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GOP Strategic Retreat? (It's Either 0bama's Way, Or The Highway) ^ | December 8, 2012 | Larry Kudlow

Posted on 12/08/2012 6:20:45 AM PST by Kaslin

Republicans are divided. President Obama won't budge. And more and more, it looks like the fiscal-cliff deadline of Dec. 31 will be missed.

It's now clear that Team Obama wants higher tax rates and revenue-raising tax-deduction caps to meet their $1.6 trillion revenue target. Spending cuts and entitlement reforms are vague to nonexistent. In fact, it could be that Obama not only rejects the across-the-board budget sequester, but that he actively seeks to raise spending, not cut it.

I guess it stands to reason that if you puff up his $800 billion revenue increase from last year, and double it to $1.6 trillion this year, the money will be spent. The government will grow larger.

All this should be unacceptable to the GOP.

Sen. Rand Paul, who may have the best idea, told me in an interview this week that he's prepared to pin the tail on Obama's tax-and-spend donkey. "In the Senate," Paul said, "I'm happy not to filibuster it, and I will announce tonight on your show that I will work with Harry Reid to let him pass his big old tax hike, with a simple majority, if that's what Harry Reid wants, because then they will become the party of high taxes, and they can own it."

Other conservatives in the Senate and House agree with Paul. And some House members are talking about a "doomsday" scenario, or what might be called a strategic retreat. Just vote present on the Democrats' tax bill to extend middle-class tax cuts and raise tax rates on income and investment.

A couple dozen other Republicans have signed a bipartisan letter suggesting flexibility on tax rates in return for some kind of entitlement reform -- perhaps moving the top rate from 36 percent to 37 or 38 percent, less than the 39.6 percent Clinton rate, and possibly raising the so-called rich people's threshold to $500,000 or $700,000 from $250,000. But with a vague and un-budging Team Obama, this sounds like a triumph of hope over experience.

The most valiant guy in this process is Speaker John Boehner. He's still trying to cut a deal that would extend all marginal tax rates, including for the upper brackets (he is absolutely determined to prevent an increase in top marginal tax rates, which would really damage the economy), in return for a cap on tax deductions. That would raise roughly $800 billion in revenues, hitting upper-end taxpayers but leaving the middle class alone.

It's like a halfway tax reform, since marginal rates would not be flattened. But it would do less harm to the economy because tax-rate incentives necessary for growth would not be damaged.

The Boehner plan has stalled. And some conservatives are criticizing the speaker for permitting any tax hikes at all. In an anemic recovery, transferring $800 billion in revenues from private hands to the government will do some damage.

Of course, Boehner is trying to leverage this for significant spending cuts and entitlement reforms. It's a worthy objective, but he's just not making headway.

Conservatives shouldn't be so hard on Boehner. He's trying to deal with post-election realities and sincerely believes voters want a compromise. Worth noting: Prominent conservative House leaders, like Eric Cantor, Kevin McCarthy and Paul Ryan, are standing behind Boehner.

On the other hand, senior House leadership aides are not happy with Senate Republican leader Mitch McConnell. Apparently, McConnell and Majority Leader Harry Reid are ready to do a two-stage deal if the Boehner-Obama talks collapse. The first stage would extend middle-class tax rates and somehow compromise on upper-end rates. Then a process would be set up to produce spending cuts to replace the sequester. But House aides regard this as a nonstarter -- one that could even undermine the Boehner-Obama talks.

Here's the really big principle in all this: Why raise taxes at all in the worst economic recovery going back to 1947? Tax hikes and larger government are economic deterrents.

Furthermore, the whole world is talking taxes rather than spending cuts. What happened to the $1.2 trillion sequester? And what happened to the idea of $4 of spending cuts for every $1 of tax revenues? Some scorekeepers believe Obama's plan raises taxes more than it cuts spending. Not exactly what Simpson-Bowles had in mind. Or even Ronald Reagan, who back in 1982 was promised 3-to-1 spending cuts over revenue increases. He didn't remotely get it.

As an old Reagan supply-sider who believes in the flat tax and strictly limited government, none of this makes sense in terms of promoting economic growth, jobs and prosperity. But the key tactical point is that all these machinations seem unlikely to meet the Dec. 31 deadline for tax extensions and sequester budget cuts.

That may not be the end of the world. But it shows how dysfunctional Washington remains.

TOPICS: Business/Economy; Editorial
KEYWORDS: fiscalcliff
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1 posted on 12/08/2012 6:20:52 AM PST by Kaslin
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To: Kaslin

If Barry’s freeloading 47% would pay THEIR “fair share” of taxes, the “government” wouldn’t have to steal more from those who are already being forced to subsidize most of the DemocRATS’ BIG “government”.

