Surprise, Surprise: Some In GOP Back Tax Hikes In Exchange For Cuts In Safety-Net Programs

Digby

Nobody who reads this blog will be the least bit surprised by this turn of events:

A growing chorus of Republicans is urging House leaders to abandon their staunch opposition to higher tax rates for the wealthy with the aim of clearing the way for a broad deal that would also rein in the cost of federal health and retirement programs.

With less than a month before the “fiscal cliff” deadline, President Obama remains adamant about allowing tax rates to rise for the wealthiest 2 percent of taxpayers. Without such a deal, he is “absolutely” ready to go over the cliff, Treasury Secretary Timothy F. Geithner said Wednesday on CNBC.

The Washington Post’s Chris Cillizza outlines the position of the White House in the fight over how to avoid the so-called fiscal cliff, the tax increases and spending cuts set to going into effect at the end of the year.

Many GOP centrists and some conservatives are calling on House Speaker John A. Boehner (R-Ohio) to concede on rates now, while he still has some leverage to demand something in return. Republicans are eager to win changes to fast-growing safety-net programs, such as raising the eligibility age for Medicare and applying a less-generous measure of inflation to Social Security benefits.

After Dec. 31, tax rates for most Americans, including the wealthy, are set to automatically rise, and this could cost Republicans a key bargaining chip in winning changes to entitlements.

“I and some others are advocating giving the president what he wants,” said Rep. Steven C. LaTourette (R-Ohio). But he stressed that this must be part of a package that slows federal borrowing and reduces the debt by $4 trillion to $5 trillion.

“Quite frankly, some people in this 2 percent who call me, they’re more worried about the fiscal cliff than about the rates going up a couple points. That has bigger risk for them,” said LaTourette, a close Boehner ally who is retiring in January.

Rep. Thomas J. Rooney (R-Fla.) added: “If there are truly real entitlement reforms that are going to preserve Social Security and Medicare for generations to come, it’s going to be very difficult for me to oppose” higher rates for the rich. [imagine that … ed]

An agreement to raise the top tax rate above the current 35 percent would mark a major concession for a Republican Party that has made opposition to higher tax rates a touchstone for more than two decades.

The step would come on top of what was already a significant compromise for the GOP: an offer earlier this week to increase tax revenue by $800 billion over the next decade. That offer involved generating new revenue by closing loopholes and ending deductions for top earners, not by increasing rates.

Now we’re getting down to brass tacks (tax?) Just how far are the Democrats willing to go on cuts once the Republicans say yes to the tax hikes? Since the only people even talking about the cuts have been Bernie Sanders and a few House progressives, we don’t really know.

So, reporters out there should be asking the White House:

Are you willing to go over the cliff if the Republicans agree to your demands for tax hikes but require major benefits cuts in return?

In my view, as regular readers know, the real problem has always been that the Republicans could easily decide to take yes for an answer on millionaire chump change in exchange for big cuts to “entitlements”. By making the tax cuts the hill they will die on, the Democrats have been setting themselves up for a severe backlash by the Villagers for being unreasonable in the face of GOP capitulation if they refuse to deal on that. Sure, they can say it’s “unbalanced” to ask for all these cuts, but they haven’t really been making that argument up to now so it’s not going to sound all that convincing. (And frankly, the Dems have already shown how far they are willing to go on that … and it’s really far.)

Maybe they don’t care about that and will go over the so-called cliff even if the Republican capitulate on taxes but make steep demands on cuts. I hope they do. But this was always the biggest risk of making the tax hikes the be all and end all so it will be a near thing if this happens and they manage to get out of it.

I’m still hoping for Tea Party intransigence on the tax hikes. Going over the cliff because the Republicans refuse to take yes for an answer has always been the best way out of this mess, at least in this first round. Keep those “entitlements” off the table in these fiscal cliff negotiations — it won’t end well.

And in any case, they’ll be back to try to destroy them another day. They never give up.

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