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.