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House Republican leaders said Wednesday they’ve done their job in negotiations to solve the looming fiscal crisis, while President Obama is returning to the campaign trail to sell tax hikes that studies show won’t have much, if any, effect on solving the problem.
“We have done our part by putting revenue on the table,” said House Majority Leader Eric Cantor.
Cantor and fellow House leaders have agreed to close tax loopholes to generate revenue to reduce the $1.1 trillion annual deficit. But they argue the president has yet to say publicly what cuts he will make to the federal budget — specifically to costly entitlement programs such as Medicare, Medicaid and Social Security — to reduce the deficit.
They also say the president’s plan to extend tax cuts only to middle-class Americans will not generate enough revenue to significantly reduce the deficit.
The leaders made their argument the same day Gene Sperling, director of the president’s National Economic Council, laid out the general math facing the country should Congress and the White House fail to reach an agreement, which some economists say would force the country off the so-called “fiscal cliff.”
Sperling told House Democrats that failing to extend Bush-era tax cuts to the top 2 percent of income earners could trickle down to hit the middle class, sources tell Fox News.
On Wednesday, the president will ramp up his public pitch amid a backdrop of hand-picked, middle-class voters at the White House.
Texas Sen. John Cornyn joined the chorus of Republican leaders appealing to the president to instead get engaged in negotiations, noting Obama has no public plan for cuts while continuing to blast Republicans’ demand to extend tax cuts for all Americans.
“All that Republicans are asking is to maintain the current rates until we adopt real bipartisan tax reform,” Cornyn said in an editorial Wednesday in the Dallas Morning News.
The president’s public plan so far is to extend the Bush-era tax cuts for the 98 percent of Americans who earn less than $250,000 per year. The plan would result in tax increases for the country’s highest earners, who Republicans say have the ability to create jobs.
“We cannot tax our way back to budget surpluses and economic prosperity,” Cornyn also said. “Without major spending cuts and entitlement reforms, we will continue running huge deficits, regardless of what we do on the revenue side.”
The White House and Congress are trying to reach a deal before Jan. 1 – when all of the Bush-era tax cuts are set to expire and huge reductions to the federal budget kick in automatically. Those spending cuts are part of a default agreement by Congress after it failed reach a more measured deal to reduce the roughly $1.3 trillion annual deficits that have brought the national debt to more than $16 trillion.
The mix of tax increases and budget cuts will equal roughly $100 billion alone next year and about $1.2 trillion over the next 10 years should Congress and the White House fail to reach a deal. Some economists say that could plunge the economy into a recession.
“We cannot keep postponing structural changes to our largest entitlement programs,” Cornyn added. “And unless we are happy with a tax code that wastes economic resources, stifles job creation and promotes crony capitalism, we cannot keep delaying genuine tax reform.”
Cantor was joined at a Capitol Hill press conference by House Speaker Rep. John Boehner, Majority Whip Rep. Kevin McCarthy and Rep. Cathy McMorris Rodgers, incoming chairwoman of the House Republican Conference.
“Republicans are committed to working with the president, that’s why they’ve agreed to put revenue on the table,” Boehner said. “The spending crisis is coming at us like a freight train.”
Cantor also said he was pleased to see that senior Obama adviser David Plouffe note that Medicare and Medicaid are drivers of the deficit.
Meanwhile, House Minority Speaker Nancy Pelosi on Wednesday furthered the Democrats argument that the party has already made cuts.
“We have already agreed to over a trillion dollars in cuts,” The California congresswoman said. “We’re looking to see what the revenue piece will be to that.”
The president also will be joined Wednesday at the White House by business executives to discuss his strategy.
Among the chief executive officers scheduled to attend the event are Muhtar Kent of Coca-Cola, Home Depot’s Frank Blake and Brian Roberts of Comcast.
Oklahoma Sen. Tom Coburn told Fox News on Wednesday he was indifferent to the president campaigning, saying that was essentially okay as long as White House negotiators were agreeing to a balanced plan.
Earlier this week, Senate Minority Leader Mitch McConnell urged Obama to present a plan that “goes beyond the talking points of the campaign trail.”
