin...

November 14th, 2012
12:41 pm

America already jumped over the cliff.

Now comes the crash.

JDW

November 14th, 2012
12:43 pm

O’ and cc…they said Clinton was going off the “cliff” when he raised taxes and it didn’t turn out that way…it won’t this time either…frankly my preference is to let ALL the tax cuts be restored to Clinton era rates AND spread those budget cuts around as well.

At least Obama is doing some of that rather than spouting hogwash about new tax cuts.

Jill

November 14th, 2012
12:46 pm

The Democratics will own both the recession and the inflation that will pay for the bail-outs.

They just can’t tax us enough to pay for it all.

mike

November 14th, 2012
12:47 pm

All of the Bush tax cuts should be allowed to expire.

Bye Bye Cheesy Grits

November 14th, 2012
12:49 pm

I’m not sure why the secession stuff bothered you so much Kyle.

After all that is your parties base.

The top tax rate in this country was 91 percent under Eisenhower.

Tax rates for the wealthy are incredible low and have been for some time now.

You can almost see a correlation between the top tax rates going down and the debt exploding.

Reagan lowered the top rates dramatically while in office and in 8 years he quadrupled the national debt.

Far outpacing Obama BTW.

When someone like Mitt Romney pays half the rate the average American does something is wrong.

The American people voted to correct it.

Finn McCool (The System isn't Broken; It's Fixed)

November 14th, 2012
12:50 pm

Well, we need the middle class spending $’s as best they can (middle class consumers spending money on goods and services are the TRUE job creators) so I say we keep their tax cut in place until we get the economy in a better spot.

Bye Bye Cheesy Grits

November 14th, 2012
12:50 pm

All of the Bush tax cuts should be allowed to expire.

Agreed. And that means my taxes are going up as well.

There isn’t another way.

Lynnie Gal

November 14th, 2012
12:51 pm

Same old Republican non-cooperation. You guys just don’t get it. Americans have spoken. Raise taxes on the RICH and leave the middle class (99%) tax breaks alone. Obviously, Republicans are still ready and eager to commit political suicide in order to protect the rich. Go ahead. Pull the trigger. We’re going off the cliff together.

ideasbm

November 14th, 2012
12:51 pm

These Obummmer idiots are so stupid. Very short memories. Just let pass the extension in the House and let it stall in the Senate or veto by the Bummmer….then I want to hear the pigs squeal….let they try to blame the Grand Old Party but in fact it will eventually it will come to their lame brains that it was Bummer, Reid and gang who are pushing this whole country off the cliff. I just with they could take Bookman the idiot with them.

lefty_316

November 14th, 2012
12:52 pm

A look at the election results from last week tells the story of what the republicans need to do.

1. 67% of single women voted for Obama – The GOP needs to keep their noses out of birth control. This should not even be an issue. Ever.

2. Exit polls found in Virginia (64%) and Ohio (56%), two states that recently enacted new abortion restrictions, that voters support abortion under almost all circumstances – Polls consisently find 75% of Americans don’t think Roe v. Wade should be overturned. It’s time for the GOP to jettison abortion as an issue. It will always be the #1 issue for social coservatives, which is fine, they should be encouraged to leave the GOP and start their own party.

3. Gay marriage amendments passed in 4 states – Another loser issue that the GOP needs to walk away from.

4. Stop asking candidates their views on religious issues – Instead here’s an idea: follow the Constitution. See Article VI, Paragraph 3, “no religious test shall ever be required as a qualification to any office of public trust under the United States.”

Mr. Holmes

November 14th, 2012
12:53 pm

George W. Bush, post-election 2004: “I believe I earned some political capital, and I intend to spend it.”

The only thing “ludicrous” is the belief that Republicans will change their tune out of the lily-white goodness of their hearts. Last year they were willing to drive the country over the cliff to get their way, so why in the holy h-e-double hockey sticks should we believe they’ve changed? Because Boehner said so?

If the GOP is smart, they will take steps to ensure it does NOT turn into a game of sequestration & tax-cut expiration chicken. How many people, Kyle, are going to sympathize with those earning >$250K/year? When the president says, “I’m waiting for a bill that preserves the cuts for the middle class and eliminates them for the rich. It’s what I campaigned on, and I will not sign anything else,” how many people will line up behind him?

