fiscal cliff

House GOP conference race heating up as Boehner tries to deal


Elections for House Republican leadership are heating up, and it has the potential for embarrassment for Speaker John Boehner. Yesterday, BuzzFeed reported that Rep. Tom Price (R-GA) turned down an offer from Boehner for him to back out of his bid for chairman of the House Republican Conference, a nod to his preferred pick, Rep. Cathy McMorris Rogers (R-WA):

According to multiple sources familiar with the situation, Boehner approached the Georgia Republican with the offer hoping to circumvent an ugly fight between Price and Rep. Cathy McMorris Rodgers over chairmanship of the House Republican Conference.

McMorris Rodgers, a key surrogate for Mitt Romney’s failed presidential bid, is favored by leadership. But Price has the backing of conservatives both within the conference and the broader movement, and his bid has threatened to turn the race ugly.

According to these sources, Boehner offered to make Price chairman of the Elected Leadership Council, the group of GOP leaders that runs the party in the House. The chairmanship carries prestige, but is not elected and is largely ceremonial since Boehner is in charge of the party.

But Boehner’s proposal came with a catch — Price would have to swear loyalty to leadership and promise not to break with them over the next two years.

Price, a doctor and former chairman of the Republican Study Committee, has been fairly consistent in pushing fiscally conservative principles in the House. He was one of the fiercest opponents of ObamaCare and has been known to vote against leadership from time to time.

Washington, we have a spending problem

Barack Obama

The debate over the “fiscal cliff,” particularly the tax hike for higher-income earners being push by President Barack Obama, is one that is based on an entirely false premise. The argument from Obama and Senate Democrats is that these taxpayers need to pay more to help bring the budget back to a sustainable path. However, the Wall Street Journal explains that tax revenue has been climbing and the real issue is that spending has gotten out of control under Obama:

The nearby table lays out the ugly details. The feds rolled up another $1.1 trillion deficit for the year that ended September 30, which was the biggest deficit since World War II, except for each of the previous three years. President Obama can now proudly claim the four largest deficits in modern history. As a share of GDP, the deficit fell to 7% last year, which was still above any single year of the Reagan Presidency, or any other year since Truman worked in the Oval Office.

Tax revenue kept climbing, up 6.4% for the year overall, and at $2.45 trillion it is now close to the historic high it reached in fiscal 2007 before the recession hit. Mr. Obama won’t want you to know this, but this revenue increase is occurring under the Bush tax rates that he so desperately wants to raise in the name of getting what he says is merely “a little more in taxes.” Individual income tax payments are now up $233 billion over the last two years, or 26%.
Now let’s look at outlays, which declined a bit in 2012. That small miracle was achieved thanks to a 4% fall in defense spending, a 24% fall in jobless benefits, and an 8.9% decline in Medicaid spending.

Harry Reid ready to raise the debt ceiling to $18.794 trillion

Harry Reid

While the fight over the “fiscal cliff” is getting the attention of the media right now, the Treasury Department wants another increase in the debt ceiling and Senate Majority Leader Harry Reid (D-NV) is prepared to give it to them, apparently with no questions asked:

Senate Majority Leader Harry Reid (D-Nev.) said on Wednesday that if the $16.394 trillion current legal limit on the federal government’s debt must be raised in the next few months by another $2.4 trillion, “We’ll raise it.”

That would set the debt limit at $18.794 trillion.

During a Capitol Hill press conference on Wednesday, asked: “Senator Reid, the Treasury Department said last week that we will hit the debt ceiling again near the end of the year. Are you prepared—will you support—”

“I think the debt ceiling will come after the first of the year,” Reid said. “But please everyone accept this: They tried it before—they, the Republicans.”

“They tried it before – ‘We’re going to shut down the government, and we’re not going to raise the debt ceiling,’” he said. “If they want to go through that again, fine.”

“But we’re not going to be held subject to something that was done as a matter of fact in all previous administrations,” Reid said. then asked, “But will you support raising it by another $2.4 trillion?”

“If it has to be raised, we’ll raise it,” he said.

Boehner urges unity from House Republicans in “fiscal cliff” talks


Since Wednesday, House Speaker John Boehner has been urging President Barack Obama to take the lead on the “fiscal cliff,” a combination of tax hikes and spending cuts set to take effect next year, and has hinted that he’s open to tax reform that would raise revenues while promoting growth. Obama, however, has been pushing a tax hike on higher-income earners, which is a non-starter in the House.

Boehner has also spoken to members of his caucus, telling them that they can’t affford to deal with another fiscal showdown with President Obama:

On a conference call with House Republicans a day after the party’s electoral battering last week, Speaker John A. Boehner dished out some bitter medicine, and for the first time in the 112th Congress, most members took their dose.

Their party lost, badly, Mr. Boehner said, and while Republicans would still control the House and would continue to staunchly oppose tax rate increases as Congress grapples with the impending fiscal battle, they had to avoid the nasty showdowns that marked so much of the last two years.

Members on the call, subdued and dark, murmured words of support — even a few who had been a thorn in the speaker’s side for much of this Congress.

It was a striking contrast to a similar call last year, when Mr. Boehner tried to persuade members to compromise with Democrats on a deal to extend a temporary cut in payroll taxes, only to have them loudly revolt.

On John Boehner, the fiscal cliff, and tax reform

John Boehner

Yesterday, I criticized House Speaker John Boehner for openly discussing the idea of raising tax revenue are part of the “fiscal cliff” talks. This caused some of my conservative friends to come back at me on Twitter because they noted that pro-growth tax policies raise revenue, but it’s not a tax hike.