The president also is using social media to make his argument. The White House plans to promote (hashtag)My2K on Twitter and other social media — a reference to the estimated $2,200 tax increase that a typical middle-class family of four would see if the Bush tax cuts expire. And Obama on Friday is hosting a rally in the Philadelphia area where he is scheduled to lay out his plan. Story Continued:
– This is a perception that the liberals believe. It is not clear that this is true but it is funny. PdC.
· Democratic left keeps pressure on Obama – Just over two years ago, at a low point in Barack Obama’s first term, his then press secretary lashed out at the president’s liberal critics for flaying the White House’s failure on pet policies such as universal healthcare and allowing gays to serve openly in the military.
Labeling the critics the “professional left”, Robert Gibbs said: “They will be satisfied when we have Canadian healthcare and we’ve eliminated the Pentagon. That’s not reality.”
Since then the complaints have died down. For anyone on the left, Mr Obama has delivered in the most fundamental way, beating back a Republican candidate and party that had in its sights much of the US postwar social safety net.
But the celebrations have not lasted long. In recent weeks, the left has returned to the barricades, presenting Mr Obama with a series of demands to take into talks over avoiding the fiscal cliff, the automatic spending cuts and tax increases that kick in early next year.
Much is made of how the Republicans in Congress quiver in fear of their base, especially since the rise of the Tea Party. Republicans won’t stick their necks out on taxes for good reason. They know their seats in Congress would be in jeopardy if they did.
But Mr Obama has a Democratic base to deal with as well. The negotiations over the fiscal cliff will be as good an indication as any about how much he feels he needs to listen to them anymore.
In last year’s failed talks with John Boehner, the Republican House Speaker, Mr Obama had been willing to discuss elements of the liberal sacred cows, Social Security for pensioners, and different ways to trim benefits paid through Medicare and Medicaid, the programs covering elderly healthcare and low-income families respectively.
Since the election, many of Mr Obama’s allies, in Congress, the unions and various lobby groups, have called for these so-called entitlement programs to be taken off the table in the fiscal cliff talks.
Mr Obama’s victory, they argue, was a mandate for lifting marginal tax rates for the wealthiest Americans and shouldn’t be traded away by cutting benefits for the poor.
Mr Obama appears to agree, at least in the short term, and he may welcome his allies’ agitation on his behalf. The united front he is drawing together to press Republicans to move on tax rates suggests he sees no reason to trade on this issue for the moment either.
But to secure both the kind of policy stability the business community craves and his own place in history, Mr Obama needs a genuine grand bargain beyond mere tax rises on the rich.
Such a deal will neither be credible nor possible unless he takes on the issues that large parts of the Democratic base are telling him to leave alone, namely healthcare for the elderly and income support for the poor.
One reason he might be able to move is that one of Mr Obama’s great successes has been his ability to create a new base that is all his own. He may not be much of a leader of the Democratic party, but he certainly stands at the head of his own political movement.
In the place of blue-collar whites, whom the Republicans have been peeling away from the Democrats on and off for decades, Mr Obama won by cobbling together a new coalition: minorities, single women, young people and social liberals.
Their interest in the budget is often very different from that of the old Democratic coalition, more willing to countenance cutting current benefits in favor of infrastructure investment for the future.
Another reason why Mr Obama should leave entitlement programs on the table is that Republicans continue to give him cover to do so.
Older and blue-collar voters of the kind the Democrats are losing have consistently recoiled from the Republicans’ plan to cap Medicare payments and force seniors into private insurance many will struggle to afford.
A deal on entitlements might offend large parts of the old Democratic base but Mr Obama can always remind them he has saved them from much worse. Story Continued:
· Cracks surface in Republican unity on tax rates – Republican unity against raising tax rates for the wealthy began to show cracks on Wednesday after a conservative congressman said he would back an agreement with President Barack Obama to raise rates on the rich but extend tax cuts for income below $250,000.
With Congress scrambling to avert a series of tax increases and spending cuts due to kick in at the end of the year – known as the “fiscal cliff” – Congressman Tom Cole said Republicans should approve a deal ensuring 98 percent of Americans do not suffer a tax increase that endangers the economic recovery.
