“I know no danger so dreadful and so probable as that of internal conflicts. And I know no remedy so likely to prevent it as the strengthening of the band which connects us.”- Thomas Jefferson, Representative from Virginia to Congress under the Articles of Confederation
If November 7th was a tough morning for conservatives and Republicans, January 2nd was downright cruel. Not only had the coldness of winter set in as a quick and sobering follow up to the close of the Christmas Season, but we awoke yet again to a victorious President Obama – a man one step closer to his ultimate goal of transforming the United States.
The end of the fiscal cliff’s drama only redeeming factor will be the public’s much due reprieve from the media chorus’ seemingly never-ending coverage. That ending, though, reaps new beginnings for the President, his congressional rivals, and the American people.
President Obama scored his first big post-election victory with Congress’ agreement to end the Bush Tax cuts for those families making over $450,000.00 ($400K for single filers). His much repeated campaign promise to raise taxes on the “millionaires and billionaires” who earn four hundred thousand dollars a year was finally fulfilled. Now we will see how Mr. Obama’s central plan for Americans going forward affects the economy.
But there is more.
The President has begun the second leg of his progressive agenda with the implementation of these tax hikes. He now hopes to extend that agenda’s reach. In his weekly address, the President stated he intends to urge Congress to close tax loopholes for wealthy filers and corporations as well- enacting Mr. Romney’s campaign plan to close tax loopholes in order to raise revenue, but in conjunction with higher tax rates.
In a departure from his formerly exhaustive pleas for a “balanced” approach to reduce the deficit through tax increases and spending restraint, the President and his party are now eager to tip the scales toward more taxes. This approach in the face of our yearly deficits and overall debt will prove woefully ineffective, save for the damage it can inflict on American families.
The Tax Payers Relief Act of 2012 was the highest tax rate increase on Americans in two decades. Seeking out new revenue would effectively raise taxes on the wealthiest Americans even further, from the new rate of 39.6% to somewhere around 41% or higher according to the Wall Street Journal- not including state and local taxes. What we are now seeing is the return of the far left agenda of high tax rates on the wealthy that were the status quo in the pre-Reagan era. And we can all remember the booming American economy of the 1970s.
And so we are at an impasse. The cliff circus divided the Republican Party- as always between moderates and conservatives- which was partially President Obama’s intention from the start. It was an uphill battle for Speaker Boehner after the election, facing a defiant President who had no intention of negotiating with such broad tax increases looming. It was an accurate calculation on the part of Mr. Obama, as the cliff deal came down to a decision between a tax increases on all filers or just the wealthiest Americans. Which way do you think public opinion would lean? The fact that the failure to renew the payroll tax holiday in the deal actually raised taxes on over 70% of Americans is mere noise in our current political culture. And whether or not the Republicans should have made the deal is a waste of time- the problem now is what can they do going forward to stop what seems to be a re-invigorated and determined President Barack Obama.
As I see it, the Republicans have three options in the coming debt ceiling drama:
1. The Repeat Scenario: Much like the “fiscal cliff” deal, the Republicans fracture even further over the debt ceiling increase moving toward the March deadline. Moderate Republicans ultimately side with Democrats and the President, handing the federal government a new lease on borrowing with no exchange in spending cuts for the future. This again will prevent substantive progress in relieving the nation of its burdensome debt, as well as increase the public’s disillusionment with the entire Washington establishment.
2. The Doomsday Scenario: Republicans band together and demand future cuts and restraint on spending in exchange for the debt ceiling hike. President Obama refuses to cave based on his and the national media’s intent to place all public blame on the Republican Party, and the government shuts down. A week of protest and phony press conferences ensue, featuring a condescending President Obama who blames the shut down on the ideologically uncompromising Republicans. These supposed ideologues then give into the hike without an exchange for cuts. Such a fiasco would render the party useless in congress as well as leave them to be demonized by the American public. The 2014 midterms are a slaughter, granting the President and his party full control of the executive and legislative branch.
3. The Best-case Scenario: I phrase this timidly as the current state of the Republican Party and its bargaining position is still a bad one. Undercut in the “fiscal cliff” deal by minority leader Senator McConnell, Vice-President Biden and the Senate Democrats, Speaker Boehner had no real chance at amending the bill, nor was there a reasonable scenario that would allow him to scrap the bill for a more “balanced approach” before January 1st.
But there is a silver lining. The debt ceiling deal can bring new hope to a party that has just been shellacked if it chooses to grab the bull by the horns. President Obama has vowed he would not cut a deal with congressional Republicans to increase the debt ceiling in exchange for a legislative structure to enact spending cuts. Let’s call his bluff. Take the case to the American people in full force before he does. Discuss the need for spending cuts in our bloated Federal budget. Discuss how there were no such cuts in the Tax Payer Relief Act. Discuss how this last-minute legislation has left our nation worse off in the new year; burdened by higher taxes with no reference point for spending cut progress going forward. Americans love a fair fight, so where is the Republican’s piece of the legislative pie? The President and his party finally got their vaunted tax increases. Now it’s the Republican’s turn: we need spending cuts. President Obama and Democrats went cliff diving without a scratch; don’t let them break the debt ceiling without hitting their heads.
Realistically, you can’t have scenario number 3 without risking scenario number 2. But these are serious times. Gumption and verve are needed to attain the level of success necessary to put our country on a better economic path. Republicans didn’t show much backbone in the 2012 election, nor did they band together in unity in the most recent negotiating debacle. They should surprise the President, and the people, by displaying both in the debt ceiling debate. Doing so will re-unite them and strengthen the one institution (the House) remaining that can halt the President’s dominant and ambitious progressive agenda. If they fail to do so, then the President’s second four years will feel much longer than his first.
– John P. Burns
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