2 posted on 12/08/2012 6:25:37 AM PST by FlingWingFlyer (Don't tax me bro! Tax that guy over there!)
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To: Kaslin
The most valiant guy in this process is Speaker John Boehner.

Meadow muffins. Boehner is standard issue GOP-E, and has no relationship to anything conservative.


3 posted on 12/08/2012 6:25:37 AM PST by JRandomFreeper (Gone Galt)
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To: Kaslin

I kind of like Rand.

But only a Republican could be dumb enough to think that by going along with, rather than fighting, the Democrats’ tax hikes they make the Democrats, rather than all of them, ‘own’ the move.

4 posted on 12/08/2012 6:33:09 AM PST by 9YearLurker
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To: Kaslin
Cynic that I am, I am doubtful that the "they (the Dems) will own it" argument will stick. We just got done with an election where Obama was supposed to "own" the state of the economy. You saw what happened.

If anything, (recent) history has shown us that the "they will own it" argument is a dud. I'm afraid that people are engaged in a bit of wishful thinking.

/not a concern troll

5 posted on 12/08/2012 6:34:33 AM PST by 1rudeboy
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To: Kaslin
Please dear Lord, come quickly. I can't stand one more minute of this.

Will they, won't they?, every minute of every day, make it stop please.

They will do to us as they please anyway, and we are all Doomed to pay, while we watch them spend more and raise their own salaries as soon as possible.

Watch for the Salary increase as soon as some agreement is settled.

6 posted on 12/08/2012 6:34:56 AM PST by annieokie
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To: Kaslin

0bama is one of those people who HAS to get their way.

Having known a few of those, I can afford to steer clear. They tend to leave skid marks on your back.

Boehner needs to be a wolf pack leader. Not a sheep. Not a tiger. He needs a bloodthirsty pack of frigging wolves that he can fight off to be leader.

I don’t see it in him. He lost the killer instinct awhile ago.

Either a nice guy who is corrupted or too long in DC, he’s been had.

7 posted on 12/08/2012 6:37:28 AM PST by combat_boots (The Lion of Judah cometh. Hallelujah. Gloria Patri, Filio et Spiritui Sancto!)
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To: FlingWingFlyer

I think at this point it wouldn’t be enough. The most necessary part is truly cutting spending. That seems not to be a menu item in this conversation. Even then they would have to be very deep cuts which the Entitled Classes wouldn’t stand for, nor would the elderly. No matter how this plays out I dont see a good outcome. The only way out of this, that I see, is getting folks back to work in the private record numbers. There again the Entitled Classes wouldn’t be much up for this and the elderly mostly couldn’t. For sure Barry and his clan are thinking in other directions.

8 posted on 12/08/2012 6:38:43 AM PST by 556x45
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To: JRandomFreeper

Republicans and Conservative Democrats (if any):

It’s Christmas. Pack up the family and go home. Leave Washington. There is no honorable way to compromise with a Marxist. He is going to do what he wants to do, whether or not you agree and whether or not it is Constitutional. Leave now. Then, even the unbelievably stupid people who elected him will have to admit that he must take responsibility for whatever happens. Go home. Unplug the radio and TV and enjoy Christmas. We’re going to have to stop “enabling” this twisted President and let him descend until he hits bottom. With God’s help, we’ll pick up the pieces of our Republic when the people realize that they’ve been duped.

9 posted on 12/08/2012 6:39:29 AM PST by July4 (Remember the price paid for your freedom.)
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To: Kaslin

This plan will be twisted so that Barry can call it a huge bi-partisan victory.

10 posted on 12/08/2012 6:41:25 AM PST by SERKIT ("Blazing Saddles" explains it all.......)
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To: annieokie
I have something else to add to all this mess.

We as conservatives are always defending the RICH. We constantly protest against more taxes for them, as we know they are the ones that produce the jobs.

Ok, we understand job creation, BUT those same companies we defend, double cross us all when they go up to LOBBY Congress for their own interest, NOT OURS. Lobby for some Exaggerated $$$$ Contract that we have to pay for.

We taxpayers are simply stuck in the middle and hope we are lucky enough to catch a CRUMB from theie table to live on.

Having said all this, I am still for the JOB CREATOR.

11 posted on 12/08/2012 6:42:19 AM PST by annieokie
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To: 556x45

Bingo! I agree. I just heard that 74% of those “new jobs” the DemocRATS were so happy about yesterday were government jobs. That isn’t going to work.

12 posted on 12/08/2012 6:43:44 AM PST by FlingWingFlyer (Don't tax me bro! Tax that guy over there!)
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To: Kaslin

The fiscal cliff is precisely what Idi Obama wants. It his way to jack property using all his corruption and powers. This marxist pig is a thief at heart and nothing will stop him. We are no longer a free people and are no more to him than what mugabe’s people are to him.

