House Republicans passed an extension of all the current tax rates already, but the Obama White House is holding the middle class tax extension hostage in order to force a tax hike on the upper two percent of income earners. Such a tax hike would negatively effect countless small businesses and lead to little revenue growth.
Ignoring this reality, the mostly liberal, establishment press is inclined to take any opportunity to blame Republicans for a failure to extend the rates. That press seems to not even notice the hypocrisy coming from Democrats who spent years attacking the ‘Bush tax cuts’ now suggesting that not extending 98 percent of said cuts would be lead to a fiscal crisis. President Obama knows this and therefore has no interest in a deal. His proposal for a deal is essentially his budget, which did not get even one Democratic vote in either the Senate or the House earlier this year. In addition, his negotiations began by demanding Republicans not only give him everything he has previously requested, but also included several new, unreasonable demands, proving he is not interested in a compromise. But Obama knows that the media will support his unwillingness to compromise with Republicans, so he can get away such audacious proposals. Republicans do not have that luxury.
Congressional Republicans must consider the repercussions of each scenario before them and approach these negotiations accordingly. If nothing does get done to stop the country from going off the so-called fiscal cliff, which seems more and more likely given the White House’s current terms for a deal, then all of the tax cuts in question will expire at the end of the year. The media, the Left, and in all likelihood the public, will blame Republicans for failing to capitulate to Obama’s demands and save the middle class tax cuts. Obama will then propose his own middle class tax cuts, which will be difficult for Republicans to oppose. Obama’s plan will include no new spending cuts and no entitlement reforms.
In other words, Obama can do nothing and still achieve all of his goals. Furthermore, when the economy is hurt by these actions, Obama will just blame it on Republicans failing to agree to his deal. That is the reality of the situation that House and Senate Republicans face. If they were negotiating with a President that actually wanted to fix our problems, they could find a decent compromise. However, Obama has proven that he is far more interested in politics than solutions.
So, is there any way Republicans can win this negotiation? I see only one.
Republicans should give Obama exactly what he wants and do it publicly. They should publicly tell Democrats they will not oppose a two year extension of just the tax rates that do not include the top two percent of Americans. When the vote on such a bill comes up, Republicans should simply abstain from voting. Make this White House and the Democrats own their policies in a way even the media can’t ignore. Will the tax hikes on job creators hurt the economy? Yes, but it is going to happen either way. At least this way Democrats have to own the results of their disastrous policies. Then, the American people can judge the success of this Democrat proposal over the next two years and vote accordingly in 2014, after which Republicans can renegotiate the rates with a different, and hopefully more Republican, Senate.
Instead of taking the blame and negotiating among themselves, Republicans need to finally make President Obama and the Democratic caucus own up to their economically illiterate policies.