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The Rational Center | Commentary by John Zaring
| Tuesday, Dec 4, 2012

President Barack Obama sent Treasury Sec. Timothy Geithner to Congress on Thursday, armed with a proposal calling for $2.6 trillion in savings achieved through both spending cuts and new revenue.  In his plan, which delivered on promises made repeatedly on the campaign trail, Obama outlined $1.6 trillion in new tax revenue and $600 billion in spending cuts.

Nobody expected Republicans to blurt out, “Oh, thank you, President Obama, this is perfect,” but House Speaker John Boehner of Ohio couldn’t get to a microphone fast enough to dismiss the president’s plan as “laughable,” pouring ice-cold water over any hope that he was prepared to be relentlessly constructive.

Boehner later told “Fox News Sunday,” “I’m flabbergasted,” and claimed he told Sec. Geithner, “You can’t be serious.”

Meanwhile, over on CBS’ “Face the Nation,” Sen. Lindsey Graham of South Carolina calmly predicted, and I quote, “I think we’re going over the cliff.”

Geithner visited CNN’s “State of the Union” to voice the administration’s own frustration, saying, “What we can’t do is sit here and try to figure out what works for them.”

A Gallup poll released Monday said more than half of Americans believe our representatives in Congress have either low or very low ethical standards, and showed Congress is only slightly more trusted than used car salesmen.  Meanwhile, a recent CNN/ORC poll found that only 28 percent of Americans believe Congress will behave like responsible adults during fiscal cliff negotiations, while 67 percent predicted they will act like spoiled children.

Looks like the “spoiled children” label wins.

If ever there were a time for leaders of both parties to step up and prove they don’t deserve that reputation, it would be now.

On Monday afternoon, congressional Republicans sent a letter to the president with what Boehner called a “bold counter-proposal.” Unfortunately, the GOP’s proposal was notable as much for its lack of specificity as for the conspicuous lack of a tax increase on the wealthiest Americans.

Not surprisingly, since the president campaigned on raising taxes on the top 2 percent and well, he won, Obama’s surrogates immediately called it a non-starter.

Despite a fitful recovery from the worst economic crisis since the Great Depression, leaders on both sides appear all too content to revel in partisan belligerence.  This was only the GOP’s opening salvo, and while they offered no specifics Monday, a lot of specifics were put to paper during negotiations with the president during the debt ceiling crisis in the summer of 2011 when a so-called “grand bargain” fell apart only after Boehner couldn’t get his Tea Party freshmen to accept $1 in revenue increases for every $9 in spending cuts offered by Obama.

Arguably, the only mandate to come out of the general election is that voters agreed with the president that the wealthy should pay more, so each side is going to have to offer up some sacred cows.  But what will compromise look like?

First and foremost, Republicans must agree to higher taxes on the wealthiest top 2 percent; that’s clearly their ticket for admission to the dance.  The president won by campaigning on this, and polls show that the American people support him in overwhelming numbers.

Democrats, on the other hand, will have to agree to cuts to Medicare and Medicaid, and that means reductions in healthcare for seniors, poor people and special-needs kids – constituencies that Democrats historically have fought tooth-and-nail to protect.

By the way, polls show that roughly seven out of 10 Americans are against cuts to these programs, which means that this will be as painful for Democrats as raising taxes is for Grover Norquist devotees.

Both sides will have to make real cuts to the Pentagon’s budget (yes, I’m talking to you, Rep. McKeon).

It has to be done.

Over the past four years, Republicans demonstrated an arrogant resistance to reasonable compromise for no reason other than to prevent President Obama from gaining a second term.  In hindsight, it is reasonable to argue that their obstinacy ended up costing Mitt Romney the presidency.  But since Obama’s reelection, some Democrats seem just as eager to humiliate Republicans, and that also does America no good.

The GOP’s main argument is that if you increase taxes on the top 2 percent, you’ll be hurting “job creators,” but studies by nonpartisan economists have repeatedly debunked this idea, showing that the wealthy simply do not spend marginal income the same way they spend core income.  They save it – just as Mitt Romney safely parked his investment income in the Cayman Islands – and rarely use it to hire more workers.

Many people forget (or perhaps don’t even know) that the wealthiest Americans in 1980 paid a  top marginal rate of 70 percent until Republican President Ronald Reagan, and Democrat House Speaker Tip O’Neill worked across party lines to drop it to about 50 percent, and then dropped it again in 1986.  The top rate later fell to the 39-percent cap of the Clinton era, which means there’s been an entire generation of Americans who have seen their taxes lowered instead of raised, and yet here we sit, after the unfunded tax cuts of President George W. Bush (and their various extensions under Obama), with stagnant job growth, record annual deficits and perhaps most tellingly, a national debt of epic proportions.

In my opinion, it would be beyond silly for Republicans to take us over the fiscal cliff in defense of a historically paltry 3.6-percent raise in the top tax rate on the rich – most of whom reside in blue states, by the way.  Yet unfortunately, in today’s Washington, where partisan politics are the rule and listening to the American people the exception, silly is the norm.

Let’s hope they get it right this time.

 

John Zaring describes himself as a reformed Republican turned moderate Democrat who believes democracy works best when its government actually functions because its leaders are working together. He serves on the Castaic Area Town Council’s Land Use Committee, Castaic Middle School’s Site Council, the Hart District’s WiSH Education Foundation, and he is the West Ranch High School representative on the Hart District’s Advisory Council. A self-proclaimed “New Democrat” a la Bill Clinton, he lives in Castaic with his wife of 21 years and their daughters, Fiona, 16, and Kylie, 12. His commentary publishes Tuesdays.

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1 Comment

  1. Zaring isn’t as interested in what works as making a cheap idealogical point, Raising marginal rates is not guaranteed to increase tax revenue. In Britain , a large number of millionaires have diasappeared and revenue has dropped. The American people did not vote for economic suicide and the GOP should not pull the trigger. Zaring and Obama really want to go off the cliff together like Thelma and Louise. John, taxation and spending is determined by thew legislative branch-the president administers the government. Read your Constiution.

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