13 posted on 12/08/2012 6:47:04 AM PST by Neoliberalnot (Marxism works well only with the uneducated and the unarmed.)
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To: Kaslin

There is the old saying, “If you can’t beat them, join them.” Well we can’t beat the democrats on the fiscal cliff and here is why. Our choices are to give in to the democrats or have everyone’s taxes go up and up by a lot. We can’t win this one.

Instead let’s join them.

Let us cut taxes on everyone under 250,000 and cut them even more than the democrats. And let’s give them the tax increases on the wealthy. We could even cut everyone’s taxes (under 250k) to nearly zero.

Republicans want low taxes, and less spending. Democrats want high taxes and more spending.

So let’s give everyone under 250k low taxes, maybe even really low taxes, maybe even zero taxes. Let’s tax the rich a little more, maybe 5 % more.

And then when the debt limit is hit, just stand by and do nothing. Obama will have the choice of default or cutting spending.

The end result is low low taxes on almost everyone and cuts in spending that must occur or no debt limit renewal.

In short, on the fiscal cliff, we can not win, therefore we must join the democrats. On the debt limit, we can win, and the democrats must join us on spending cuts.

14 posted on 12/08/2012 6:48:26 AM PST by staytrue
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To: Kaslin

He talks so causal about this. Thousands upon thousands of buses with protesters need to be heading to Washington to shut that corruption down while demanding the House Republicans to freaking act like they do believe in the principles of this nation versus not wanting to stand up for free market ideas and less taxation, more freedom. Everyone of these people are corrupt to being weak or either so politically correct motivated, it’s almost impossible to have much respect for them on either side of the aisle. Look at some of the characters there who are suppose to be the brightest to balance the books and to lead. Geithner, Biden, Maxie Waters, Dick Durbin, Charles Shumer, Harry Reid and his side kick, NanCee and disloyal Boehner. (Last month, I saw a bumper sticker: If you are a stupid person, the democrats hire you. If you are a coward, the republicans hire you). If it were not for our veterans, I would tell them to go away and not pay one more cent to their ever spending money pit. Stop spending and balance the books like we all do. It’s all about keeping their powerful positions which give them higher access and protection more so than we all have. I never see some blatant behavior as in telling the American citizen to blank off. Why are they even there.

15 posted on 12/08/2012 6:50:40 AM PST by Christie at the beach (I like Newt. Our nation's foundation is under attack.)
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To: Kaslin

Obama WANTS chaos and the catastrophe following a financial collapse. It is the glorious outcome of the Cloward-Piven strategy for which he has been working. In his mind it will usher in the era of total governmental control as the shivering huddled masses clamor for government to, “Do something for us as we are destitute. “ He is thisclose to his dream scenario.

16 posted on 12/08/2012 6:50:54 AM PST by Don Corleone ("Oil the the cannoli. Take it to the Mattress.")
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To: FlingWingFlyer

I heard that too. Govt jobs depend completely on private sector wealth to sustain them. When the private sector cant do that who pays the govt employee? So, while some are happy about the job ‘gains’ its really nothing more than whistling past the grave yard.

Looking ahead I wonder if Barry’s ultimate goal is to start nationalizing the private sector bits at a time to sustain his govt expansion. It seems plausible...

17 posted on 12/08/2012 6:54:00 AM PST by 556x45
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To: 556x45

I think you’re right about nationalizing the private sector. Barry’s “transformed” America seems to be taking us that way. It’s going to be a disaster.

18 posted on 12/08/2012 6:58:36 AM PST by FlingWingFlyer (Don't tax me bro! Tax that guy over there!)
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To: Kaslin

The whole world is going to stop, I guess. The Republican House can introduce new legislation. They can let the taxes increase and then introduce their own legislation next year to reduce the tax rate on the middle class. Time doesn’t stand still. Just say, “ The Democrats want to increase taxes, so let’s give that a try across the board.” Then, introduce legislation next year to reduce the tax rate for everyone after the economy keeps tanking. Pin this year on the Democrats, introduce new legislation next year to make the Republicans look like the guys who cut taxes.

19 posted on 12/08/2012 6:59:56 AM PST by blueunicorn6 ("A crack shot and a good dancer")
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To: FlingWingFlyer

If that happens it will be w/ the approval of Congress. Thats the truly sad part. These, so called Betters, seem to have given up on our founding principles long ago in favor of counterfeits. We were given so much and squandered it. I sure hope Im wrong!

20 posted on 12/08/2012 7:05:04 AM PST by 556x45
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