Congress looks for a solution — or at least the appearance of one — to a problem it created.
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Any increase in federal spending would be simply bizarre in any fiscal cliff deal. For that reason alone we should expect it to happen. And the dealmaking is likely to get a lot worse.
The vultures are already circling. One example already leaked is that some are advocating an increase to the federal gasoline tax. For every one of these vulture tax initiatives that is reported, there will be thirty we don’t hear about until after the deal is made.
The outlines of a fiscal cliff deal are easy to forecast, though the details are not. Obama is determined to raise taxes on the rich, and he will probably succeed. His success will be attributable to the urgency that Republicans helped build into the earlier legislation. If they hadn’t agreed to the last “if-then” deal in 2011, and hadn’t agreed to the automatic nature of the tax hikes in January, they might have avoided this mess. But now they have little leverage: Obama is newly reelected and the calendar is inexorably moving toward January.
Middle class taxes will rise as well, but will be hidden under various disguises such as the Obamacare taxes, dividend taxes, and such. To let the Republicans save face, the Dems will agree that it’ll all be stuffed into another pillow sack “if-then” deal.
The Republicans will agree to some tax hikes now in return for entitlement reforms that won’t take effect for years to come. The unions — who are demanding no change in entitlement programs — will feign outrage at one part of the deal that pretends to make future cuts knowing well that the Dems will not let them happen. And the entitlement program reductions — maybe in the form of “means testing” or indexing to lower rates — will be put off for five or ten years.
The Republicans will give up more than they should. “What else can we do?” they’ll wail. Actually, a lot can be done if they’re willing to take the risks that come from failing to make a deal. It’s a risk they have to take.
First and foremost, they have to refuse another “if-then” deal. Anything they agree to — which shouldn’t include any tax hikes or the expiration of any prior tax cuts — must all take effect now. To the extent that future cuts to entitlement programs and any other government spending are included, these cuts should have to take effect on a date certain. And — to prevent any Democratic backpedaling — the legislation should provide that any modifications to the entitlement reductions would have to survive a supermajority vote in both the House and the Senate. By so doing they can make any future action to cancel the cuts very hard to do.
The flip side of this is the sequestration problem. Even if the fiscal cliff deal changes sequestration for 2013, there are still nine more years of sequestration coming — automatically — unless the sequestration mechanism is changed. The Dems don’t want to stop sequestration on defense, but they do want to stop it on domestic programs. This isn’t going to be easy, but the Republicans need to repeal the whole sequestration mechanism so we don’t have to do this again and again.
And, lastly, the House Republicans need to keep in mind that come March, they’ll have to face another debt ceiling increase. They will have a lot more leverage then than they do now, so it’s important to not give in. It’ll be easier to force real spending cuts in the next round if — and only if — they are willing to risk a government shutdown. That’s the only real leverage they have, and — to date — they’ve been unwilling to take the risk.
A man of faith in a godless age is hitting Americans where it hurts.
Mr. and Mrs. American Spectator Reader, let P.J. O’Rourke talk sense to your kids.
In Britain, defending your property can get you life.
It won’t take long for conservatives to scratch this presidential wannabe off their 2008 scorecard.
Was the President done in by the economy, or by the politics of the economy?