But even though Republicans are the ones holding middle-class tax cuts hostage—their ransom demand being an extension of tax cuts that would only go to the wealthy—they are accusing President Obama of overplaying his hand and refusing to make a serious offer. And even more bizarre, they are claiming that they have proposed raising taxes even as they hold middle-class tax cuts hostage to protect tax cuts for the wealthy.
Here's House Speaker John Boehner, yesterday:
“Right now I would say we’re nowhere, period. We’re nowhere,” House Speaker John A. Boehner, Republican of Ohio, said on “Fox News Sunday.”Actually, when it comes to taxes, Republicans haven't put a serious offer on the table. They say they agree with President Obama's position that we should continue middle-class tax cuts, but they refuse to do so unless we also continue Bush's tax cuts for the wealthy. They claim that they are open to new revenue, but refuse to be specific about how they would achieve the new revenue, and say they would only consider it after extending Bush's tax cuts for the wealthy.
“We’ve put a serious offer on the table by putting revenues out there to try to get this question resolved,” he said. “But the White House has responded with virtually nothing.”
The pattern is impossible to miss: the centerpiece of the GOP position on taxes is that the Bush tax cuts for the wealthy must continue, everything else be damned.
Their position isn't any better on spending, where they are demanding an increase in defense spending and nonspecific cuts to Social Security, Medicare, and Medicaid, but spending and taxes don't need to be resolved simultaneously. Given that the impact of the expiration of middle-class tax cuts will impact the economy before automatic spending cuts, it's easy to see why President Obama's top priority is dealing with taxes and extending those middle-class cuts.
Republicans say they also want to extend those middle-class tax cuts, but they have a weird way of showing it. Unlike the president, they are refusing to take action without simultaneously enacting tax cuts that would only go to the wealthy. But even though they are the ones making ransom demands, Republicans are accusing the White House of overplaying its hand:
Republican strategists argue that in resorting to campaign-style events to take his fiscal message to voters, Mr. Obama is overplaying his hand, much as President George W. Bush did after his re-election when he barnstormed the country in favor of a Social Security restructuring plan that he never successfully sold to leaders on Capitol Hill.Of all the clueless things uttered about fiscal cliff politics, that has to rank near the top. It's hard to believe that anyone could seriously believe President Obama is taking a huge political risk by pushing for an extension of middle-class tax cuts as the first step of avoiding the cliff, but then again, these are the same guys who thought Mitt Romney was on the cusp of victory when they woke up on the morning of November 6.
“He is overreading his mandate,” said John Feehery, a former adviser to top House Republicans. “By doing the campaign thing, he is making the same mistake Bush made in 2005.” Eventually, he said, Democratic and Republican leaders “are going to cut the deal, and Obama is going to be on the outside looking in.”
Here's another bizarre GOP analysis of the state of play:
Republicans now understand that higher tax rates on the wealthy is Mr. Obama’s No. 1 priority, so rather than give in, some strategists say they should hold out to leverage those to shape other aspects of a final deal.At least Fratto implicitly comes to grips with the fact that Bush's tax cuts for the wealthy are going to be history, but his assessment of the degree of leverage held by Republicans is nonsense. The Obama administration clearly understands that extending middle-class tax cuts is the first and most urgent priority facing the nation.
“He only cares about one detail: raising rates on the top two brackets,” said Tony Fratto, a former White House and Treasury Department official under Mr. Bush. “Everything else is secondary. That’s why if that is going to happen, it will be last if Republicans can hold out. I think it’s pretty clear Obama will sacrifice just about anything to get that. It’s the only win for him.”
The president's message is that those tax cuts need to get passed immediately—whether or not there are other issues left to resolve. Republicans are responding to that message by holding the tax cuts hostage. They may think that they are flexing their muscles and showing their leverage, but what they are really doing is making sure that if taxes go up at the start of the new year, they are the ones who will get blamed. They'll be the party holding tax cuts for everybody (including the wealthy) hostage—and they'll be doing it to get tax cuts that only go to the wealthy. That would be a political disaster for the GOP. The only question is whether they realize it before or after it happens.