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  • Fiscal Cliff: Decoupling Conservatives from Their Core Principles

    There are many ways to surrender—and some congressional Republicans seem bent on exploring them all.

    In the debate over the fiscal cliff, the President’s position is simple: The Republicans must capitulate on income tax rate hikes, and all other serious issues are not up for discussion.

    Never mind that Obama already raises taxes on upper-income taxpayers through the 3.8 percent Medicare surtax imposed under Obamacare. Never mind that the tax hikes will weaken an economy stumbling so badly that the Federal Reserve announced it would double its efforts to keep the economy from recession. Never mind that Obama’s approach likely puts the kibosh on any hopes for individual or corporate income tax reform. Never mind that the revenues from the tax hikes are a small drop in a very big bucket compared to projected budget deficits.

    In his view, President Obama ran for re-election on, and now has a mandate for, raising income tax rates. In fact, his mandate is solely to continue to press his case. Ours is not a parliamentary system, and Obama is not the prime minister. And so he faces the pesky reality that House Republicans ran opposing higher tax rates and that they, too, were returned to Washington in the majority to press their case. Their mandate is no greater, but certainly no less, than Obama’s.

    House Speaker John Boehner (R–OH) made a terrible mistake in both policy and approach in offering up a plan to resolve the fiscal cliff featuring a huge tax hike coupled with woefully inadequate spending cuts and entitlement reforms. Obama’s response? Nothing. The silver lining is that at least Boehner made clear, then and since, that raising tax rates is off the table.

    Now, however, worrisome rumors of two different “decoupling” plans are swirling through the halls of Congress. Both plans constitute a clear path toward surrender on conservative principles.

    The gist of the first “wash thy hands” plan is simple enough. Some tax hikes threatening on January 1 fall on upper-income taxpayers and small businesses, but the vast bulk of the tax hikes fall on everyone else. So the House would bring up two distinct bills for votes. The first bill would prevent the tax hike for upper-income individuals and small businesses, papered over with certain whimperings as to how the issue could be considered again as tax reform; the second would prevent a tax hike for everyone else.

    Presuming both bills passed the House, the Senate would then take them up. As the second bill—the second, everyone-else bill—is essentially what the Senate has already passed, its repeat passage is assured.

    Not coincidentally, the Senate has already voted to allow taxes to increase for small businesses and upper-income taxpayers and would presumably do so again. Thus the President gets his tax rate increase and the wobbly Republicans hope they can wash their hands of the matter.

    True, Republicans who oppose raising taxes could vote to stand by their principles, but this maneuver succeeds only if the House Republican leadership permits it.

    The second “protect small business” plan would decouple in a different way. Small businesses usually pay tax through the individual income tax. The idea is to tax them separately, thus allowing income tax rates to rise for upper-income taxpayers while keeping rates where they are for small businesses.

    The technical problems arising from the “protect small business” decoupling plan are obvious and likely prohibitive for now. The greater problem with the “protect small business” plan is not the decoupling itself as much as that its sole purpose is, once again, to pave the way for Republicans to capitulate on income tax rates.

    Taking a step back, both decoupling approaches demonstrate that, once again, Republicans are busy negotiating with themselves the terms of their surrender. The President is rightly blamed for not negotiating at all, but under the circumstances, with the other side so busy finding creative new ways of caving in to his demands, Obama’s stonewalling is equally irresponsible and understandable.

    Aside from his one great mistake in offering up his own tax hike, Speaker Boehner has to his credit repeatedly nailed the central issue in the entire fiscal policy debate—an issue that would surely get more attention if so many Republicans weren’t falling over themselves in a rush to wave the white flag: Mr. President, where are your entitlement reform proposals? We’re still waiting.

    Posted in Obamacare [slideshow_deploy]

    12 Responses to Fiscal Cliff: Decoupling Conservatives from Their Core Principles

    1. Whys says:

      Whine whine whine, boo hoo hoo. You lost; Suck it up. You don't represent the majority and you barely represent America.

      • Stirling says:

        and you sir do not understand what your "majority" really stands for.. If you truely did, you would not be so arogant about the path that you follow knowing where it eventually leads.. No "Free" Country ever has 100% support for any elected official (as you should know). Those that do are found in dictatorships, Totalitarian Regeims, and Monarchy where tyranny is rampant, and freedom is a dream (not reality).. We used to be all Americans, but you and most liberal media outlets have turned this into a "you v.s me" schoolyard namecalling game.. how inmature.. and unbecomming of our great country..

      • You might also note that on spending, taxes, indeed all economy issues, voters preferred Romney over Obama. Obama won on cult of personality. That's it. He did everything possible to keep voters from looking too closely at his actual programs, and thanks to Romney's diffidence he succeeded. But Obama is far from having a real majority on core issues facing the country. The sooner he — and you — figure that out the better off we all might be.

