Tag Archives: debt

GOP’s counter-offer in Fiscal Cliff Talks puts Obama in difficult position

After the ridiculous proposal put forth by the Obama administration concerning the so-called fiscal cliff, the Republicans returned fire with a proposal of their own.

In it, will be a proposed $800 billion in additional revenue – about half of what the president wants – and more substantive reforms to entitlement spending, although the GOP was careful not to go after any of the left’s sacred calves.

Democrats have been very clear that they would not sign any fiscal cliff policy that doesn’t increase rates on top earners, but there’s no clear evidence to support why that would be any different than other kinds of revenue outside of the fact that the left wants to punish success.

In the plan is also about $1.2 trillion in cuts including deeper cuts to Medicare than the president proposed and a change to how Social Security is calculated.

As the Business Insider points out, the plan is a legitimate compromise because the tax loop holes would disproportionately affect the wealthiest Americans, but also would give the GOP bigger cuts.

Not only is it a good sign for the negotiations given that the Republicans seemed to have backed off a more hard-line approach, or at least the appearance of one, but this plan will make it much harder for President Obama to stand firm on his insistence on raising taxes.

John Boehner and the Republicans have met President Obama exactly halfway on new revenues and the tax reform will impact top earners just like the Democrats want. The cuts to Medicare aren’t new, in fact, they’re part of the plan the White House has already outlined, the GOP just wants bigger cuts.

By approaching this from a more bi-partisan prospective – the framework is based on Democrat Erksine Bowles’ plan – Boehner has changed the playing field for the discussion.

The GOP has made it clear that they will not negotiate from the absurd position the Obama administration has taken to begin these discussions. By offering a legitimate counter to the president’s plan, Obama and the Democrats must now choose between looking like intransigent tax mongers or agreeing to change the game plan to the Republican framework.

But by giving the Republican framework a basis in a plan put forward by a Democrat, the latter is not quite as bitter a pill to swallow.

This is a rare moment, particularly in recent memory for the GOP, that the strategy and the policy are equally laudable. Hopefully it means a deal gets done, regardless of who gets to take the credit.

There is a chance, though, that it could backfire and incense the President along with his Democratic allies. Feeling cornered, the President could hold firm to his demands and allow a deal to go by the wayside until the sequester hits and politicians grow desperate allowing him to swoop in and appear the great bargainer.

For that to happen though, he’ll have to risk appearing uncompromising to start, something he’s accused the GOP of being for years. It seems more likely this will incite a brokered agreement that allows the left to cheer new revenues thanks to more tax revenue from the rich and the right to applaud austerity and entitlement reforms.

It’s a rare chance to have a political win-win.

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Obama budget highlights lack of fiscal accountability, empty promises

Obama’s budget is a joke, not literally, but it’s closer than you might think.

When USA Today (who stole my lead) starts a column on the President’s budget noting that no one expects it to become law, you know there is a serious problem with the political landscape of our country.

A President, as a leader, is tasked with setting the policy agenda in the country. It’s not his job to make laws, that responsibility is Congress’, but it is the president’s job to shape the direction of policy during his tenure.

In 2008, Candidate Obama said he would cut the deficit in half by the end of his first term. More than three years later, soon-to-be-former President Obama is the first president ever to run a trillion dollar deficit in three straight years.

You know how much money his new budget is expected save? $4 trillion according to his numbers.

That won’t even cover the deficits incurred by his administration and the budget proposal will save that money over the next 10 years.

I’ll repeat that.

Barack Obama wants to save $4 trillion over the next 10 years when he’s run up nearly $4 trillion in deficit in the last three years.

Furthermore, Obama knows, in no uncertain terms, this budget has no chance of passing the Senate, much less the Republican-controlled House. Not in an election year when Democratic politicians will be concerned about sticking their political necks out for an unpopular president.

Let’s review: Barack Obama proposed a budget he knows won’t pass, that would do nothing to promote change in government debts or deficits.

If you’re going to propose a budget you know won’t pass, why not go big? This budget, according to a White House Official, has $2.50 in cuts for every $1 in new taxes.

That’s a decent ratio, but why not $5? Or why not, as a liberal, jack taxes way up on the rich?

But Obama knows that he can’t win the debt and deficit argument. He has no intention of doing anything to fix government spending, the entitlements which drive debt, or a government system that allows the Senate to go three years without passing a budget (despite  having a constitutional obligation to do so).

Paul Ryan, who already has the support of Mitt Romney, Rick Santorum and Newt Gingrich (Well…after Gingrich hated it, then liked it, then hated it, then liked it again), is planning to offer a counter-budget similar to the one the House already passed.

Expect national GOP leaders to be in on the planning given the likelihood a Republican Presidential nominee will have to champion Ryan’s budget against Obama.

Fortunately, Ryan’s budget (as long as he avoids some of those Medicare cuts that the left can twist and lie about) was bold and innovative the last time around and I would expect it to again garner broad support among conservatives.

In presenting today’s sacrificial lamb of a budget, Obama has shown just how unfulfilled his promises are. His lack of fiscal accountability is one of the cornerstones of his presidency. The GOP has to win on this issue and already holds the upper hand.

If it can win the debt and deficit argument convincingly, it will open up the lanes even further for a Republican to take control of spending from an even more powerful perch than leading the House budget committee: the oval office.

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