House Majority Leader Eric Cantor (left) leading opposition to McConnell-Biden deal. House Speaker John Boehner supports it.
Democrats want higher taxes on the wealthy, an extension of unemployment benefits, some stimulus, and assorted other spending to continue stimulating a moribund economy.
Republicans pretend they want to eliminate the deficit, but their entire negotiations are about destroying entitlements and keeping taxes low on the richest.
House Speaker John Boehner couldn't even get his caucus to vote for his plan, so he left things up to the Senate. So Senate Minority Leader Mitch McConnell and Vice President Joe Biden worked out this deal:
Republicans got a reverting of pre-Bush tax rates on income above $400,000 per year ($450,000 for families), unlike the $250,000 Democrats wanted (and campaigned on in 2012, and won). Republicans also got an indexing of the estate tax, so it goes up every year at the rate of inflation (necessary for rich dead people, but not necessary for minimum wage earners, apparently).
Democrats got a one-year extension of unemployment benefits, the elimination of some tax deductions on those making over $250,000, the extension of some business tax breaks, like for wind energy. There was some other stuff, but those are the most ideologically contentious items. And if that was the end of things, it would be a decent compromise and everyone could go home feeling okay about it. Republicans protected more of their rich friends' money, and Democrats got to help more people.
Except that this isn't the end of the negotiations. In fact, we have to do this all over again in two months.
And the problem is that in two months, Republicans would hold all the cards—the debt ceiling will be hit. So Democrats would have two choices—surrender on Social Security, Medicare, Medicaid, and a host of other critical social programs, or Republicans force a default on the national debt with calamitous repercussions for our economy. And if you think Republicans aren't crazy enough to make that happen, then you really haven't been paying attention to what has become of the House GOP.
The ONLY leverage Democrats have in this fight is tax rates. And this deal takes those off the table. So how crazy is it that House Republicans appear hell bent on blowing up this deal?
(More below the fold)
Comments are closed on this story.