    2. Attila says:

      Maybe conservatives should take a new tack. Instead of debating and losing each vote buying scheme by the left, fall back on Constitutional legality.
      Since the only real authority granted the federal government by the Constitution is for national defense, diplomacy and regulating duties among the states (original intent of the Commerce Clause), that leaves around 80% of federal expenditures open to question. Cutting funding to politically protected programs rarely works as a permanent fix, but ending the program would. "It is a fine idea, but not legal for us to continue as we have no authority in this area. The states are free to carry on, and we will phase out the program over three years so that they can take over if they so choose." Of course many states would not choose, and citizens would relocate to states with free markets from those states with a heavy hand, functioning as laboratories just as the nation's founders intended.
      Programs like Social Security, Medicare, and Medicaid also fall outside federal authority, but the first two have a contractual basis based on individual contributions. Reforming them by means testing is an unwholesome Marxist idea, but phasing in individualized programs administered by private companies like insurance would allow the federal government to unload them. As for Medicaid, essentially a welfare scheme, the states would do well to take it over completely, avoiding unfunded mandates and gross inefficiencies from unnecessary layers of overpaid bureaucracies..

    3. BamaReb says:

      Get rid of Boehner we ned some one with guts not a coward who's goals are the same as the fool Obummer. Stand and fight no matter what happens do not give in to this fool.

    4. Ted Crawford says:

      I see NO way for America to win! The outcome that would best serve Obama's agenda would be, of course, to fall off the 'cliff'! He can effect a negative outcome with both the Economy and the National Defense with a simple stroke and blame it on the Republicans!
      If Boehner and the RNC cave on the taxes, with the Economic downturn assured all he needs to concentrate on is weaking the National Defense, probably largely through Executive Orders!
      The Republicans might achieve a sort of Pyrrhic Victory by using an Obama tactic and voting "Present". Either way America loses!
      It's taken almost exactly 100 years from the moment of our first major tactical blunder (March 4, 1913), till the final nail will be inserted into the Coffin of our Republic on January 21, 2013!

    5. Mary/Atlanta says:

      Congress could present a bold measure where everyone is taxed on their consumption and not their income. This may work very well in an economy with 8% unemployment and a large segment of society reaching retirement. The current "income tax" model may have outlived it's functionality. Everyone would pay their "fair share"! What a wonderful idea. This would also fund the fed. gov., social security and medicare. Couple this with responsible spending (yes we must demand responsible spending) and spending cuts and there is no cliff. There is no compromise. There are no tax hikes that would target businesses. Just a Fair Tax.

    6. Mike says:

      "The greater problem with the “protect small business” plan is not the decoupling itself as much as that its sole purpose is, once again, to pave the way for Republicans to capitulate on income tax rates."

      How pathetic. No, the "problem" with the "protect small business" plan is that it reveals Republicans for what they are: NOT pro-small-business, but pro-rich. You wanna be pro-rich and anti-middle-class? Fine. You're doing a great job (and the country is taking notice). But don't try to pretend that you're just trying to defend small business. Because the decoupling *would* do that. Too bad for you, it would also reveal your lies.

      By the way, I'm part of the 2% who is going to get hit by increased taxes. I'm not thrilled at the prospect, but I'm not going to lie about it and hold my breath until my face turns blue. Thank God some grown-ups have entered the room, and it looks like Boehner is one of them.

    7. J Pro says:

      I say, the republicans should stand tall like a steel pillar. Some how get Boehner a pair to stand up to Obama. Boehner needs to show some guts, look Obama and the rest of the democrats in the eye, tell them that what they are asking or demanding is not going to pass the house. Also, it is the republican house that will tell the democrats how the outcome will be.

    8. J Pro says:

      Isn't this just lovely, this site puts up an area for us to express our thoughts and in return we get:
      Your comment must be approved by the site admins before it will appear publicly.

    9. Blair Franconia, NH says:

      Maybe not. If Obama was smart, which he isn't, he'd settle for 80% of the loaf, like Reagan did. Instead, he wants
      100% of the loaf. What does that mean? It means he'll get NONE of the loaf. That's fine with him. Like Michael
      Corleone, his best offer is no offer. What am I bid? A BIG, FAT, GOOSE EGG.

    10. ScatCat says:

      Larry Klayman a former Justice Department prosecutor and the founder of Judicial Watch and Freedom Watch. Recently wrote an article titled; "How to stop an ineligible,president" This article clearly explains how the Republican party can object to the electoral vote an thus start an inquiry to the eligibility of Barack Obama to be president of the United States. The article can be found at http://www.wnd.com/2012/12/how-to-stop-an-ineligi… Contact your Senators and Congressmen/women and urge them to use this come January 6, 2013.

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