Triangulation Redux?
In announcing his tax deal with Republican leaders the other day, President Obama managed simultaneously to express support for the package’s job-creating prospects and reiterate his perennial talking points in favor of increasing top marginal tax rates.
Meanwhile, Republicans coming off an election victory of historic proportions are settling for the status quo on tax rates, agreeing to raise taxes through a revival of the “death tax” and signing on to as much as $100 billion in additional federal spending for another unemployment extension plus additional stimulus items. Alarmingly, all of this is transpiring just a month before the arrival in Washington of new Tea Party Congressmen promising as a first step to cut $100 billion in federal discretionary spending. And over in the House, Democrats are working to prevent even the possibility of any cuts by sending up a continuing resolution to fund the government through the next 9-plus months of fiscal 2011 at bloated pre-blowout election funding levels.
How is it that President Obama is the one proposing a “middle class tax cut” while Republicans are signing on to a tax increase and even more federal spending? The danger here is that the man who brought us $2.7 trillion in deficit spending in just two years is preparing to make the case that he is the tax-cutter and the Republicans are the big spenders.
I am traveling in Europe this week and so may be missing something important here. Hence a question for Ricochet: Is this tax deal the best pro-growth deal we can hope for or are conservatives being rolled by the beginnings of Triangulation, the Sequel?
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Nov '10
Re: Triangulation Redux?
The Old GOP Guard is getting "rolled" by its own squishy, "go-along-to-get-along" instincts. For them, the enemy is not their Democratic chums in the House and Senate, but those naive, unreasonable hotheads in the Tea Party.
We lose.
Edited on Dec 8, 2010 at 10:02amSep '10
Re: Triangulation Redux?
Simpson-Bowles and Domenici-Rivlin notwithstanding, the only thing that is going to stop all this is the bond vigilantes. It's going to be terrible.
Jul '10
Re: Triangulation Redux?
So the worst Congress in history will leave without a budget for the current fiscal year, but instead 9.5 months of continuing resolution, on the exalted expectation that the incoming Congress (still mostly the same people, but with a very different leadership) will not perturb said arrangements, because it does not permit earmarks (but spends at silly, silly levels anyway).
So we trade a payroll tax reduction, which I believe just reduces pay withholdings without relieving income tax one iota, for a $100B to extend unemployment benefits we really weren't going to slash right off because there is the little matter of reversing the economic climate first. Worst spell of unemployment since the end of WWII. It is not just the perverse incentives. It is the regime now running in every direction at once and business doesn't know what nonsense to expect next out of a federal government that has become waaaaay too important a factor in the business climate.
Edited on Dec 8, 2010 at 10:44amMay '10
Re: Triangulation Redux?
The CR is a ceiling- subject to the limits of the budget, as soon as it is passed. Congress can change both the Authorization and the CR at any time.
The reality is that we do not have 292 TEA Party House reps or 67 TEA Party senators who can implement legislation over Obama's objection. If we are to be responsible, we need to do something other than throw tantrums over the current levels of spending. The budget year to watch is 2012. Set that CR at 2007 levels and watch the sparks fly.
And this is, on balance, a good deal, as you can tell by the caterwauling coming almost exclusively from the Left. Every smart rich guy has already set up trusts and foundations to own property and dole out cash to beneficiaries at the below-tax-trigger annual rates. The only ones who get screwed right now are the ones who own NFL teams and can't put the shares into creative trusts (as happened to John Cook, son of Jack Kent Cooke, who had to sell the Redskins to Snyder because of estate taxes).
Jul '10
Re: Triangulation Redux?
He is certainly not playing it that way. His presser yesterday was full of "woe is me" and "I had no choice" and "the Republicans held the American people hostage". I suppose he could spin things the way you suggest, but he's not off to a great start. He's too worried about placating his base in the left wing, than about trying to convince the heartland that he's seen the light.
Edited on Dec 8, 2010 at 12:22pmSep '10
Re: Triangulation Redux?
We had an election and nothing has changed. More spending with GOP aproval, more debt , more stimulus. I have an idea lets have another welfare program and call it unemployment insurance! Or has someone thought of that already?
Jul '10
Re: Triangulation Redux?
I think the Republicans cut as good a deal as they could get, under the circumstances.
We got the extension of lower tax rates. While the extension is "temporary", that's just nuance. We could have demanded a "permanent" deal, but the truth is no Congress can tie a subsequent Congress's hands on tax rates.
Yeah, the death tax deal is less than optimal, but you had to throw some bone to the class-envy Democrats.
As for unemployment benefits, does anyone really, really believe Congress would, under any circumstance, leave millions of Americans without some safety net? Call it unemployment insurance, call it welfare, call it food stamps, but the prospect of millions without any resources to meet their basic necessities is a prescription for anarchy.
Quit griping. For a minority party in a lame-duck session, the GOP achieved the most important objective - extension of existing income tax rates.
Re: Triangulation Redux?
Thank you, Tripedis Canis. I'm feeling better now that I know that the left is caterwauling a good deal more than the right.
Kenneth, I don't mind the unemployment extension per se, but I do question this latest violation of paygo. Can't the Dems find something--anything!--to cut? With that one quibble, given a certified non-squish like you is backing the deal, I am left feeling not just better but elated.
Edited on Dec 8, 2010 at 3:21pmJul '10
Re: Triangulation Redux?
George Savage: Thank you, Tripedis Canis. I'm feeling better now that I know that the left is caterwauling a good deal more than the right.
Kenneth, I don't mind the unemployment extension per se, but I do question this latest violation of paygo. Can't the Dems find something--anything!--to cut? With that one quibble, given a certified non-squish like you is backing the deal, I am left feeling not just better but elated. · Dec 8 at 3:03pm
Edited on Dec 08 at 03:21 pm
The "something else to cut" is going to have to wait for the 112th Congress. We got the main thing we wanted, which is pretty amazing, considering the ideological make-up of the lame-duck 111th.
Nov '10
Re: Triangulation Redux?
Kenneth and Duane are exactly right here. Remember the reason the GOP won is because the Dems overread their mandate, interpreting a call for a mild shift to the left as a call for a gigantic lurch to the left. We should not be demanding that the Republicans make the same mistake. Sure, the Ricochet community (including me) would probably like a huge lurch to the right, but that's not what the average voter wants. We have to recognize the constraints placed on Congress by reality, and in the real world this deal is about as good as we can possibly get at this point.