Saturday, December 8, 2012

How Republicans Can Beat Obama on the "Fiscal Cliff" Issue

Barack Obama seemingly has Republicans trapped on the "Fiscal Cliff" issue. Pat Buchanan has an important column on how Republicans have been backed into a corner. He writes:
Which bring us to John Boehner's concessions to Obama to save us from going over the fiscal cliff.

Though a tax increase would violate party principle and a commitment to constituents just a month ago, and though Lord Keynes himself would argue that raising taxes in a limp economy is risky business, Boehner has offered Obama $800 billion in new tax revenues.

Yet, though Boehner is capitulating, the White House has backhanded his offer. The Clinton tax rates on the rich must be restored or no deal, says Treasury Secretary Tim Geithner. Obama takes a more moderate position. We must raise both rates and revenues.

The purpose here? Rub Republican noses in their capitulation, and force a rupture within their party.

While the administration could reap far more revenue by capping and cutting deductions – "tax expenditures" in the liberal catechism – an increase in tax rates would be such a transparent surrender it would cause a rebellion in the House and demoralize the conservatives.

Why, then, are Republicans still bearing gifts to Obama, with a few even pushing for concessions on tax rates?

They are terrified of the fiscal cliff, and understandably so.

For if we go over, taxes rise on every family, and polls say that by 2 to 1 the people will hold Republicans responsible.

And if we go over the cliff and taxes rise on everyone, the first order of business of Obama in the New Year will be to push a tax cut for the 98 percent of Americans who earn less than $250,000. His second move will be to reverse the damage done to the national defense by the sequester.

By his State of the Union address, Obama would be able to pose as the rescuer of the middle class from the abyss into which the GOP had plunged it – to prevent fat cats from paying a fair share for debt reduction.

And he would be able to pose credibly as a peace-through-strength Democratic president determined to restore deep cuts in defense caused by a congressional sequester.

At the end of the Battle of the Fiscal Cliff, the GOP may be left in the position of the lady who sold her virtue – and didn't get paid.

By Jan. 31, the GOP may have double-crossed its Tea Party allies by accepting increases in tax revenues and rates, and alienated its strongest supporters, seniors, by demanding and winning freezes and cuts in future Medicare and Social Security benefits.

If Republicans cut a deal on tax hikes to prevent our going over the cliff, they look like collaborators. If they refuse to cut a deal, the Bush tax cuts are history and the GOP will be forced to enact the new "Obama tax cuts."

The Republican Party seems close to the end of its tether.
But there is path around the Obama trap. The problem is the Republicans, as Buchanan points out, are playing Obama's game in debating between changes in tax rates versus cuts in tax deductions, which as I have previously pointed out, is still about raising taxes, the tax increase just comes from different lines on tax forms.

If Republicans were serious about cutting government down to size and really taking on Obama, there is a way. Instead, of posturing on tax rates versus changes in tax deductions. And instead of trying to smash entitlement changes immediately down the throats of Americans, the Republicans should start talking other cuts in government, every time taxes and the fiscal cliff are raised by the media.

To every question about tax increases and changes in tax deductions, the response should be, "Well, there is a different way to shrink deficits and that is by shrinking government."

In response to Obama calling for more tax revenues, the Republicans should call for cuts in government spending and tax revenues. Where are the cuts going to come from, if not entitlements? The heavy lifting on finding and structuring the cuts has already been done. Ron Paul has written up the plan and he introduced it during his run for the 2012 presidential nomination of the Republican party. Here's Ben Swann describing Ron Paul's plan:

RP's plan cuts even more than what Swann details. He would also cut Environmental Protection Agency spending by 30 percent and the Food and Drug Administration would see a 40 percent cut and foreign aid would be zeroed out immediately.

Medicaid, the Children’s Health Insurance Program, food stamps, family support programs and the children’s nutrition program would be block-granted to the states and removed from the mandatory spending column of the federal budget.

