Why Obama Rejected Boehner's Tax On The Rich Proposal

When the Speaker of the House, John Boehner, offered a proposal to raise as much revenues on the rich by closing loopholes and by eliminating and capping certain tax deductions as would have been achieved by raising the tax rate, Obama flat out rejected it.  Certainly, any logical person would conclude that it doesn't matter how we get the increased revenues from the rich as long as those revenues are equal to or greater than the targeted amount.  But, Obama isn't thinking that way.

You see, the President's insistence on raising the "tax rates" on the rich is more about politics than any amount of money being collected.  He wants to be able to easily campaign on the fact that the rich are paying higher taxes by simply pointing to this or that rate being increased.   Boehner's salad bowl mix of tax increases is just too complex and too difficult to explain and prove and not conducive to Obama's continual need to give campaign speeches touting his achievements.  Simply, Obama's political left supporters would just find Boehner's tax increases too hard to understand. 

Obama's Jabberwocky-Speak On Debt Reduction

According to Barack Obama, we need $1.6 trillion in tax hikes on the rich in order to reduce our deficits and debt.  The trouble with that $1.6 trillion number is that it is over a 10-year period.  When broken down, he's only talking about $160 billion in new revenues.  At the very same time, he also said that we need at least $255 billion in new spending to stimulate the economy and the housing market.  On top of that, the first month of the current fiscal year, October, saw federal spending up by 16% or a total of $42 billion. If that trend continues, we could see increases up by another 1/2 billion dollars.

Simply, all this talk by the President is Jabberwocky-speak.  He speaks complete nonsense on the fiscal state of our federal government.  Those new taxes will do nothing to stem the tide of massive new spending. At same time, he is totally unwilling to put any real spending cuts on the table.

--- Reuters News: Budget deficit rises to $120 billion in October: http://ca.news.yahoo.com/budget-deficit-rises-120-billion-october-190237736--business.html

--- Yahoo News: President Obama's opening offer in 'fiscal cliff' talks includes $255 billion in stimulus spending:  http://news.yahoo.com/why-obama-pushing-stimulus-fiscal-cliff-deal-video-033547060.html

The GOP Can't Win The Fiscal Cliff Negotiations

Abraham Lincoln once said: "In this age, in this country, public sentiment is everything. With it, nothing can fail; against it, nothing can succeed."

In a new Washington Post/Pew Research poll, 53% of the respondents said that they would blame the Republicans if the Fiscal Cliff negotiations fail. Only 27% said they would blame Obama.  In other words, public opinion is siding with Obama on his solution to stave off the Fiscal Cliff; include tax hikes on the rich.

The problem is that the Republicans have lost the public relations war.  Just as Obama won the election, he has also won on this issue.  For him, the win was simple.  He has the presidential bully pulpit to paint the GOP as only being concerned about the rich and, he had a liberal media that sided with him.  Now, his is a position of strength and, the Republicans, even if they continue to stand on principal, will ultimately lose in the end.   The GOP know that tax hikes on the rich will weaken the economy but people just don't believe it.  Only if the tax hikes are passed and the economy falters will the American public finally realize that the President is wrong to hike taxes on higher-end earners, businesses, and entrepreneurs.

--- Pew Poll: http://www.washingtonpost.com/page/2010-2019/WashingtonPost/2012/12/04/National-Politics/Polling/release_181.xml

So Much For A Balanced Approach To Debt and Spending: Obama Want's a Blank Check

Throughout his reelection campaign, Obama spoke of having a balanced approach -- spending cuts and tax increases -- to solve the nation's debt problem.  Now that the election is over and Obama won: "Forget about it!"

Instead, Obama's approach is taxing the rich by twice the amount that he ran on before the election.  Then, too, he now wants a new stimulus program; extended unemployment benefits; a renewal of the Make Work Pay payroll tax cut; another shot at mortgage relief; and, billions more to insure doctors get paid under Medicare.  Not one spending cut.

But, the big signal that the "balanced approach" is being thrown under the bus came when his representative, Treasury Secretary Tim Geithner, told the GOP leaders that he wants an abandonment of the federal debt ceiling.  In other words, he wants a blank check to spend without Congress' approval.  Does that sound like someone who is even interested in cutting any spending?

The U.S. has already seen its credit-rating-downgraded when the debt ceiling limit was raised the last time around.  What do you think will happen when the debt ceiling is completely eliminated?  You can just kiss the value of the U.S. dollar goodbye!

--- CNBC.com: Tim Geithner’s Bad Idea on the Debt Ceiling: http://www.cnbc.com/id/50027858

On The Fiscal Cliff Negotiations: Obama Has Now Become The Community-Organizer-In-Chief

You would think by now, that most Americans would understand that the man occupying the White House, Barack Obama, has no leadership skills and is completely incapable of negotiating anything.  That's why there has been nothing but gridlock for the last 2 years in which he hasn't had complete control of Congress.  You see, this President avoids negotiation at all cost.  He would prefer to use executive orders rather than try and get a divided Congress to agree with him.

Now, the country is faced with the infamous Fiscal Cliff and where is the President?  He's M.I.A.  Sure, he had one meeting with Congress on the topic; but, that only came after he met with like-minded union leaders and left-wing organizations like MoveOn.org, and sympathetic business leaders that he was completely comfortable with.  Obviously missing in any of those meetings was the U.S. Chamber of Commerce; a group that represents more than 3.3 million businesses and businessmen in this country and whom would be greatly hurt by any tax increases.  But, you see, to invite the Chamber of Commerce would probably set up a face-to-face debate over the tax increases on the rich; and, Obama has no intention of debating the subject.

Of course, when he "did" have that one-and-only meeting with Congressional leaders on avoiding the Fiscal Cliff, he was sure to have it in front of the cameras; further, making it quite sure that the American public could hear that he had an expressed willingness to negotiate and work with the Republicans. Naturally, everybody was seen smiling at the end of the meeting with renewed hopes of cooperation.  But, that was then and this is now.

On Wednesday, he clearly signaled that he lied about his willingness to negotiate.  He did that when he held a rally in Washington where he called on his supporters (and, I guess, hopefully some non-supporters) to use a Facebook and Twitter campaign to force the Republican House members to agree with his belief that only the tax cuts on the rich should be allowed to expire on January 1st.  Using the recently established hash tag of #My2K, the President clearly signaled that he's wants the people -- his people -- to do his bidding; and, this is so like him, a former community organizer. In essence, this Facebook/Twitter campaign is signalling that any negotiations with him are over (as if they had even really taken place).

Basically, Obama is attempting to use one of the primary tactics of all community organizers: The mobilization of people in a community to either picket or have sit-ins or writing campaigns to publicly embarrass or force businesses to cede to the demands of the organizers.  Never are there any prior negotiations.  Clearly, this #My2K is a new form of that old tactic; making Mr. Obama the Community-Organizer-In-Chief and clearly proving, again, that he is a man has no true negotiation skills.

--- Chicago Sun-Times: Lynn Sweet:  Obama on Fiscal Cliff: Facebook, Tweet ( #My2K) your congressman. Transcript: http://blogs.suntimes.com/sweet/2012/11/obama_on_fiscal_cliff_facebook.html

A Mexican Standoff On The Tax Cuts For The Rich Could Cause All The Bush Cuts To Expire

In the old West, when you had three bandidos confronting each other in anticipation of a gunfight, it typically resulted in nothing happening because each of those men knew that, if they drew first to kill one of the gunslingers, the other would kill them.  That failure to fight is commonly referred to as a Mexican Standoff.

In a strange way, a similar thing might just happen with regard to the expiration of the Bush tax cuts on January 1st.  Our three bandidos, in this case, are the House of Representatives, the U.S. Senate, and President Obama.  But, instead of thinking about who will draw first, in this scenario, we're talking about who will "cave first" on their particular stand on extending the Bush tax cuts for the rich.

The House of Representatives is majority controlled by Republicans and is in favor of either extending all the Bush tax cuts -- including those for the rich -- or, even making them permanent.  Over in the Senate, the Senate Majority Leader, Harry Reid, is all for Obama's push to extend the them for everyone but the rich.  In fact, following the reelection of Obama, Harry believes he now has a mandate from the people to raise taxes on the rich.  Further, Patty Murray, also part of the Democratic leadership in the Senate, has gone on record and threatened that, if the Republicans continue to push for keeping the tax cuts for the rich, her party is prepared to let them all expire; increasing heavy tax burdens on all Americans.  Then, too, the President -- a clear advocate for increasing the taxes on the rich -- says he will veto any bill that comes to his desk and doesn't include raising taxes on individuals making in excess of $200,000 and families with incomes above $250,000.

So, there's our standoff.

Unless the Republicans cave, it just might be possible that the Democrats of the Senate will allow all the Bush tax cuts to expire by not voting on any extension of any of the cuts; leaving Obama out of the "apparent" loop on this because there will be no bill for him to either veto or sign into law.  In fact, Obama might just secretly favor this inaction; thinking he could use it as a mid-term, 2014 election issue by blaming the Republicans for the increases.  At the same time, increasing all the tax rates would help him out of the deficit hole he's created.  Of course, raising taxes at this time would also send this country spiraling into recession.

I personally think that there are enough Democrats in the Senate who probably believe that raising taxes on the rich, during this weak economy, is a bad idea and they will force Obama, Murray, and Reid to accept a year's extension of the Bush tax cuts in their entirety.  But, we'll just have to see.

--- New York Times: Senator Murray Says Democrats Will Let Tax Cuts Expire: http://thecaucus.blogs.nytimes.com/2012/07/16/senator-murray-says-democrats-will-let-tax-cuts-expire/