By the end of another week of “fiscal cliff” discussions,
the press and a whole world of day-traders will be obsessing over Obama’s true
intentions. Is he sounding tough because he’s arrogant? Has the election gone
to his head? Is he only buying time for
things to get so ugly that even liberal democrats will thank him for again
giving in to the Republicans?
Or is he just waiting for Republican wordsmiths to so
confuse the issue that he’ll be able to surrender on taxes and the deficit
without anyone noticing?
Sadly, the last gentle scenario can be ruled out:
Republican street rhetoric about just closing “loopholes” and raising revenues
from special “special interests” won’t give Obama cover if he gives up on his
promise to fully restore Bill Clinton income tax rates on the most affluent.
Thanks to former Treasury Secretary Robert Rubin’s op-ed piece in the New York Times, it’s not possible to
imagine that “tax reform” Republicans have a practical alternative. Finding the
money Obama needs by cutting popular deductions for home mortgage payments,
charitable donations, and employer insurance premiums, Rubin concludes, is a
high-minded, bipartisan goose chase.
“When you compare raising the
marginal rates for roughly 2 million Americans to phasing out health insurance
exclusions that would affect 150 million Americans — even if some reform should
be done — I don’t think it’s a close call substantively or politically.
“We should let the Bush high-end
tax cuts expire, with an achievable, progressive reduction in tax expenditures.
And we should have spending cuts, including entitlement reforms, equally
matched by revenue increases. The entire program — including budgetary room for
public investment and a moderate upfront jobs package — could be enacted now
and deferred for a limited time with a serious mechanism to guarantee
implementation.”
Brian Beutler in
TPM this morning quotes Rubin and adds:
“In January, TPC analyzed (PDF) the
revenue and distributional effects of three plans to limit tax expenditures.
Each would raise over $2 trillion over 10 years. But each would also require
millions of middle class taxpayers to pay higher taxes — something Obama’s
pledged not to do.”
Republican
leadership and their business economists may argue that Rubin’s been out of
Washington for too long, that they’ve got new analysis that they’ve been
holding back to help whoever won the election. Nothing they’ve said or tabled
so far, however, should persuade anyone to believe that they are better at
political economy and, politically, are more courageous than the generation of
politicians Rubin served in the 90s.
From
a distance, it’s impossible to imagine that today’s Republican legislators—men
and women who were never clear with the people in last week’s elections—can now
match, let alone trump, the courage of a President who was always clear about
what he wanted to do, if he was re-elected.
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