Mitt Romney lost the election partly by dissing the Ron Paul movement. If he was a skilled politician, rather than just an establishment frontman, he would have used Ron Paul voters and their energy to help him gain the White House. Instead, his crony advisors cry, over their last Romney pay checks, about Obama tricks that did them in. And Romney gets humiliated in a trip to the White House as Obama serves him white turkey chili.

Buchanan is correct, Obama is now about to carve up the remainder of the establishment Republican Party. Like Romney, they may be in too much of an elitist cocoon to understand how out of touch they are with average voters and how dangerous their position is.

Their only chance is to do what Romney failed to do, and that is embrace the one source of energy, light and hardcore principle that is relatively small but very strong, the Ron Paul movement. The old establishment ways of simply pretending to be small government advocates is getting old. The public is sick of that tune. A hike in taxes, either through an increase in rates or a change in deductions is likely to push the Republican Party in to a danger zone, it won't exactly be the Fiscal Cliff, or the the Khumbu Icefall at Mount Everest,  it will be more like a Boehner Crag.

That Boehner is attempting to get Republicans to climb up this crag with only establishment insider themes is evidenced by the recent purge of the libertarian and near-libertarian types from key committee appointments, bad move. It's a Romney type move and it is a dangerous way to climb up a crag. 

Boehner is positioning himself and the Republican Party for a bad fall. Survival is not assured.

Boehner may not be able to advance the Ron Paul plan in its entirety, but that should be the direction he should be going in, it changes the debate, awakens the public to other options and it is a principled move.  And, it is very unlikely to happen, Boehner is too establishment, Obama wins.


  1. Better to let the Republican Party die so that the Phoenix (RP) of liberty may rise up from it's ashes. Let's keep cheering and sounding the death knell.

  2. Here's how the Republicans could rise like Phoenix from the ashes.


    Don't bend on spending and become the anti-war party. Where will warmongers go? The Democrats? Let them. Resist the NDAA, CIA, FBI, Defense Department, and the wars. Watch the polls rise.

  3. Boehner's House simply shows how bought off he and they are. The only cure is to cut government spending, reduce the money available. Nothing else will do any good.

    Oh, and some will say the amount of money that funds government agencies, departments, non-entitlement stuff is small when compared to entitlements and military. Technically that may be somewhat true, but the growth of bureaucracy is poison, it has a horrible impact way beyond how much is paid for it directly.

    America is now 'managed' by bureaucrats and the Federal Reserve, it is UGLY!

    At some point it really matters not what Boehner, the Fed, Obama, others do; the spending, fiat money system, managed economy corruption is so totally out of whack it will force massive societal change.

  4. Bob Taft and Barry Goldwater died years ago and Ron Paul is retiring. I wasn't aware that any other elected republicans *wanted* to decrease the size of government.

  5. You might as well ask a goat to fly. The Ron Paul plan also outlines massive military cuts and reduction in "the global footprint." That is eminently sensible but no republican wants to do it. Their base is mostly militarists and jingoists. They *WANT* to fight wars with shiny new weapons. They just want to do it for free.

  6. Better to let the Republican party die so that another party hospitable to the anti.war, anti welfare, anti state, liberty loving people can replace it. There's no hope repeal it. This new party will also draw from the Democratic party. Huh rah!

  7. While I agree with Mr. Wenzel that Ron Paul's plan is where the discussion should begin, it is clear that this will never happen. An alternative for the Republicans would be:

    1. make all tax cuts that expire at the end of this year permanent
    2. using numbers from the CBO (I realize the problems with CBO numbers, but this is how the game is played in DC), compute the revenue shortfall due to part 1 plus the automatic spending cuts
    3. eliminate the targeted spending cuts
    4. add up the numbers from part 2
    5. reduce government employee salaries across the board to equal the numbers from part 2.

    The idea is to achieve deficit reduction on the backs of government workers. The Republicans should propose this plan and point out that the pay and benefits of the average government worker is greater than those of the average private sector worker and the gap is increasing. Thus, the fiscal cliff is averted and Obama and the Democrats would have to either accept this or position themselves as the champions of government bureaucrats versus the American people.