Republicans Cave on Tax Increases

By Amy Payne, The Foundry - December 4, 2012

Amy Payne

December 4, 2012 at 9:00 am


When President Obama put forth his first offer on the fiscal cliff, House Speaker John Boehner (R-OH) said, "You can't be serious." We could say the same thing to the Speaker after his counteroffer yesterday.

In a letter signed by House Republican leadership, including Majority Leader Eric Cantor (R-VA) and Budget Committee Chairman Paul Ryan (R-WI), Boehner offered to raise taxes by $800 billion and cut spending by $1.4 trillion, with no substantive reforms to the entitlement programs that are driving U.S. spending and debt.

Heritage's Alison Fraser, director of the Roe Institute for Economic Policy Studies, and J.D. Foster, the Norman B. Ture Senior Fellow in the Economics of Fiscal Policy, quickly responded that "the Republican counteroffer, to the extent it can be interpreted from the hazy details now available, is a dud. It is utterly unacceptable. It is bad policy, bad economics."

Boehner's letter to the President actually said that the Republicans were not going to make their more serious proposal, which has already passed the House.

If we were to take your Administration's proposal at face value, then we would counter with the House-passed Budget Resolution. It assumes an overhaul of our tax code with revenue remaining at historically normal levels and proposes structural reforms to preserve and protect the Nation's entitlement programs, ensuring they are sustainable for the long-term rather than continuing to grow out of control.

But, they said, "we recognize it would be counterproductive to publicly or privately propose entitlement reforms that you and the leaders of your party appear unwilling to support in the near-term."

This is precisely the time for laying out bold reforms, showing the nation the principles, vision and policies conservatives share to dig out of this budget mess, today and for the long term. Instead, the leadership pointed to a plan they said was suggested by Erskine Bowles, the co-chair of President Obama's debt commission and formerly Bill Clinton's White House Chief of Staff. It raises taxes, but not by raising tax rates"”instead, by lowering the amount or number of tax deductions or exemptions available.

This misses the point of the tax reform America really needs, said Fraser and Foster:

While preferable in general to raising tax rates, this proposal largely dooms future efforts at tax reform based on the sound principle of broadening the tax base to lower the rates. Instead, this proposal would broaden the base, not to lower rates, but to raise revenues. So much for improved economic growth.

Essentially, it appears the Republican leadership caved on raising taxes and first steps toward fundamental entitlement reforms that are desperately needed to keep Social Security, Medicare, and Medicaid going. To be sure, the Boehner letter is short on details. But, as Fraser and Foster put it, "Beyond disappointing, the House Republican counteroffer appears at best to suggest incremental tweaks to these programs. Without real entitlement reform"”not just spending cuts"”we will never fix the underlying problem."

Not only would this be the right course to take, but Americans polled just after the election have these priorities more in order than the President and Congress.

Just a few days after the election, Gallup asked people to rank a list of 12 issues by importance for the President's second term. Restoring "a strong economy and job market" was No. 1, with entitlement reform"”"take major steps to ensure the long-term stability of Social Security and Medicare""”No. 2. "Make major cuts in federal spending" was No. 6 on the list, while raising taxes on people making more than $250,000 a year was way down the list at priority No. 10.

Now is the time for leaders to get serious. That means serious entitlement reforms that will deliver real savings and improve the programs. The President and House Republicans should both start over and work together toward solutions the nation truly needs.

Quick Hits:

Republicans cave????? no no no, they've intended to give on that one all along….

If they were serious about getting what they want they would have that spineless simp Priebus out there doing a marketing blitz and they would have some serious cuts with names on them in their "proposal". They are no better than the dufus in chief. Once again the Republicans are playing right into the hands of the democrats strategy-wise….I have to think they are doing it on purpose….can they really be this dumb???

How about they come out like a pack of lions going after prey???? Why don't they expose Obama's crappy offer for what it really is…..a joke, a political strategy…..why don't they get aggressive for a change and start some serious marketing???? This is why I left the party on 11/7……Boy would I love to see Herman Cain go after the president……what a slaughter.

The republican and democrat establishments are two sides of the same poison pill . If you and Heritage want to save America , push for repeal of the 16th and 17th Amendments .

THe GOP is no different than the demcrat party. I remember when H.W. Bush made a speech about the NWO. The GOP is in on the same scheme as the Progressives when it comes to putting the government in control of everyone. They are just trying to give us a little show first knowing that they have to do it in steps. Unfortunately, the job is almost complete now and we will most likely have a single party vote in the next general election. Have you noticed that the presidents (including Bush II.) have been creating one crisis after another which the opposing party decries as offensive, yet the republicans always give in to the wishes of the left after much bluster and effusive demagoguery(?).

I have a copy of Boehner's letter. That is not what it says. There is no tax increase in it. There is only closing of loopholes. So, is somebody around here working for Rand Paul or Obama or, where is this misinformation coming from? Hasn't this past election taught you something? Go to the original source. The left will attack, unprincipled politicians will attack, and the left always tries to feed lies to the right so they ditch their guy overboard.

The GOP has lost it. We need to all become Libertarians. After a few more disastrous elections, the Libertarians will emerge with the best policy. Hopefully by then there will still be a USA.

For as much as the GOP vilified Steele, at least he was out there fighting for the Party daily. Since Steele was removed, I don't think I"ve seen Priebus twice on t.v., taking on the issues of the day. Steele fought hard for conservative principles, IMHO, I liked Steele myself, at least he lead.

This is the time for Republicans to use a new strategy that provides them with a win in 2014 instead of a loss. Let Obama have is way on raising taxes on the upper 2%. Lower taxes for the 98%. It is worth more P.R. and advertising money than Heritage can raise in 20 years to combat the blames Republicans will get from the President and his accomplices. Let Obama own the outcome and consequences of his economic policy. He will be 100% accountable without Republicans to blame. Then the public sees Conservatives as correct, not different and we win.

I'll take the increase as opposed to the cliff! The Dems have 20 Senate seats coming up in 2 years, and we can grab those seats, as long as we don't put up some of the dodo's we did this time! The 401k's would get killed if we allow the current cuts to automatically go up.

When you get right down to it, the Republicans are the real problem in Washington – No core conviction, no spine. What a disappointment!! I expected this kind of capitulation from Boehner but to have Paul Ryan sign on to this is a huge disappointment. The Republicans have proven beyond a doubt that they are cowardly and out of touch.

Does this come as a surprise to anyone? Obama and the Dems knew it. Most certainly conservatives knew it. This bunch of spineless Republicans, the same Republicans that gave us losses in the last two presidential elections by forcing McCain then Romney down our throats, while maliciously destroying any conservative in the race, have once again proven they do not intent to uphold the values and principles of the American people. It's about 20 years past the time for this Republican Party to be put out of our misery and replaced it with a true conservative party.

And the problem in a nut shell is no leadership. It is just amazing to me that we would just roll over, I mean who created the mess in the first place and who are we noegotiating with? Let's face it the Republican Party is weak, wounded and once Boehner capitulates he very well may put the nails in the Republicans coffin. He should just walk away, the Democrats have no plan other than to spend more and everyone knows, I guess, except those Republicans in Washington, that the Democrats don't care about the country, they have no plans to cut any spending and will spend every dime they can get their hands on. For Boehner and the Republicans to just cave on the party principles is just sad and pathetic.

Get Boehner out of there and let a true conservative in his place. What is the method?

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