UPDATED: Time to Walk Away?
A bad day for the "fiscal cliff" negotiations. Essentially, the Obama "compromise" calls for $1.6 trillion in new taxes, a massive new stimulus spending plan, and an end of debt ceiling in exchange for bupkus. There are some nebulous suggestions of spending cuts in the future, but no guarantees.
That's not an offer. That's spiking the football in the GOP's face.
It also makes you wonder where all of the media-spun "optimism" about these talks came from.
The White House this week finally explained just how serious it is about averting a fiscal cliff that could throw the country back into a recession. The answer: not serious at all.
The markets and the media in recent days have been operating on an optimistic belief that the administration simply will not let the country fall off the fiscal cliff. They'd best rethink. On Thursday, the president dispatched Treasury Secretary Tim Geithner and White House Director of Legislative Affairs Rob Nabors to Congress to finally outline the White House's offer to avert the coming tax hikes and sequester.
It was something out of Wonderland and Oz combined.
The offer was so ludicrous that senate Minority Leader Mitch McConnell reportedly laughed out loud. Both Congressman Jim Sensenbrenner and columnist Charles Krauthammer are saying that it's time for the GOP to walk away from a bad deal.
MILWAUKEE - Menomonee Falls Congressman Jim Sensenbrenner says it would be better to let the country fall off the fiscal cliff than to agree to a deal that doesn't reform entitlements.
"We have a spending problem. Unless we address the spending problem, which is driven by the growth rate of entitlement programs, we're not going to solve the deficit and the debt problem," Sensenbrenner told Newsradio 620 WTMJ's Charlie Sykes.
The Congressman points out that simply raising taxes is only a short term fix. That's because the cost of entitlements will continue to rise if they aren't reformed. "A bad deal is worse than no deal and going off the cliff," Sensenbrenner said.
Sensenbrenner says it's important to address the spending first. Some Republicans have signaled they're willing to go along with some tax increases. But, they say that's only if there is also entitlement reform.
CHARLES KRAUTHAMMER: It's not just a bad deal, this is really an insulting deal. What Geithner offered, what you showed on the screen, Robert E. Lee was offered easier terms at Appomattox, and he lost the Civil War. The Democrats won by 3% of the vote and they did not hold the House, Republicans won the house. So this is not exactly unconditional surrender, but that is what the administration is asking of the Republicans.
This idea -- there are not only no cuts in this, there's an increase in spending with a new stimulus. I mean, this is almost unheard of. What do they expect? They obviously expect the Republicans will cave on everything. I think the Republicans ought to simply walk away. The president is the president. He's the leader. They are demanding that the Republicans explain all the cuts that they want to make.
We had that movie a year-and-a-half ago where Paul Ryan presented a budget, a serious real budget with real cuts. Obama was supposed to gave speech where he would respond with a counter offer. And what did he do? He gave a speech where he had Ryan sitting in the front row. He called the Ryan proposal un-American, insulted him, offered nothing, and ran on Mediscare in the next 18 months.
And they expect the Republicans are going to do this again? The Republicans are going to walk on this. And I think they have leverage. Yes, for Congressional Democrats it will help them in the future if Republicans absorb the blame because we will have a recession. But Obama is not running again unlike the Congressional Democrats. He's going to have a recession, 9% unemployment, 2 million more unemployed, and a second term that's going to be a ruin. That is not a good proposition if you are Barack Obama.
House Republicans said on Thursday that Treasury Secretary Timothy F. Geithner presented the House speaker, John A. Boehner, a detailed proposal to avert the year-end fiscal crisis with $1.6 trillion in tax increases over 10 years, an immediate new round of stimulus spending, home mortgage refinancing and a permanent end to Congressional control over statutory borrowing limits.
The proposal, loaded with Democratic priorities and short on detailed spending cuts, met strong Republican resistance. In exchange for locking in the $1.6 trillion in added revenues, President Obama embraced the goal of finding $400 billion in savings from Medicare and other social programs to be worked out next year, with no guarantees.
He’s either indifferent about going over the cliff or now actively wants it to happen, and since he knows he can count on the press to scapegoat Republicans when it does, he’s decided to shoot for the stars with his “offer” and see how desperate Boehner is. Is the GOP sufficiently nervous about being called enemies of the middle class if a deal isn’t reached that they’ll cave on tax hikes on the rich in exchange for some smaller bundle of concessions, with this insane package the only other alternative on the Democratic side? That’s what O wants to see.