This whole column was nothing but a big whine about the consequences of losing an election. Well, I’m sorry, but that’s the world we live in. If the economy does what EVERYONE on the Right (except maybe Bill Kristol, of all freakin people) is saying it will do and tanks after these tax hikes take effect, well then the GOP will have a helluva platform for 2014 and 2016. Until then, DEAL WITH IT.

Sorry, just 7 days+ of Republican whining and secession talk has me worked up.

Finn McCool (The System isn't Broken; It's Fixed)

November 14th, 2012
12:54 pm

Like I said above, let all the tax cuts expire and then give the middle class a tax cut (a wash for them).

Now we are set to try to deal with the Republicans: for our agreeing to spending cuts, we now want the capital gains rate lifted to 30%.

B
O
O
M

Kyle Wingfield

November 14th, 2012
12:54 pm

JDW: I think it would be a mistake for Obama to assume everyone is interested in “rates” vs. “taxes paid.” There is a less economically destructive way to raise revenues than by raising marginal tax rates.

In any case, the deficit is never going to be closed as long as GDP is growing at 1-2% a year. The GOP needs to be willing and able to explain that, and why its policies are better for growth.

mike

November 14th, 2012
12:55 pm

If I’m not mistaken, the United States is the only country in history to have a war AND a tax cut at the same time. Like I have, if people had to actually PAY for wars instead of putting them on the “credit card,” there would be such an outcry that there likely would be no more wars. At least not wars of opportunity.

Kyle Wingfield

November 14th, 2012
12:56 pm

carlosgvv: “I won” refers to what he said right after his first inauguration — you know, back when you think he was reaching out to the other side of the aisle. Asking for twice as much as he was asking for last year certainly indicates to me that’s still his attitude.

Kyle Wingfield

November 14th, 2012
12:58 pm

Lynnie Gal: Sorry, but you don’t “get it.” Raising revenues does not have to mean raising rates. What about my suggestion that they pass the Buffett Rule and propose $750B worth of deduction reductions — almost all for the top 1% of earners — suggests anything but raising taxes on the rich?

Kyle Wingfield

November 14th, 2012
12:59 pm

lefty_316: We’re talking about fiscal issues here, not social issues. I know changing the subject worked during the election, but let’s not do that on this thread.

Aquagirl

November 14th, 2012
1:00 pm

The GOP needs to be willing and able to explain that, and why its policies are better for growth.

All they can produce is “wahhh!” “succession now!” and “you voters are stupid ignorant sluts!”

Yeah, throw down the obstructionist gauntlet, Republicans.

Kyle Wingfield

November 14th, 2012
1:02 pm

Mr. Holmes: Actually, more people on the left are talking about jumping off the fiscal cliff rather than giving in one iota to Republicans. See Paul Krugman for one. And Kristol said Sunday he thinks we ought to raise taxes on millionaires. So, maybe you should have spent less time paying attention to a small but very vocal crowd talking about secession, and more time to how this debate is actually going.

Kyle Wingfield

November 14th, 2012
1:04 pm

Finn: Yep, BOOM is exactly what’ll happen to the economy if you tax capital gains at 30%. If you’ve enjoyed the sell-off over the past week since the election, you’ll LOVE what happens after that.

Jefferson

November 14th, 2012
1:05 pm

Boneheaded losers want to turn against the president. Americans work for prosperity, something you missed in school.

Jefferson

November 14th, 2012
1:06 pm

Fear of money, what a novel idea…

Mr. Holmes

November 14th, 2012
1:06 pm

Oh I’ve been paying attention to all of it (my post mentioned Kristol, in case you missed it). And the administration spent so much time listening to Paul Krugman during the first term, I’m sure they’ll pay even more attention to him in the second!

And in case YOU haven’t been paying attention, Kyle, who seems to drive the Republican party these days? The “small but very vocal” fringe, or the sober-minded “realists” [sic] like yourself? You thought enough of the small loud crazies to pen an ode just to them this week, didn’t you?