With the lower tax rates enacted a decade ago under Republican President George W. Bush due to expire on December 31, Obama and his Democrats have pushed to extend the lower rates for most Americans while letting rates rise for wealthier taxpayers.
Republicans have been adamant about extending the lower tax rates for all taxpayers, including households earning more than $250,000 a year, and finding savings through the elimination of tax loopholes and cuts in the costly Medicare and Medicaid healthcare plans.
“If we have an opportunity to, right now, secure the Bush tax cuts for 98 percent of the American people … and then continue to fight on these other issues, I think we should do that,” Cole, a conservative Republican from Oklahoma, told Reuters in an interview.
“Why make the American people wait through 30 days of this, wondering – 98 percent of them – if their taxes are going to go up,” Cole said.
It is unclear whether the comments from Cole, a senior Republican who has been loyal to the party’s congressional leadership, will lead to an eventual bipartisan compromise in the high-stakes negotiations.
Also, the Bush tax cuts are just one part of a larger deficit reduction plan lawmakers are trying to hammer out.
Cole said Republican leaders had sought opinions on his plan from key House of Representatives members in a closed-door meeting on Tuesday. He described the reaction as “mixed.”
Republican congressional leaders stayed firm for now in their public opposition to any tax rate increases as part of a fiscal cliff agreement.
“I told Tom earlier … that I disagreed with him,” House of Representatives Speaker John Boehner told reporters.
“You’re not going to grow the economy if you raise taxes on the top two rates,” Boehner said, adding Republicans would be willing to talk with Democrats about other kinds of revenue increases along with spending cuts.
Boehner and the White House have an end-of-year deadline to avoid triggering about $600 billion in tax increases and spending cuts in January that could throw the economy back into a recession.
Boehner voiced optimism about striking a deal “sooner rather than later,” while Obama said he hoped to strike a deal with Congress before Christmas. Treasury Secretary Tim Geithner will go to Capitol Hill on Thursday to meet on the issue with House and Senate leaders from both parties.
With a month left before the deadline, markets are worried about predictions that falling off the “fiscal cliff” could trigger another recession. Analysts said a failure to compromise by mid-December could trigger a selloff.
The S&P 500 rebounded from a 1 percent decline, gaining more than 20 points from its low after Boehner’s comments, to close near the day’s highs.
Cole’s stance reverberated through the Capitol, where Democrats have stood firm in their push to raise the top two rates paid by the wealthy in an effort to shrink budget deficits that have topped $1 trillion in each of the last four years.
Cole, said one senior House Republican aide, “is a pragmatist at his core. He knows which way the political winds are blowing” in his congressional district and in the country.
The aide added that while some in the House Republican leadership “are probably cursing his name, when all is said and done, he just may be shining a light” on what is to come in the high-stakes negotiations.
A senior Senate Democratic aide said Cole’s pronouncement “seems like Act Two of Boehner trying to explain reality to the Tea Party.”
That refers to the large number of House Republicans elected in 2010 with the support of small-government tea party activists who vehemently oppose any tax increases. Boehner will have to sell many of them on any final agreement with Obama.
Cole, the former head of the House Republican campaign committee, is one of the party’s most practical members and a loyal supporter of Boehner.
His proposal could give Republicans political protection by guaranteeing most Americans lower tax rates without forcing lawmakers to cast a vote for higher rates for the wealthy. Those higher rates would kick in automatically if Congress does nothing.
Representative Xavier Becerra, a member of House Democratic leadership, said Cole’s remarks showed that “a few Republicans are beginning to break from the rigid theocracy of their party.”
But even with Cole’s remarks, there was still skepticism among some Republican House aides that any tax increase could clear the House and pass roadblocks in the Senate.
Several glimmers of hope for a compromise have surfaced since Obama won a second term in the November 6 election, with some Republicans showing a willingness to consider revenue increases, and some Democrats easing their opposition to new savings in the costly government-run Medicare and Medicaid healthcare programs.
