Yesterday we told you that John Boehner’s Fiscal Cliff counter-offer to The White House was a brilliant move that helped put the GOP back in “the centre.”By offering some very vague ideas, ostensibly based on ideas put forth by Erskine Bowles, it helps the GOP regain some bipartisan high ground, while making The White House look like the side with the preposterous wish list.
Ben White of POLITICO — who has really nailed every turn of this fight — sees this as a strong move by the GOP, and now sees it as incumbent on The President to start getting serious and making concessions:
Despite the theatrical hyperventilation from the White House, the GOP offer is actually less fanciful than the original administration request, which included phony savings (the war wind-downs), a gratuitous fork-in-the-eye (unlimited debt ceiling authority) and some new stimulus (just to make GOP blood boil and warm liberal hearts). Now the GOP has laid down its own marker which does in fact reflect a significant shift on revenues (enough to make hard right groups squawk), even if not in the manner or amount the White House wants. …
The White House is being hit on other angles as well, particularly its insistence that a tax hike on the rich must be part of any deal. Given that the fiscal cliff is about avoiding austerity, insisting on tax hikes is a non-sequitur.
This has Josh Barro at Bloomberg View legitimately angry, slamming The White House’s “Fiscal Cliff Irresponsibility”:
After the Republicans’ counteroffer on the fiscal cliff today, ABC’s Jake Tapper tweeted a response from a senior White House official: “if GOP doesn’t agree to higher rates for top 2%, we’ll go over the cliff and the American people will hold them responsible.” This is a hugely irresponsible threat from President Barack Obama‘s administration.
As Ezra Klein puts it, the fiscal cliff is really an “austerity crisis” — without Congressional action, automatic forces will bring too much fiscal austerity, too fast.
So why is President Obama threatening to block any solution to the austerity crisis unless it includes tax rate increases on the top 2 per cent of Americans? A high-income tax increase doesn’t do anything to solve the austerity crisis; in fact, it’s a mild dose of austerity itself.
We can see The White House’s general notion, that if we must have austerity, then it shouldn’t be just spending cuts. But in terms of averting the crisis right now, it is dangerous to insist that we have to have taxes, or we don’t avoid austerity.
It is conceivable that a deal could be reached, whereby the GOP comes back to Obama and says: OK, you can have your payroll tax holidays, $50 billion in stimulus, and extended unemployment, but you can’t have your tax cuts. Then Obama would have to choose between maintaining stimulus in a weak economy, or passing higher taxes on the rich just… because. If it absolutely insists on the latter, when more stimulative options are available, that will be irresponsible.
Washington Post economics reporter Zachary Goldfarb nailed it in a tweet:
Photo: Zachary Goldfarb
NOW WATCH: Briefing videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.