President Obama is speaking today at 1:05 about the economy and (presumably) about the so-called “fiscal cliff” that will roll back the Bush tax cuts and implement serious cuts to several government agencies (including the DOD). Remember throughout all of this — the GOP and their Democratic deficit hawks have been publicly hand wringing about too much spending and too big deficits. Just letting these two things happen put a substantial dent into both. That’s just basic math. There’s not many hints as to where President Obama will take this conversation, but there are some hints.
- Let the tax cuts expire for everyone except for the people with incomes less than $250,000. He’s been consistent about this goal since 2008. I would vote for letting all of them expire, but if he talks about this exception, no one should be surprised.
- Senator Chuck Schumer has been out front and vocal on the tax cuts issue for a couple of months:
- Arguing for the abandonment of the Simpson-Bowles framework, noting that this is a bad point to start negotiating from —
“A 1986-style approach that promises upfront rate cuts to the wealthy is almost guaranteed to give middle-income earners the short end of the stick,” Schumer will say. “The reason is, in order to raise enough money to both reduce tax rates and cut the deficit, you would need to slash deductions and credits on a far greater scale than we ever did in 1986. Middle-income earners would not be spared.”
Senior Democrats are now openly acknowledging their plan to hold the economy hostage to massive, job-killing tax hikes, and espousing the fiscally irresponsible view that says the country should be driven off the fiscal cliff rather than Congress working toward bipartisan solutions to reform and strengthen entitlements without killing jobs. And he admits that Democrats don’t intend to reform entitlements or our tax code as a means to restore fiscal sanity, create jobs, or protect our seniors, but rather to use the effort as a lure to entice support for even more job-killing tax hikes. The Speaker and I have called for extending all the income tax rates for a year, ensuring that no one sees an income tax hike in January and preventing the economic harm and massive job loss that will come if Sen. Schumer and Washington Democrats follow through on their threats to drive us off the fiscal cliff. This uncertainty needs to be dealt with sooner rather than later. We need to find a way to deal with the sequester not by cutting a penny less, but by intelligently making the decisions that are necessary to keep our promise to reduce the debt by $2.1 trillion and to get our economy back on track.
- Harry Reid and the White House endorsed the Schumer goalpost-setting (and the Schumer disruption of the Gang of Eight effort):
“Senator Schumer is making is a very important point — that the wealthiest must pay their fair share in any balanced approach to reducing our deficit in a way that protects the middle class, seniors, and our ability to invest in education and innovation,” Carney said. “He’s making the very clear point that the President has made and others have made, that it is fanciful thinking to imagine that you can give more tax cuts to millionaires and billionaires and that the pixie dust of trickle-down economics will somehow erase any damage to the deficit or hold harmless the middle class.”
On the sequester, President Obama said in a debate, that “the sequester won’t happen“, and Republicans treated that statement as a gaffe, rather than a reminder of a bargaining chip.
So what will happen? What I want definitely *won’t* happen. But if Chuck Schumer has been the leading edge of the negotiating position, I’d be satisfied with that — who wants the Cat Food Commission anyway? — with the President holding the automatic sequester as the hostage. The wild card here is Democratic support — it is difficult to underestimate how badly Ds and Rs want to avoid DOD cuts that might eliminate jobs and programs and campaign funds from their districts.
You can watch the speech over at CSPAN. Also, WHYY will broadcast the speech live on the radio.
Feel free to use the comments here to live blog what you hear.