Obama has launched a campaign-style public relations push for his effort to raise taxes on the wealthiest Americans, and met with executives from large companies late on Wednesday.
Many Democrats and Republicans have speculated on the possibility of a compromise that would raise income taxes on the rich, but not to the level Obama wants.
While Obama has called for letting the rates rise for those families with net incomes above $250,000, some Republican aides have said a final compromise could provide a threshold of $500,000 or $1 million, instead of $250,000.
Alternatively, negotiators could look at raising the current 35 percent top rate to a higher rate but not as high as the 39.6 percent Obama wants. Obama said earlier this month that he was “open to new ideas” on the rates.
Obama’s proposal would raise about $80 billion in new revenues a year, which would go a long way toward replacing the $109 billion in harsh, across-the-board domestic spending cuts that are set to begin in 2013 unless Congress acts.
Erskine Bowles, who co-chaired the White House’s 2010 deficit-reduction panel and is now working with chief executives and others to try to broker a deal, met with Republican leaders at the Capitol and said afterward that progress was being made.
“I think we will see give in all areas, if we’re going to get a deal done. If not, we’re going to go over this cliff and I think everybody realizes that would be disaster,” he told reporters.
“Look, I’m not more optimistic or less optimistic. I’m hopeful, but I wouldn’t put me anywhere near the optimistic category,” he said. “We’ve got a long way to go and very few days to get it done.” Story Continued:
· U.S. Chamber: Europe is dying – Europe’s once vibrant economy is slowly dying, robbing American companies of business and prompting calls for a new trade deal to revive the economic health of the continent.
“Europe is in a slow decline,” said Thomas Donohue, president of the Chamber. “We need to see them get stronger.”
Donohue, addressing the Chamber’s board of directors Thursday, said that the organization is pushing for new trade deals to open markets in Europe for U.S. products. A new deal, he said, could spark an economic revival in Europe. Without it, the European economy could slowly fade, choking America’s largest trading partner.
“Its not going to go like that,” he said later to reporters. “They are in a recession already. A lot of people over there, over here, are saying it could be eight to 10 years. Let’s get them the hell out of it so we can sell them some more stuff.” Story Continued:
Two decades have passed since nightclub entertainer and blond bombshell Gennifer Flowers stepped before cameras and announced she had a 12-year affair with then-Gov. Bill Clinton, joining a roster of attractive women who reported similar dalliances, wanted and unwanted. Miss Flowers has stepped forward once again to reveal that in 2005, Mr. Clinton offered to come visit her once again.
“I picked up the telephone, and it was him. I said, ‘No, you can’t come over here. No way.’ I said ‘No, you can’t come to my house.’ He said, ‘I’ll put on a hoodie and jog up there.’ He used to do that. I said ‘No. No. And I want you to leave me alone.’ And that was the end of it,” said Miss Flowers, now 62, as she sipped wine and laughed languidly through an interview with WGNO, an ABC affiliate in New Orleans.
She also had advice for Paula Broadwell, still generating scandalous news coverage of her affair with former CIA Director David H. Petraeus.
“Call me, Paula,” Miss Flowers said, miming a phone to her ear. “I’ll give you some really good advice.”
The self-described “cougar,” author and motivational speaker, incidentally, is currently shopping around a new reality show titled “The Real Housewives of New Orleans,” in which she plays herself.
“I’m always looking for romance,” she explains.
ABOUT THAT LUNCH
Fresh veggies from the White House kitchen garden? Indeed, there could very well be a kale salad involved, though tomato soup and grilled cheese sandwiches might be more comforting. Or meatloaf.
Inquiring minds ponder what will be on the menu when Mitt Romney arrives at the White House on Thursday for a private lunch with President Obama, actually a traditional political ritual meant to prove to the nation’s critics around the planet that civility ultimately prevails in American presidential elections.
The public tone has already been set, with warm praise for Mr. Romney served as tasty appetizer.
