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Larry Kudlow: Donít Blame Boehner. Plan B was the least-bad option with this President and Senate.
National Review ^ | 12/21/2012 | Larry Kudlow

Posted on 12/21/2012 3:13:14 PM PST by SeekAndFind

When you lose an election you get frustrated. When you’re sitting in a subpar 2 percent economy, and are faced with tax hikes rather than marginal rate reductions, you get even more frustrated. And when you’re staring at $47 trillion in spending over the next ten years, and $8.6 trillion in deficits, your frustration levels climb even higher.

These are among the frustrations that led a number of House Republicans to pull back from Speaker John Boehner’s so-called Plan B. Nobody looked good on the Republican side when Thursday night’s vote fell through. But you have to understand their frustrations. Losing an election is no fun.

I don’t blame John Boehner. His idea is the best compromise currently available. Or put another way, it’s the least-bad option out there. It was even backed by Paul Ryan and Grover Norquist.

There was the million-dollar threshold for letting the top tax rate expire and moving it back to 39.6 percent. All the other Bush tax rates remained the same. Capital gains and dividends would rise from 15 percent to only 20 percent. The estate tax would go to 35 percent, not 55 percent. And everything would be made permanent, unless and until real flat-tax reform by lowering rates and broadening the base took place.

No, there were not enough spending cuts in Plan B. But a couple hundred billion in spending cuts were inserted at the last minute.

Boehner figured that if the House passed Plan B, it could put pressure on President Obama and the Senate Democrats to raise taxes less and cut spending more. A couple dozen House conservatives wouldn’t buy it. I understand that. But I still think Boehner was on a noble mission in very difficult post-election circumstances.

The demise of Plan B almost certainly will prolong the fiscal-cliff negotiations, which will spill over into the new year. But I still believe this is a game where all the players are bluffing. Washington lawmakers will not risk a recession by allowing all the Bush tax cuts to expire, thus pulling $500 billion out of the economy, and by rolling back important economic-growth incentives. I just don’t believe it.

And if the negotiations go well into January, the Treasury Department and the IRS can stall any changes in withholding rates. Then a deal can be worked out that will extend the middle-class tax cuts up to a threshold of $250,000 to $400,000. Patching the AMT will be thrown in there, too. So will the so called “doc-reimbursement fix,” some kind of unemployment insurance, and some small leftover sequester spending cuts.

This will make no dent in our spending, borrowing, and debt problem. But at least it will avert a recession.

For the Republicans, the sooner they can get out from under this mess, and move on to tax, spending, and entitlement reform, the better off they’ll be. And for Heaven’s sake, let’s finally cut the corporate tax rate. But for now, it’s time for a strategic retreat, as the economy teeters over the cliff.

One final thought: In a post January 1 scenario, after Washington has temporarily gone over the cliff and all the tax rates have gone up, any bill that restores the Bush tax cuts actually becomes a bill to cut tax rates, not raise them or stop them from rising. That’s a much better dynamic for the GOP’s strategic retreat.

But alas, real reforms for taxes, spending, and entitlements, and real fiscal solvency, and real economic-growth prosperity, still seem very far away.

– Larry Kudlow, NRO’s economics editor, is host of CNBC’s The Kudlow Report and author of the daily web log, Kudlow’s Money Politic$.


TOPICS: Business/Economy; Culture/Society; Government; News/Current Events
KEYWORDS: boehner; fiscalcliff; johnboehner; larrykudlow; ohio; planb

1 posted on 12/21/2012 3:13:27 PM PST by SeekAndFind
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To: SeekAndFind
Blah blah woof woof...

...Conservatives don't DO tax increases and don't DO class warfare...FRIGGIN PERIOD!!!

Kissa mah ass!!!

2 posted on 12/21/2012 3:20:38 PM PST by Happy Rain ("Gun free zones are baited fields.")
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To: SeekAndFind
Screw Kudlow.
3 posted on 12/21/2012 3:26:21 PM PST by Navy Patriot (Join the Democrats, it's not Fascism when WE do it, and the Constitution and law mean what WE say.)
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To: SeekAndFind

Pass an 18% flat tax. Throw it out there and see what happens. Let the media get into the weeds of the details.


4 posted on 12/21/2012 3:43:18 PM PST by calico_thompson
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To: SeekAndFind

When they say that it will not reduce the deficit. Say that we are looking for leadership on reducing expenditures. Pose - What percentage of a person’s income should go to taxes?


5 posted on 12/21/2012 3:46:16 PM PST by calico_thompson
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To: Happy Rain

Hey the rich voted for Obama. They want their taxes raised. Let them have it good and hard. The public wants... it everyone wants it. For conservatives to fight this battle for folks who don’t want their help is beyond stupid.


6 posted on 12/21/2012 3:48:32 PM PST by Blackirish (Forward Comrades!!!!!!!!!)
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To: SeekAndFind

We’re NOT in a recession NOW?
Who knew?
I’m always the last to know.


7 posted on 12/21/2012 3:49:14 PM PST by tet68 ( " We would not die in that man's company, that fears his fellowship to die with us...." Henry V.)
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To: SeekAndFind

Plan B was bad, but rejecting it simply means a worse option will eventually pass through the House - it will just be done with mostly Democrat votes instead.


