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article imageGOP's new fiscal cliff proposal: Permanent tax cuts for top 2%?

article:338925:14::0
By Can Tran     Dec 12, 2012 in Politics
Washington - The House Republicans, led by House Speaker John Boehner of Ohio, seemingly gave their fiscal cliff proposal: permanent tax cuts for the top 2%. However, it comes to question if they're being serious or not.

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In terms of the fiscal cliff battle, both sides are trying to come up with a solution. While there are plenty of solutions out there, offered by different parties (political and non-political), Republicans and Democrats are stuck at this spike in the road. This spike in the road is this: the top 2% of income earners. United States President Barack Obama and other Democrats are calling for an increase of taxes on them while House Speaker John Boehner of Ohio and other Republicans don't want the increase for the top 2%. However, the ground is shaky on the side of the Republicans, as most of the cards look to be in the hands of President Obama. At the same time, Republicans want cuts in entitlement programs.
One of the main factors is Grover Norquist who is the president of Americans for Tax Reform. He is perhaps the patriarch of anti-tax crusaders. As Norquist and his group align with the GOP, he has managed to keep the GOP in line by having members of office sign this pledge. While there is a growing number of people speaking out against Norquist, he still stands firm. He believes that the anti-tax pledge will still stand.
Norquist, writing an article for Human Events, said that Obama has “overestimated his mandate.” He said that Obama is fighting for power and not for the economy. Norquist is saying that Obama is using the issue to get more government spending and to hurt the Republican Party.
Former Democratic Governor Ed Rendell of Pennsylvania, who is the co-chairman of Building America's Future, weighed in on Norquist. In regards to Norquist, Rendell said that nobody ever voted for him. Furthermore, he compared Norquist to the Wizard of Oz and said he needs to go “pound on some sand.”
In an op-ed on Morning Call, David Bullock says that Norquist is getting in way of democracy.
On PBS, former GOP Representative Mickey Edwards of Oklahoma criticized the anti-tax pledge. Edwards said that this pledge is “not a hallmark of conservatism.” To Edwards, this idea of the anti-tax lacked any adult maturity. He said that both parties were responsible for the debt. Also, suggested that Norquist is still in “arrested development.”
GOP Representative-elect Ted Yoho of Florida, who ran for the 3rd congressional district, is one of the people that didn't sign Norquist's anti-tax pledge. When speaking on NewsHour, Yoho said that signing a pledge isn't going to do something to solve the problems. He said that signing the pledge means you're “handcuffing yourself.”
Other Republicans that signed the pledge long ago, are having second thoughts.
In Washington DC, a coalition of very wealthy progressives gave their idea for increasing revenue. Such members of the coalition included Warren Buffet, George Soros, and former US President Jimmy Carter. This coalition suggested the the idea of a substantial estate tax. So far, this idea is supported by the Tax Policy Center which said that by raising the estate tax by 10% could add $250+ billion a year. The Congressional Budget Office said that raising the rates on the top 2% would produce $100 billion per year.
If both ideas were combined, it would be over $350 billion per year. However, it is unknown how the estate tax would fly. Again, there's still the situation of the anti-tax pledge. By signing the pledge, you agree not to raise any taxes. That can also be extended to estate taxes.
With this respect, Norquist is engaged in another battle. This time, the battle is against a proposed increase on Virginia's gas tax. Norquist said that the increase in the tax would do nothing but kill jobs in the end.
Back to the fiscal cliff, many people are having their say. Mike Duke, the CEO of Walmart said that the fiscal cliff issue is going to affect shoppers.
Fed Chairman Ben Bernanke said that if the economy goes over the cliff, there's nothing the Federal Reserve can do.
Wall Street Journal reports that now corporate taxes will be brought to the table. So far, the idea of corporate taxes hasn't been brought into the issue until just recently. The main focus has been on individual taxes thus it goes back to the issue of tax rates for the top 2% of income earners. However, no specifics have been given on corporate taxes.
But, the idea is split between both parties.
In a Politico article, in a private talk between Boehner and Obama, Boehner said that he was open to new tax revenues. However, Boehner wants the White House to support cuts in entitlement programs in return.
GOP Senator John Cornyn of Texas said that the GOP should focus on areas where it has more leverage.
These are the obstacles that keep both parties from reaching an agreement on how to deal with the fiscal cliff and come up with a solution. It shows that both parties are sticking to their guns on the issue. Still, the biggest issue seems to revolve around the wealthiest 2% of Americans.
