Showing posts with label KUTTNER ROBERT. Show all posts
Showing posts with label KUTTNER ROBERT. Show all posts

November 26, 2012

THE FISCAL CLIFF AND THE FISCAL MYTH




Grover Norquist
WASH. POST:

Three big-name Republicans broke with Grover Norquist over the holiday weekend, saying they won’t be bound by their Norquist-sponsored pledges to oppose any and all tax increases.

The moves by Sens. Lindsey Graham (S.C.) and Saxby Chambliss (Ga.) and Rep. Peter King (N.Y.) represent the opening steps of a delicate dance for the GOP — and one that could come to define the just-begun talks over the looming “fiscal cliff.” The question from here is whether this represents a simple trial balloon or the beginning of a movement in which a large segment of the GOP embraces a tax increase as an unhappy reality.

If that were to occur, it would both mark a significant shift in party orthodoxy and also threaten to make the tea party primaries of 2010 and 2012 seem tame.Twenty years ago, George H.W. Bush saw his approval ratings plummet and Republicans lost seats in Congress in the 1990 midterms after Bush went back on his anti-tax pledge (“Read my lips: No new taxes”). By the end of 1992, Bush had lost reelection.

Today, congressional Republicans have their own pledge and are inching toward breaching it, despite knowing very well that they could pay an electoral price.Republicans in Congress have seen a procession of conservative and tea party candidates upset more moderate establishment candidates (including incumbents) in primaries in recent years. And many of them lost in large part because of one vote — for the 2008 Troubled Asset Relief Program (TARP) bailout.

If you don’t think Republican incumbents fear for their political lives by voting for a tax increase, you don’t know members of Congress. Even as the vast majority of Republicans who supported TARP didn’t face tough primaries in recent years and only a handful lost, the fate of the ones who did will be on the mind of anybody who votes for a tax increase — as will Bush’s demise.

“‘Read my lips’ is still an iconic phrase for breaking your word on taxes,” said GOP strategist Dan Hazelwood. “I suspect it will be widely quoted in 2013-14.”Despite that very real threat, Republicans have been hinting for a while now that they may accept some revenue increases — whether through tax hikes or closing tax loopholes — to avoid the drastic cuts that would be triggered by sequestration.

Whether Republicans vote for tax increases or closing loopholes, if those changes aren’t offset by other tax cuts, the package will be in violation of Norquist’s Americans for Tax Reform pledge.
Norquist, for his part, doesn’t see the GOP deserting his pledge en masse. He noted that Graham has made similar comments before and only said he would abandon the pledge if it was accompanied by big entitlement reforms, which Democrats will be hard-pressed to embrace.

“I don’t think between now and 2014 that either the South Carolina senator or the Georgia senator will vote for a tax increase,” Norquist predicted in an interview with The Fix. “I am pleased at how the modern Republican Party and the members of Congress are hanging together in opposition to being TARPed again.”

What seems to be missing so far is a big public threat from the tea party and groups like Norquist’s to support primary challenges against any member who votes for a tax increase. So far, Norquist and conservative groups haven’t been willing to go there.

Most Republican strategists suggest the Norquists of the world and the tea party groups might be able to stomach a deal that includes tax increases, as long as the rest of the deal is seen as a good one — that is, that it contains real spending cuts and other conservative-friendly reforms.

“Conservatives have seen this movie before where we buy into higher taxes in return for spending cuts, only to have the cuts never materialize and find ourselves years later dealing with higher deficits and debt,” said one GOP strategist, granted anonymity to discuss strategy. “I can’t see us allowing Lucy to pull the football again.”

For the Republican Party, though, it will be very difficult to sell its anti-tax base on even a good deal that includes tax increases.This is a Republican Party, after all, whose presidential candidates all stood on a debate stage last year and said that they would reject a deal that includes $10 in spending cuts for every $1 in tax increases.

-----------------------------------------------------------------------------------------------------------

Obama Looks for Support on Taxes

Now if only the 99 percent would show up. White House aides are scrambling to animate Obama voters as the president prepares to square off with congressional Republicans over tax increases for the wealthiest Americans. Supporters are being asked to record YouTube videos of themselves arguing for tax hikes on the most well-off of the well-to-do, and emails explaining the president’s position were sent to activists in the past week. It’s all an attempt to kick the Obama campaign machine into gear—a strategy that mostly did not carry through in the president’s first term.
November 26, 2012 6:33 AM

--------------------------------------------------------------------------------------------------------

HUFFINGTON POST        Co-founder and co-editor, 'The American Prospect'

The Fiscal Myth

As President Obama gets closer to making his deal with the Republicans on the budget, the most important thing to keep in mind is that the fiscal cliff is an artificially contrived trap. Were it not for the two Bush wars and the two Bush tax cuts and the House Republican games of brinksmanship with the routine extension of the debt ceiling, there would be no "fiscal cliff." Rather, there would be a normal, relatively short-term increase in the deficit resulting from a deep recession and the drop in government revenues that it produces. When the economy recovered, the deficit would return to sustainable levels. In the meantime, these deficits are necessary and useful to maintain public spending as a tonic to the economy.