Sunday, December 23, 2012

MEMO TO BOEHNER (Thoughts on the Fiscal Cliff. . .and the Stupid Party)

As the deadline approaches to find a solution to the "fiscal cliff", some thoughts that I believe need to be kept in mind:

a)  The fiscal cliff is both a "tax" problem and a "spending cut" issue.  The tax problem can be explained as such:  without a fix, taxes will be going up on a whole swath of people (pretty much anybody who has a job, plus everybody who doesn't have a job because of their wealth and/or investments).  The spending cut issue is all about sequestration--the mandatory mechanism to cut spending that was agreed upon as part of the debt limit discussions in the summer of 2011.  These two events are "tied" to each other not by topic but rather by time:  absent a remedy, the "problems" would both take effect on the same business day.

b)  The Republicans have argued that higher taxes on anybody will hurt the economy.  While "middle class" taxpayers certainly don't want their own taxes to go up, I don't think that the big-picture argument that higher taxes on the wealthy will have a negative impact on the rest of the economy is winning the day.  In fact, if there is one takeaway about the election, I opine that such takeaway is that a majority of the country seems to think that higher taxes on the wealthy will help in some way, shape, or form.

c)   Obama may or may not care to watch the country go over the "cliff"--but that is immaterial.  What IS material is that he wants to stick the GOP with the most nefarious intentions possible.  In that desire he is joined by the media, which undoubtedly would like nothing more than to watch the House flip back to Democrat control in the '14 mid-term elections.  The media will play up any and all noise of GOP intransigence or disarray in order to poison the battelefield for the next midterms.  This union, coupled with the confluence of legislative timing that brings us to the cliff, puts the GOP distinctly at a disadvantage in any negotiations.

d)  While the "cliff"  may be the biggest thing going on right now, it is child's play compared to conversations that Obamacare will bring to the dinner table in the next two years--provided that dinner table isn't already loathesome of the GOP.

and e)  those mid-term elections in '14 are a big deal.  Huge!  Can you imagine what will happen if the Dems have total control of DC for Obama's last two years?

Now to my multi-pronged thesis:

1.  First and foremeost, Republicans need to understand that the party already lost on the sequestration issue.  They believe they acted "responsibly" with the debt ceiling discussions last summer--and sure, I guess that allows some of us to sleep soundly at night.  But conservatives were outmaneuvered in those discussions.  Agreeing that national defense should be 50% of any spending cuts was just plain dumb from a strategic sense.  But that's a conversation for last year's discussions; for this year's discussions all we need to know is that the GOP is already a partner in the scheduled "non-discretionary" cuts to Defense and other agencies (but so is the Dem party).  There's no reason for rank-and-file Dems to reopen this discussion as anything other than a bargaining tool--in fact Obama seems only to bring the topic up as a play for more ridiculous concessions from the GOP.  "We" need to come to grips with the failure of last year; therefore those of us on the right should not put too much hope in sequestration being repealed, redirected, or "re-" anything.  It is the law of the land--get used to it and LEARN from it!

2.  Only with a firm grasp of the sequestration reality can we now attack the "fiscal cliff" in it's true light.  It is an unsolveable monster as a tax-and-spending beast (well, not unsolveable--but impossible to solve without making a deal that is really, really, really bad from the GOP's standpoint); it is a minor nuisance as a tax problem.  As it stands right now, the GOP is the only thing that ties another year of the current tax rates for 90-plus percent of the population to this around-the-corner deadline.  If the GOP can get out of their own way right now they can live to fight a battle on all these economic issues another day.  Case in point:  the Senate has already passed S 3412.  It's not a dream bill but it IS the easiest mechanism by which GOP keeps tax rates low on the portion of the population that "everybody" agrees should be spared from tax hikes.  SO pass it--have Boehner plus a host of others be a "no" vote because they don't think the bill solves any problem (insert boilerplate trickle-down discussion here) and have that position be the "face" of the House GOP--but ensure the bill passes so that the House GOP doesn't look like idiots that want everybody's taxes coupled together when that is not the position of this country at this time.

3.  This plan avoids any further negotiations--which will not work out well for the GOP regardless.  S3412 is already past the Senate; if the House passes it without amendment it goes to Obama for signature.  And he will sign it because he would have no other choice--he certainly couldn't be the ONE PERSON who keeps the extended low tax rates from 90-plus percent of the country.

This plan also keeps the debt ceiling right where it should be:  a separate topic that will draw its own interest later this year.

And most importantly:  this plan will let other issues "bubble" into the public conscious as they will (keeping in mind the media holds much sway on such things) without the accompanying narrative that "everything would be so much better if only that darn House GOP would have protected your tax rates."  I, for one, am almost longing for the public that re-elected the President to "feel" Obamacare in all it's splendor (not so much in the doctor's office but rather at their "office" office).  "Pass it to find out what's in it", indeed!