GOP Representative Tom Cole of Oklahoma, one of Boehner's lieutenants, said that Boehner can get a majority for any deal he tells them to. Cole said that Obama was being delusional in thinking that there will be enough Republicans to break away from Boehner. He said that Boehner will get the support behind him regardless.
While it seems that the GOP is on shaky ground, Cole said that Boehner is standing stronger than ever as House Speaker.
It seems that the talks of the fiscal cliff will more than likely go through the Christmas holidays as CBS News reports. From what the report learned, House Republicans were instructed to not make any plans for Christmas. In short, it seems that members of the House GOP may very well have to stay in Washington DC for the holidays.
House Majority Leader Eric Cantor of Virginia said that they will stay there til Christmas Eve up until the New Year if they have to.
The question is this: Will the Democrats also decide to stay through Christmas Eve up until the New Year? So far, Democratic House Minority Leader Nancy Pelosi of California had some things to say about the GOP offers.
Democratic Senate Majority Leader Harry Reid, in regards to the fiscal cliff, said that the GOP is treating this as a card game; but, not playing by the rules.
The House GOP, led by Boehner, seemingly proposes that all Bush-era tax cuts for the wealthy be permanent. According to Boehner and other House Republicans, they believe that they haven't been offered a serious deal by the White House. In response, they offer that all tax cuts be permanent. That includes tax cuts for the top 2% of income earners. This is their response to what they think of Obama being “unreasonable.”
However, there is the question on how this idea will be interpreted. This brings up the issue on the 2%, spending cuts, and entitlement reform.
But, there is evidence to suggest that Boehner and the House Republicans didn't mean it literally. In that respect, it shows that the House Republicans don't like Obama's offer and are not willing to yield. The question is this: Is this new fiscal cliff actually real or not?
As reported by CNN, confirmed by other sources, a Democratic source believes that Boehner demands that tax cuts remain permanent for everybody. On top of that, the aspect of the counter counter-offer has been made on paper according to that source.
In regards to entitlement reform, liberals vow to fight if the Medicare age is increased. This is due to the possibility of Obama accepting that as a possibility to reach an agreement with the GOP on the fiscal cliff deal.
Boehner said that Obama is doing the “slow-walk” on this process.
Again, going back to the top 2%, GOP Senator Lindsey Graham of South Carolina said that Obama will be in for “one hell of a fight” come 2013. This is if Obama keeps pressing for his plans to raise taxes for the top 2% without agreeing to GOP demands. Graham said that without entitlement reforms, the US will end up like Greece.
Democratic Representative Chris Van Hollen of Maryland said that Boehner's stalling on the deal because he's focused more on making sure he remains Speaker of the House and get more flexibility after re-election. Elections for Speaker of the House take place on January 3. Van Hollen says that Boehner's waiting it out until then.
This could blow up in the faces of the House Republicans including Boehner.
According to a new Wall Street Journal/NBC News poll, a very large amount of Americans want both President Obama and Congress to come up with a compromise.
A new ABC News/Washington Post poll shows that 49% approve of Obama's job in the fiscal talks compared to the 25% that approve of Boehner's job in the fiscal talks.
A new Fox News poll says that a majority of Americans feel that spending cuts are necessary.
A McClatchy-Marist poll shows that a majority of Americans want to raise taxes on the wealthy while leaving alone entitlement cuts.
Politico reports on the ABC News/Washington Post poll which says that 54% percent disapprove of Boehner's job in the talks. However, it does point out that 51% disapprove of Obama's job in the talks at the same time. It further points out that a little over half the moderates approve of Obama's handling of the talks.
In an article by CBS New York, families are weighing in on the fiscal cliff issue. They feel that Obama and Congress should understand the meaning of the word “compromise.”
With regards to Republicans that identify themselves with the Tea Party Movement, there is a growing number that seems to gravitate toward a compromise. This is according to a recent CNN article. When talking to CNN, GOP Senator Ron Johnson of Wisconsin said that at some time, they have to look at reality. He said that the GOP has no power in the talks.
The article reports that Tea Party members feel they are being punished for sticking to their guns on taxes and spending by the mainstream GOP establishment. They feel that the GOP House leaders are punishing them. According to GOP Representative Tim Huelskamp of Kansas, who got booted from a committee recently, says that the GOP House leadership has a “secret scorecard.”
It seems that the Tea Party Movement's role as a factor in the talks is shrinking.
With everything said, the fiscal cliff talks continue to become a political game of chicken. The question is: which car is going to swerve off the side first? There are various movie analogies that can be used in comparison to the standoff between Republicans and Democrats. Whatever happens will inevitably affect the 2014 US Election cycle.
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