Look, I don’t disagree at all on that. What I was trying to say, and I probably didn’t explain it well enough, was that Boehner is negoiating from a point of weakness because of the election and is more likely to make a bad deal. During the debt ceiling debate, Boehner was willing to close loopholes that would have raised some $800 billion in additional tax revenue. President Obama wanted more in revenue, which caused Boehner to back down.

Boehner wants a pro-growth tax policy. That’s great, so do I. Let’s close all the loopholes — no more tax breaks or tax credits — and use that revenue to lower overall tax rates. That’s exactly what I want. Unfortunately, we’re not going to get it right now, and I think that’s the point my conservative friends are missing. Obama and Senate Democrats aren’t interested in economic growth. They’re interested in class warfare, which they think helped them win the election.

Ron Paul: We are already over the fiscal cliff

Ron Paul

As House Speaker John Boehner looks to make a deal on taxes and spending with President Obama and Senate Democrats, Rep. Ron Paul (R-TX), who is nearing the end of his congressional career, explained yesterday that the United States is already over the so-called “fiscal cliff”:

Rep. Ron Paul (R-Texas) warned Thursday that House leaders lacked “credibility” on the looming negotiations over tax rates and budget cuts, arguing that his colleagues were refusing to acknowledge “the truth … that we are broke.”

“I do not think I have heard the answer,” Paul told Bloomberg TV. “They talk about this fiscal cliff, but in my mind I work with the assumption we are already over the cliff, we’re just wondering how we’re going to land … it is unsolvable because you have to cut spending.”

Paul also noted that there is opportunity to form a coalition between “progressives and “conservative libertarians” to get the nation back on sustainable fiscal path through tax reform and spending cuts.

To Paul’s larger point on the fiscal cliff, he’s right. Anything we do is delaying the inevitable. House Republicans are not going the kind of tax reform we want (more on that in another post later), so dealing with congressional Democrats seems kind of pointless other than to give an appearance that they’re “doing something.”

Tax reform is just rearranging the deck chairs on the Titanic unless House Republicans back down from their incredibly stubborn resistance to cut defense spending and manage to get substantive entitlement reform.

Grover Norquist on the Threat of the Fiscal Cliff

See Video

Obama ready to send the United States over the fiscal cliff

It appears that President Barack Obama is ready to send the United States over the “fiscal cliff.” The White House has said that that Obama would veto any tax deal that comes out of Congress that doesn’t raise taxes on higher-income earners:

The White House denies its position the fiscal cliff has changed in the wake of a Washington Post story Thursday that reported President Barack Obama was ready to play hardball with Republicans.

“The president has long made clear that he would veto an extension of tax cuts for the top 2 percent of Americans, the wealthiest Americans,” White House press secretary Jay Carney told reporters traveling with Obama on Thursday. “That has been his position, as you know, for a very long time.”
Carney said that the Republican-controlled House of Representatives could act to end some of that uncertainty right now.

“If there is concern about what we can do right now to address the so-called fiscal cliff, the House ought to follow the Senate and pass an extension of tax cuts for 98 percent of the American people, the middle class,” Carney said.

Big Bird is apparently America’s most pressing issue

Big Bird

That’s right, folks. Forget about the “fiscal cliff,” budget deficits and the national debt. The terrorist attack on the United States consulate in Benghazi, Libya, which took the lives of four Americans, including Ambassador Christopher Stevens, is also nothing about which to be concerned. According to President Obama’s campaign, the biggest, most pressing issue facing the United States is Big Bird.

As Ron noted yesterday, during last week’s debate, Mitt Romney said that he was going to stop subsidizing PBS, which airs the childrens show, Sesame Street. President Obama’s campaign, needing a distraction from a bad debate performance and foreign policy failures, poked fun at Romney’s in a snarky ad, which has received close to 1.5 million views in a day:

Some of my friends who know I heavily follow politics ask me about the presidential race, saying that I “must love this stuff.” Actually, no, and the reason why are memes like this. It’s annoying and a distraction. That’s not to say that it’s not a smart move from President Obama’s campaign when it all comes down to it, but the ad just contributes to the continuing absurdity of American politics, which is coming from both the Left and the Right. We’re all dumber because of it.

Some Democrats getting nervous about tax hikes?

The issue of the fiscal cliff may have taken a backseat thanks to the party conventions and the distractions that have popped up along the campaign, but it looks like President Barack Obama’s tax plan, which would raise tax rates on families making more than $250,000 may be losing some steam among Senate Democrats:

President Barack Obama has made his tax position abundantly clear: Let the tax rates for the wealthiest Americans expire at year’s end.

But on Capitol Hill, some in his own party are ready to make a deal.

Senate Majority Whip Dick Durbin of Illinois is floating a six-month extension of current rates combined with budget cuts so lawmakers have time to reach a grand bargain deal early next year. Sen. Claire McCaskill of Missouri and other Democrats are open to a temporary extension of the top individual tax rate if Republicans agree to raise revenue in other parts of the Tax Code. Some liberals, like New Jersey Rep. Bill Pascrell, aren’t ruling out extending the current rates if the GOP agrees to sweeteners like a patch on the alternative minimum tax or extending dozens of lapsed business tax breaks.

And Florida Sen. Bill Nelson, along with several of his colleagues, won’t take any option off the table, knowing full well that high-stakes talks over taxes could result in any number of outcomes.

“I’ll certainly consider it,” Nelson said when asked about a short-term extension of all the Bush-era rates. “But I’ll consider anything.”

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