“I’m sure that the topics will be many in their lunch. The president noted that Governor Romney was very successful in running the Olympics. He was obviously a successful businessman, and I’m sure has some ideas that the president will find helpful,” White House spokesman Jay Carney told the press gaggle Wednesday, revealing little else. Story Continued:
· Make the Democrats own the Obama economy – One bright spot of Barack Obama’s re-election was knowing that unemployment rates were about to soar for the precise groups that voted for him — young people, unskilled workers and single women with degrees in gender studies. But now the Democrats are sullying my silver lining by forcing Republicans to block an utterly pointless tax-raising scheme in order to blame the coming economic Armageddon on them.
Democrats are proposing to reinstate the Bush tax cuts for everyone … except “the rich.” (Why do only tax cuts come with an expiration date? Why not tax increases? Why not Obamacare? How about New York City’s “temporary” rent control measures intended for veterans returning from World War II?)
Raising taxes only on the top 2 percent of income earners will do nothing to reduce the deficit. There’s not enough money there — even assuming, contrary to all known history, that the top 2 percent won’t find ways to reduce their taxable income or that the imaginary increased government revenue would be applied to deficit reduction, anyway.
Apart from Obamacare, it’s difficult to think of a more effective method of destroying jobs than raising taxes on “the rich.” This isn’t a wealth tax on useless gigolos like John Kerry — it’s an income tax on people who are currently engaged in some profitable enterprise. Their business profits, which could have been used to hire more employees, will instead be used to pay the government.
But Republicans are over a barrel. Unless Republicans and Democrats reach an agreement, the Bush tax cuts expire at the end of the year. By pushing to extend the tax cuts for everyone except “the rich,” Democrats get to look like champions of middle class tax cuts and Republicans can be portrayed as caring only about the rich.
And when the economy tanks, the Non-Fox Media will blame Republicans.
The economy will tank because, as you will recall, Obama is still president. Government rules, regulations, restrictions, forms and inspections are about to drown the productive sector. Obamacare is descending on job creators like a fly swatter on a gnat. Obama has already managed to produce the only “recovery” that is worse than the preceding recession since the Great Depression. And he says, “You ain’t seen nothing yet.”
The coming economic collapse is written in the stars, but if Republicans “obstruct” the Democrats by blocking tax hikes on top income earners, they’re going to take 100 percent of the blame for the Obama economy.
You think not? The Non-Fox Media managed to persuade a majority of voters that the last four years of jobless misery was George W. Bush’s fault, having nothing whatsoever to do with Obama.
The media have also managed to brand Republicans as the party of the rich, even as eight of the 10 richest counties voted for Obama. And that doesn’t include pockets of vast wealth in cities — Nob Hill in San Francisco, the North Shore of Chicago, the Upper East Side of Manhattan and the Back Bay of Boston — whose residents invariably vote like welfare recipients. Seven of the 10 richest senators are Democrats. The very richest is the useless gigolo.
Republicans have a PR problem, not an economic theory problem. That doesn’t mean they should cave on everything, but seeming to fight for “tax cuts for the rich” is a little close to the bone, no matter how tremendously counterproductive such taxes are.
Yes, conservatives can try harder to get the truth out, but as UCLA political science professor Tim Groseclose has shown, media bias already costs Republicans about 8 to 10 points in elections. Try arguing a year from now that Republicans’ refusal to agree to tax hikes on the top 2 percent of income earners — resulting in an expiration of all the Bush tax cuts — had nothing to do with the inevitable economic disaster.
Republicans have got to make Obama own the economy.
They should spend from now until the end of the congressional calendar reading aloud from Thomas Sowell, Richard Epstein, John Lott and Milton Friedman and explaining why Obama’s high tax, massive regulation agenda spells doom for the nation.
Then some Republicans can say: We think this is a bad idea, but Obama won the election and the media are poised to blame us for whatever happens next, so let’s give his plan a whirl and see how the country likes it.
Republicans need to get absolute, 100 percent intellectual clarity on who bears responsibility for the next big recession. It is more important to win back the Senate in two years than it is to save the Democrats from their own idiotic tax plan. Unless Republicans give them an out, Democrats won’t be able to hide from what they’ve done.
Even Democrats might back away from that deal. Story Continued: