Sunday December 2, 2012 5:02 AM
Why are Republicans playing the Democrats’ game that the “fiscal cliff” is all about
taxation?
House Speaker John Boehner already made the pre-emptive concession of agreeing to raise
revenues. But the insistence on doing so by eliminating deductions without raising marginal rates
is now the subject of fierce Republican infighting.
Where is the other part of President Barack Obama’s “balanced approach”? Where are the spending
cuts, both discretionary and entitlement: Medicare, Medicaid and now Obamacare (the health-care
trio) and Social Security?
Social Security is the easiest to solve. So you get a sense of the Democrats’ inclination to
reform entitlements when Dick Durbin, the Senate Democrats’ No. 2, says Social Security is off the
table because it “does not add a penny to our deficit.”
This is absurd. In 2012, Social Security adds $165 billion to the deficit. Democrats pretend
that Social Security is covered through 2033 by its trust fund. Except the trust fund is a fiction,
a “bookkeeping” device, as the OMB has written. Future benefits “will have to be financed by
raising taxes, borrowing from the public or reducing benefits or other expenditures.”
And draining the Treasury, as 10,000 baby boomers retire every day. Yet that’s off the table.
And on Wednesday, the president threw down the gauntlet by demanding tax increases now — with
spending cuts to come next year. Meaning, until after Republicans have fallen on their swords,
given up the tax issue and forfeited their leverage.
Ronald Reagan once fell for a “tax now, cut later” deal that he later deeply regretted. Dems got
the tax; he never got the cuts. Obama’s audacious new gambit is a raw partisan maneuver meant to
neuter the Republicans by getting them to cave on their signature issue as the hold-the-line party
on taxes.
The objective is to ignite the kind of internecine warfare on taxes now going on among
Republicans. And to bury Grover Norquist.
I am not a Norquistian. I don’t believe the current level of taxation is divinely ordained. Nor
do I believe in pledges of any kind. But Norquist is the only guy in town to consistently resist
the Democrats’ stampede for ever higher taxes to fund reckless spending.
The hunt for Norquist’s scalp is a key part of the larger partisan project to make the
Republicans do a George H.W. Bush and renege on their heretofore firm stand on taxes. Bush never
recovered.
Why are the Republicans playing along? Because it is assumed that Obama has the upper hand.
Unless Republicans acquiesce and get the best deal they can right now, tax rates will rise across
the board on Jan. 1, and the GOP will be left without any bargaining chips.
But what about Obama? If we all cliff dive, he gets to preside over yet another recession. Sure,
Republicans will get blamed. But Obama is never running again. He cares about his legacy. You think
he wants a second term with a double-dip recession, 9 percent unemployment and a gridlocked
Congress? Republicans have to stop playing as if they have no cards.
Obama is claiming an electoral mandate to raise taxes on the top 2 percent. Perhaps, but
remember those campaign ads promising a return to the economic nirvana of the Clinton years? Well,
George W. Bush cut rates across the board, not just for the top 2 percent. Going back to the
Clinton rates means middle-class tax increases that yield four times the revenue that you get from
just the rich.
So give Obama the full Clinton. And with what also lies on the other side of the cliff: 28
million Americans newly subject to the ruinous alternative minimum tax.
Republicans must stop acting like supplicants. If Obama so loves those Clinton rates,
Republicans should say: Then go over the cliff and have them all.
And add: But if you want a Grand Bargain, then deal. If we give way on taxes, we want, in
return, serious discretionary cuts, spelled-out entitlement cuts and tax reform.
Otherwise, strap on your parachute, Mr. President. We’ll ride down together.
Charles Krauthammer writes for the Washington Post Writers Group.
letters@charleskrauthammer.com
