Wednesday, December 19, 2012
Boehner's 'Plan B' End Run
In what can only be described as the counter punch of all time, Boehner put an "offer" on the table which puts Democrats into a very nasty predicament. He has proposed extending all the Bush tax cut rates for everyone under $1 million. Everyone above that line would see their taxes go back to the Clinton-era rates.
Forget for a moment that the "offer" is a joke; forget for a moment that it fails to tackle the sequestration cuts that are scheduled to kick in starting in January and that the debt-ceiling, which Boehner offered to take off the table, is now back on and just around the corner, politically speaking this move is nothing short of ingenious.
Think about it. Let's assume that he can get 218 Republicans to sign on to it - a tall order given that it still allows for rate hikes and the loonies on the A.M. radio dial are already up in arms - he will be able to pass a bill to extend the Bush tax cuts for 99% of the population. Assume also that the bill is dead on arrival in the Senate, as Harry Reid has promised, Boehner can now say that he got a bill passed that protected the overwhelming majority of people from higher taxes and it was the Democrats who blocked it.
Talk about a turn of events.
Obama can say, and rightly so, that he has the overwhelming majority of Americans behind him. He can also threaten Boehner that, if they go over the fiscal cliff, the best deal he can get will be significantly worse than the one he has now, which includes an extension of all rates below $400 thousand, entitlement reform and spending cuts equal to the sequestration requirements.
Of course the problem for the President is that Boehner knows all that and is still willing to call Obama's bluff. The take it or leave it "offer" from the Speaker is designed with only one objective in mind: to steal away the leverage Democrats currently hold in these negotiations.
If we do in deed go over the cliff, each week that goes by, voters will grow inpatient, not only with the gridlock in Washington, but their shrinking paychecks. The markets will have a field day as well as we approach yet another debt ceiling crisis. They are already beginning to freak out at the prospect of John Boehner's Plan B. As I mentioned in an earlier piece, Obama is the commander in chief. He has a far greater responsibility to prevent this circus from running amok than the lunatics who keep threatening to burn down the asylum.
A financial crisis and a double-dip recession occurring in the first few months of his second term would rule out any hope he has of carving out a legacy for himself.
The President must, at all costs, avoid that scenario. He must somehow work out a deal with his counterpart and do it before December 31st. Whether that means going slightly higher on the rates - say up to $500 thousand - and maybe raise the eligibility age on Medicare to 67, whatever. Just get it done. Yes, as usual, progressives won't like it. But swallowing a little bit of caster oil now is a whole lot better than what lies ahead for the nation if Boehner's stunt is successful.