8 posted on 12/21/2012 3:54:54 PM PST by Longbow1969
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To: SeekAndFind

The problem with Boehner is that he is NOT part of the solution. He can’ be... he is not equipped to be. I’m sure he has his talents, but leadership is not one; ability to dream up and then make bold strokes to fiscal health to attack the spending not his forte.


9 posted on 12/21/2012 3:56:50 PM PST by C210N (When people fear government there is tyranny; when government fears people there is liberty)
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To: Blackirish

RE: Hey the rich voted for Obama.

Is there a reliable poll that tells us that?


10 posted on 12/21/2012 4:19:46 PM PST by SeekAndFind
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To: tet68

RE: We’re NOT in a recession NOW?

A recession is officially defined as two consecutive quarters of negative GDP growth.

Our GDP growth might be very little, but it has not been negative for 2 years.


11 posted on 12/21/2012 4:21:28 PM PST by SeekAndFind
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To: SeekAndFind

http://blogs.wsj.com/wealth/2011/10/27/most-millionaires-support-warren-buffetts-tax-on-the-rich/?mod=e2tw

A new survey from Spectrem Group found that 68% of millionaires (those with investments of $1 million or more) support raising taxes on those with $1 million or more in income. Fully 61% of those with net worths of $5 million or more support the tax on million-plus earners


12 posted on 12/21/2012 4:25:23 PM PST by Blackirish (Forward Comrades!!!!!!!!!)
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To: Blackirish

Nothing is preventing these millionaires from sending more money to
The IRS. They can write and make a donation today if it makes them feel
better.


13 posted on 12/21/2012 4:33:50 PM PST by tennmountainman
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To: Blackirish

Nothing is preventing these millionaires from sending more money to
The IRS. They can write and make a donation today if it makes them feel
better.


14 posted on 12/21/2012 4:34:00 PM PST by tennmountainman
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To: tennmountainman

Funny thing, when these m/billionaires DO give away their money, they don’t show their faith in an all-wise federal government. Nope. The substitute their own selfish judgement of what constitutes a good use of their resources.


15 posted on 12/21/2012 4:39:25 PM PST by jjotto ("Ya could look it up!")
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To: tennmountainman

Fighting for the tax rates of a bunch of rich Obama voters makes as much sense as fighting for freedom in a Muslim country. They don’t want our help and aren’t worth the effort anyway.


16 posted on 12/21/2012 4:40:31 PM PST by Blackirish (Forward Comrades!!!!!!!!!)
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To: Blackirish

RE: A new survey from Spectrem Group found that 68% of millionaires (those with investments of $1 million or more) support raising taxes on those with $1 million or more in income.

What about those earning BELOW $1 Million in income (a huge number of small businessmen )?


17 posted on 12/21/2012 4:46:05 PM PST by SeekAndFind
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To: Blackirish

RE: Your post...

Fully 61% of those with net worths of $5 million or more support the tax on million-plus earners

In this case, Boehner ought to submit PLAN C, Raise the rates of those making $5 Million or more. That is more in line with the survey results.


18 posted on 12/21/2012 4:51:54 PM PST by SeekAndFind
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To: SeekAndFind

I think plan B is a million and up.


19 posted on 12/21/2012 5:02:33 PM PST by Blackirish (Forward Comrades!!!!!!!!!)
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To: Blackirish

RE: I think plan B is a million and up.

I am not talking about PLAN B ( it is already dead ).

I am referring to the poll you referred to where 61% of those making $5 Million and up want taxes raised.

So, I say a PLAN C is in order, raising taxes for those making 5 Million and up ACCORDING TO THEIR WISHES.

And Boehner can refer to the poll you just showed in presenting that.


20 posted on 12/21/2012 5:06:23 PM PST by SeekAndFind
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To: SeekAndFind

I propose plan D - tax those above $1M income based on net WORTH

Then watch the howling


21 posted on 12/21/2012 6:13:14 PM PST by i_robot73
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To: SeekAndFind

It was a (<1M tax cut) trick to try to beat O at his own game. But it wasn’t very well planned and the R party is totalty fractured and more interested in fighting each other than beating O. Boner is weak and slow but he has a no-win job so NO_ONE will challenge him.

One side cares about symbolic actions, like 33 symbolic repeals of O-care, the other side cares nothing for symbols as they are out to win and take it all, to get what they want.

So in 2015 and 2016 when Pelosi takes back the House and Reid gets back his 59 or 61 Obama will finish the job,.


22 posted on 12/21/2012 8:16:25 PM PST by sickoflibs (Dems know how to win. Rs know how to whine.)
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To: SeekAndFind

Piss off Larry!


23 posted on 12/21/2012 9:35:48 PM PST by vette6387
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To: Happy Rain

He failed to bring along the guys who vote on whatever deal he makes. He failed to get his message and plan out to the public. He’s not a dictator. He’s a poor leader.


24 posted on 12/21/2012 10:24:12 PM PST by SaraJohnson
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