Finn McCool (The System isn't Broken; It's Fixed)

November 14th, 2012
1:06 pm

Paul Krugman is God.

Jefferson

November 14th, 2012
1:07 pm

Reasonable people can come to reasonable conclusions under reasonable conditions unless you are a republican.

Finn McCool (The System isn't Broken; It's Fixed)

November 14th, 2012
1:08 pm

Finn: Yep, BOOM is exactly what’ll happen

Relax, we’ll phase it in….

And we will set the capital gains increase to expire in…..10 years!

mike

November 14th, 2012
1:09 pm

Boehner and Obama are arguing over $1.6 trillion OVER TEN YEARS! That’s only $160 billion per year! Our federal budget deficit for 2012 will be $1.1 trillion. $160 billion won’t even make a dent in that. What will make a dent is reducing military spending to what it was when George W. Bush took office. That would save around $500 billion/yr and go a long way toward reducing our deficit.

Centrist

November 14th, 2012
1:15 pm

Obama made history by an incumbent winning a close re-election by a smaller margin than his first time. Hardly a mandate.

The Republican House is NOT going to cave on raising tax rates. This is posturing, pure and simple. Obama and Democrats either negotiate other tax changes (and spending cuts), punt further into next year by extending current tax rates/ sequestration, or they go over the fiscal cliff. I’m betting it won’t be the latter – while the more liberal media pouts.

Kyle Wingfield

November 14th, 2012
1:16 pm

John Q: Boehner was ready to do $800B in new revenues back in 2011, before Obama upped the ante at the last minute. He’s back to talking in those terms (everything but the dollar figure, which he hasn’t discussed this time, sounds about the same as it did back then), and Obama rejects it out of hand. The fact is, both sides are refusing to come off hard, long-held positions, and either could lead to everyone’s taxes going up.

Btw, I fail to see how my suggesting the GOP pass the Buffett Rule and propose $750B in new revenues from “the rich” somehow equals “continued obstinacy and obstructionism.” Unless in your view doing anything other than exactly and completely what the president wants is “obstinacy and obstructionism,” in which case I plead guilty.

clem

November 14th, 2012
1:17 pm

what part of marginal tax rate do you folks not understand? and folks like mitt need to pay more than 14% (likely did not pay that high on his other returns)

unless the congress is capable of doing thorough review of tax code in 1 month, rates go up and may come down for corporate and individual after tax code made contemporary and loopholes are cost/beneficial.

maybe they can do something with amt to get the revenues they need from upper income folks that could be done in short order.

cuts need to be made too, but examined in light of sluggish economy….of course mid term medicare reform necessary as well as longer term social security.

omie

November 14th, 2012
1:20 pm

Why does the GOP need to turn anything against anybody!?!?!?! Run the damn country and stop picking fights with everybody.. Stop holding on to your views so hard that you can’t see whats right in front of you…. This is still the greatest nation in the world…. ACT LIKE IT! So frustrating.

Kyle Wingfield

November 14th, 2012
1:20 pm

mike: Obama’s FY13 budget called for defense spending of $701B. Defense spending hasn’t been $500B below that since 1982.

And before you say something “Bush did it off-budget!” we are talking about actual outlays, not budgeted figures.

Dan

November 14th, 2012
1:20 pm

I believe this ‘fiscal cliff’ nonsense is a tad overstated. If all the tax rates increase, what is it? From 35% to 36% for the middle class and 36%-39% on the higher earners? Or in more general terms back to Clinton era tax levels. I just do not see that kind of rate increase having a dramatic effect on the entire economy. Maybe if the numbers were more like 40-50% then a recession would appear more imminent.

Another thing is that during the 90’s after the HW Bush tax increases, and then again in c1994 with Clinton’s tax increase the economy started humming right along. Fast track to the 2000’s when W Bush cut rates twice and we saw two recessions that culminated in the worst economy in just about all of our lifetimes.

One last point is that I heard the latest exit polls from last Tuesday showed strong support among all Americans for tax increases across the board. It seems the trend around the country is that loophole closures & entitlement cuts alone are just not good enough. I have no doubt that there is a small political game in place, but I do not think it is accurate to say the middle class is being held hostage when they seem ready to take on a slightly higher tax.