Cutting a Deal: Boehner’s No-Win Scenario

Friday, 07 Dec 2012 08:23 PM

By David A. Patten

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With fewer than 25 days remaining before the fiscal cliff becomes a reality, House Speaker John Boehner is facing rising criticism from those on the right who feel the House GOP leader conceded too much upfront when he proposed $800 billion in new tax revenues, thereby damaging Republican chances of linking any tax hike to long-term cuts in entitlement spending.

Boehner reported “no progress” on a deal to avoid the fiscal cliff Friday, after another day passed without the administration even bothering to make a counteroffer to the Speaker’s initial proposal. Administration strategists appear willing to let Boehner and his House caucus sweat, based on their view that the president’s re-election victory, and the imminent expiration at year’s end of the Bush-era tax cuts for all income brackets, give them the upper hand.

Conservatives roundly criticized Boehner’s initial concession of $800 billion in new revenues, and the political backlash within his party continues to build.

On Friday, two maverick Republicans who were booted off key committees for bucking the GOP leadership suggested that they might not support Boehner’s continued role as speaker.

“Well, right now I’m not very happy with the speaker, so let’s see what happens over next several weeks,” Michigan Rep. Justin Amash, who lost his seat on the Budget Committee, told CNN. Kansas Rep. Tim Huelskamp, who also lost his Budget Committee seat, said Boehner's purge "just brought home the concerns people had about the GOP establishment leadership."

Economist Chris Edwards of the CATO think tank joined the growing chorus on the right slamming Boehner Friday.

“I think coming out right after the election and saying he’s going to agree to a huge tax increase is sort of bizarre, because when you think about it that was such a dramatic and major thing for a Republican leader to say,” Edwards told Newsmax. “For 20 years, tax cuts have been the glue that has held this coalition party together, a coalition of social conservatives, war hawks, and libertarians.

“And Boehner in one big sweeping thing just threw that in the trash and said that Republicans are no longer the party of tax cuts,” Edwards said.

Edwards told Newsmax that some conservatives have floated the name of Ohio GOP Rep. Jim Jordan, the stalwart conservative who chairs the Republican Study Committee, as a possible alternative. But no one has suggested yet that the resourceful Boehner, who has guided his caucus through a series of contentious tax and debt-ceiling deals, has any serious rivals for a job that at times involves an almost-impossible juggling involving the party’s different factions.

Many Republicans have acknowledged privately — and some have stated publicly — that with the expiration of the Bush tax cuts only weeks away a tax hike is likely, if not inevitable.

On Wednesday, Treasury Secretary Timothy Geithner said the administration “absolutely” is prepared to let the harsh combination of major tax hikes and fiscal spending cuts — the so-called fiscal cliff— take effect, if Republicans refuse to put their fingerprints on a tax increase. Speaker Boehner fired back Friday, calling that remark “reckless talk.”

The White House on Thursday dispatched its congressional liaison to Capitol Hill, to tell Republicans in private what the president has been stating publicly for weeks: That Republicans must agree to raise tax rates paid by the wealthiest 2 percent of Americans if they wish to avert tax increases on the middle class. Conservatives counter that Washington has a spending problem rather than a revenue problem, and point out that even the president has stated previously that raising taxes in the middle of a weak economy is bad policy.

Unfortunately for Speaker Boehner, the administration appears unwilling to offer much more than a vague promise to work on the nation’s growing entitlement liabilities, which by some accounts amount to a staggering $100 trillion as more baby-boomers retire and come to rely on Social Security, Medicare, and Medicaid. Republicans would find raising tax revenues much more palatable if they could do so as part of a deal that also reins in entitlements, perhaps by raising the eligibility age.

But the longer the administration drums its fingers on the bargaining table — Boehner on Friday accused the administration of trying to “slow-walk” the negotiations — the less likely there would be time to work out changes to entitlements prior to the other aspects of the fiscal cliff taking effect. That suggests President Obama not only holds the upper hand, but has a growing advantage with each passing day.

Most observers assume that the administration will cut a deal with House Republicans, once the need for an 11th-hour deal becomes obvious. But others suspect the standoff is viewed as a chance to increase federal revenues while blaming Republicans for whatever calamities might subsequently befall the economy.

New York Times columnist David Brooks warned Friday: “If President Obama is flexible and they don’t meet him part way, Republicans would contribute to a recession that would discredit them for a decade.”

Boehner on Friday would not rule out raising taxes on families earning $250,000 by some lesser amount than the 39.6 percent marginal rate the Obama administration seeks.

Edwards told Newsmax that Republicans actually have much more leverage than is generally recognized, because the grass-roots wave swept into office in the 2010 midterms were “virtually all re-elected.”

“I think there’s a lot of media spin here that Republicans have to cave, Republicans have to cave,” Edwards said. “I don’t think so, I think they’re in a very strong position. They have a very large majority in the House. It just seems they’re letting Obama play hardball.”

Dani Doane, director of the Government Studies Department at The Heritage Foundation, told Newsmax she was “very surprised, shocked, and frankly disappointed” when the Obama administration scoffed at Boehner’s initial offer of $800 billion in new revenue. But if Republicans agree to raise taxes without a corresponding deal on entitlements as a fig leaf, the political repercussions to them could be substantial. The tea parties, of course, have shown a willingness to primary any Republican who refused to toe the line on spending and taxes.

“I think it’s going to be very dangerous,” Doane told Newsmax. “Already, you have the grassroots very loud and very unhappy with that. I mean you have the Grover [Norquist anti-tax] pledge, and you’ve seen already members who are trying to back out of that, even though most of them signed it. So I think a lot of the grassroots will be very angry.”

One politician who appears not the least disconcerted by the pending double-whammy of higher taxes and reduced spending is former House Speaker Nancy Pelosi. The California Democrat lambasted the GOP leadership’s decision to let members return to their districts early this week, when it became evident a tax deal was not at hand.

“This is a moment of truth,” Pelosi told the media Friday, flashing her brittle, trademark smile. “The clock is ticking. Christmas is coming. The goose is getting fat.”

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