Exploring caves in the United States is called caving or spelunking. In the United Kingdom and Ireland it is called potholing. Since Republicans are clearly caving with regard to the fiscal cliff, potholing seems to be a really good definition of the process. The proposal from Speaker Boehner is close to the worst case scenario for the country and the GOP. It really doesn’t fix anything and it starts us on the path toward raising taxes, in the worst possible way. This pretends to avoid raising taxes by keeping rates the same and “reforming deductions.” Please! Any proposal that increases the amount of tax paid is a tax increase. It would do less damage to just raise tax rates in the first place.
Part of the problem is that Republicans are buying into the argument that we can solve all our problems by only taxing the rich. This is been tried elsewhere and the only measurable result is fewer rich people. England raised tax rates on millionaires and actually lost tax revenue. The very rich can always find a way to avoid paying income tax. Our problem now is not that the rich aren’t paying their fair share; it is that half of the population isn’t paying any income tax at all. It is only when taxes impact everyone that everyone becomes interested in cutting expenditures.
A better alternative is the so called “doomsday” strategy proposed by some Republicans. The ABC blog explains this:
http://abcnews.go.com/blogs/politics/2012/12/republican-doomsday-plan-cave-on-taxes-vote-present/
It’s quite simple: House Republicans would allow a vote on extending the Bush middle class tax cuts (the bill passed in August by the Senate) and offer the President nothing more: no extension of the debt ceiling, nothing on unemployment, nothing on closing loopholes. Congress would recess for the holidays and the president would face a big battle early in the year over the debt ceiling.
The Obama negotiating strategy is to dare Republicans to do something he knows they do not want to do. Then he can blame Republicans for refusing to compromise. This would be calling the President’s bluff big time. He has often said he will sign such a bill “tomorrow.” At first it will look like a big victory for Obama, but ultimately he will totally own the results. Republicans can avoid the blame for raising taxes on the lower and middle class. It eliminates Obama’s only talking point.
Republican can then put the heat on Obama to come up with a real proposal to fix the deficit. Ok Mr. President, we just gave you the ball, let’s see if you got game! We gave you the tax increase you wanted, now what are you going to cut.
This is not a solution to our fiscal problems. It is not even a smart economic move. But it may be a very smart political move. Tax rates are going up and Republicans cannot stop that from happening. What they can do is make sure that Democrats get all the credit they deserve.
TDM