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In the Media

article imageOp-Ed: Mixed signals on fiscal cliff negotiations

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By Ken Hanly
Nov 30, 2012 in Politics
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Washington - While U.S. House Speaker John Boehner was optimistic that Republicans would be able to reach a deal with the Democrats and avoid the fiscal cliff austerity measures, at the same time, he said that negotiations are going "almost nowhere".
After the proposals of Treasury Secretary Timoth Geithner on Thursday, the fiscal cliff talks have not only turned testy, the Republicans seem to have dug in their heels and returned to their no increase in tax rates mantra, although they still support increasing revenue through tax reforms. Geithner sought a $1.6 billion tax increase up front and $50 billion more in stimulus spending as a part of any solution of the fiscal cliff. President Obama also wants an expansion of jobless benefits for one year and an extension of the payroll tax credit. Finally he wants a permanent increase in the debt ceiling.
After Geithner made the proposals House Speaker John Boehner was critical of them and said that "the White House has to get serious". Boehner added: "No substantive progress has been made between the White House and the House" in the two weeks since Obama welcomed congressional leaders at the White House."I was hopeful we'd see a specific plan for cutting spending." Nevertheless he said that he remained hopeful that the two sides could reach a deal before the fiscal cliff cuts and tax increase would kick in on January, 2013.
Boehner noted that many jobs are on the line and now was the time for adult leadership. Yet both sides seem to continue posturing. The Republicans are anxious to avoid the fiscal cliff because the automatic cuts would have a huge impact on the defense budget and would also increase tax rates on their rich donors. The huge tax increases and multi-billion stimulus package are both anathema to the Republicans. It is not surprising that the Republicans reacted negatively.
Of course Democrats countered that the holdup was the Republican refusal to countenance Obama's promise to raise taxes on the richest Americans or at least allow the Bush tax cuts to expire on that group at the end of the year. The Democrats are taking every opportunity to make political points and this is having the effect of causing Republicans to dig in their heels rather than moving forward. Just as some Republicans seemed to be moving towards accepting tax increases as being a way of getting the Democrats to accept deeper tax cuts, everything seems to be unraveling. Democrats seem to be taunting Republicans, making them look bad, hardly a recipe to reach a compromise. Press Secretary Carney said: "There can be no deal without rates on top earners going up. This should not be news to anyone on Capitol Hill. It is certainly not news to anyone in America who was not in a coma during the campaign season."
The Senate Republican leader, Mitch McConnelll was also pessimistic after he met Geithner. He said:"To date, the administration has remained focused on raising taxes and attending campaign-style events, with no specific plans to protect Medicare and Social Security or reduce our national debt in a meaningful way. And today, they took a step backward, moving away from consensus and significantly closer to the cliff."
Earlier, on Wednesday, House Speaker Boehner expressed optimism that a deal could be brokered to avoid the fiscal cliff. He said that Republicans were willing to raise revenues if the Democrats agreed to spending cuts. Boehner said:"I am optimistic that we can continue to work together to avert this crisis sooner rather than later. We (Republicans) put revenue on the table as long as it is accompanied by serious spending cuts to avert this crisis."
Notice tbat Boehner talks about revenue increases but not tax rate increases for the rich, avoiding any implicit support for Obama's position. This type of evasion will not serve the Republicans well and will simply encourage Obama to continue to gain political points by emphasizing that he will tax the rich and keep tax cuts for everyone else. Obama also stresses the fact that if a deal is not made taxes on everyone will rise next year, as he argues in the video below.
Boehner insisted that:"You're not going to grow the economy if you raise tax rates on the top two rates. We're willing to put revenue on the table, as long as we're not raising rates." This is precisely the formulation of the Republican position that allows Obama to go on as if the election campaign were still in full swing.
Many business executives are warning the government that the fiscal cliff must be avoided, and a deal is needed to provide investors with more security about the future. Perhaps behind the scenes serious negotiations are going on but at present the public face of the two parties is political posturing with little sign of compromise.
This opinion article was written by an independent writer. The opinions and views expressed herein are those of the author and are not necessarily intended to reflect those of DigitalJournal.com
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