WASHINGTON – Why are Republicans playing the Democrats’ game that the “fiscal
cliff” is all about taxation? House Speaker John Boehner already made the
pre-emptive concession of agreeing to raise revenues. But the insistence on
doing so by eliminating deductions without raising marginal rates is now the
subject of fierce Republican infighting.
Where is the other part of
President Obama’s vaunted “balanced approach”? Where are the spending cuts, both
discretionary and entitlement: Medicare, Medicaid and now Obamacare (the health
care trio) and Social Security? Social Security is the easiest to solve. So you
get a sense of the Democrats’ inclination to reform entitlements when Dick
Durbin, the Senate Democrats’ No. 2, says Social Security is off the table
because it “does not add a penny to our deficit.”
This is absurd. In
2012, Social Security adds $165 billion to the deficit. Democrats pretend that
Social Security is covered through 2033 by its trust fund. Except that the trust
fund is a fiction, a mere “bookkeeping” device, as the OMB itself has written.
The trust fund’s IOUs “do not consist of real economic assets that can be drawn
down in the future to fund benefits.” Future benefits “will have to be financed
by raising taxes, borrowing from the public, or reducing benefits or other
And draining the Treasury, as 10,000 baby boomers retire
every day. Yet that’s off the table. And on Wednesday, the president threw down
the gauntlet by demanding tax hikes now – with spending cuts to come next year.
Meaning, until after Republicans have fallen on their swords, given up the tax
issue and forfeited their political leverage.
Ronald Reagan once fell for
a “tax now, cut later” deal that he later deeply regretted.
Dems got the
tax; he never got the cuts.
Obama’s audacious new gambit is not a serious
proposal to solve our fiscal problems. It’s a raw partisan maneuver meant to
neuter the Republicans by getting them to cave on their signature issue as the
hold-the-line party on taxes.
The objective is to ignite exactly the kind
of internecine warfare on taxes now going on among Republicans. And to bury
I am not now, nor have ever been, a Norquistian. I don’t
believe the current level of taxation is divinely ordained. Nor do I believe in
pledges of any kind. But Norquist is the only guy in town to consistently resist
the tax-and-spend Democrats’ stampede for ever higher taxes to fund ever more
The hunt for Norquist’s scalp is a key part of the
larger partisan project to make the Republicans do a George H.W. Bush and renege
on their heretofore firm stand on taxes. Bush never recovered.
the Republicans playing along? Because it is assumed that Obama has the upper
hand. Unless Republicans acquiesce and get the best deal they can right now, tax
rates will rise across the board on January 1, and the GOP will be left without
any bargaining chips.
But what about Obama? If we all cliff dive, he gets
to preside over yet another recession.
It will wreck his second term.
Sure Republicans will get blamed. But Obama is never running again. He cares
about his legacy. You think he wants a second term with a doubledip recession, 9
percent unemployment and a totally gridlocked Congress? Republicans have to stop
playing as if they have no cards.
Obama is claiming an electoral mandate
to raise taxes on the top 2 percent. Perhaps, but remember those incessant
campaign ads promising a return to the economic nirvana of the Clinton years?
Well, George W. Bush cut rates across the board, not just for the top 2 percent.
Going back to the Clinton rates means middle-class tax hikes that yield four
times the revenue that you get from just the rich.
So give Obama the full
Clinton. Let him live with that. And with what also lies on the other side of
the cliff: 28 million Americans newly subject to the ruinous alternative minimum
Republicans must stop acting like supplicants.
If Obama so
loves those Clinton rates, Republicans should say: Then go over the cliff and
have them all.
And add: But if you want a Grand Bargain, then deal. If we
give way on taxes, we want, in return, serious discretionary cuts, clearly
spelled-out entitlement cuts and real tax reform.
Otherwise, strap on
your parachute, Mr.
President. We’ll ride down together.
Krauthammer’s email address is letters@ charleskrauthammer.com.
The Washington Post Writers Group