11.28.2012 0

Stepping over the tax cliff

By Rick Manning — Democrat Senators and President Obama have been spending a lot of time worrying about the so-called fiscal cliff, and you would think that they would be gushing with new ideas or even identified budget areas that could be cut.

But no, with the exception of Sen. Dick Durbin’s meek, entitlement discussion where he urged saving money but not changing anything about the program, little has been heard from Democrats beyond the standard demand that taxes be increased.

Into the breach, Republican Senators Lindsey Graham (R-SC) and Bob Corker (R-TN) broke ranks with other Republicans by announcing their support for plans to limit the total amount of tax deductions one can claim; effectively raising the amount of money some people would pay.  In Corker’s case, he has even gone so far as to introduce legislation that would raise taxes by more than a trillion dollars over the next 10 years using a combination of a deduction cap and other manipulations that would throw more people into higher tax brackets.

To put the fiscal cliff into perspective, since 2007, federal government spending has increased by more than $800 billion to a total of $3.54 trillion.   In that same year, the federal government received more than $2.5 trillion in revenues compared to just over $2.4 trillion in this past fiscal year 2012.

While revenues are down by about $113 billion since 2007, this is due almost entirely to the state of the economy, and not changes in the tax laws as the marginal tax rates paid by individuals have not changed since 2003.

However, federal government spending has changed since 2007.  Between stimulus, bailouts, dramatically broadened eligibility requirements for SCHIP and other social safety net programs as well as the massive expansion of unemployment benefit eligibility, federal government spending is up by almost 30 percent since 2007.

The trillion-dollar budget deficit is almost entirely due to this spending splurge, and yet while Obama and the Democrats remain silent, Sen. Corker manages to put a massive tax increase on the table as the starting point for discussion without any agreed upon offsetting budget cuts.

This is not only bad negotiating strategy, it is terrible politics.

Add on to that equation, Sen. Graham’s demand that entitlements be included in order to get his vote for tax increases, Republicans now effectively own both the tax increase and any changes to Medicare that result from the negotiations.

It almost appears that if Obama and Harry Reid just remain silent for a few more days, Congressional Republicans in their zeal to negotiate against themselves in the media might give them the election victory that was denied when Republicans retained control of the House of Representatives.

Rather than lay out plans to increase taxes by a trillion dollars, and then get harried by reporters on how the “offer” is too little, perhaps Republicans should shut up, stick to their principles and force the President to lead with concrete proposals.

After all, Obama is the one who claims that he has a mandate, so let him lay out in precise terms for everyone to see, exactly what he wants done.

Somewhat shockingly, even after these past four years, Republicans keep believing that Obama and the Democrats care if taxes go up, or even if defense cuts go into place.  They don’t.

They want higher, across-the-board taxes, and if the Republicans keep talking, Democrats will be able to convince America that when these taxes go into effect, it was the Republicans’ fault.

If this past election should have taught Republicans anything, it is that truth doesn’t matter in politics, the only thing that matters is who has the biggest megaphone.  The only way to silence Obama and Reid’s megaphone is by demanding that they present their solution to the fiscal cliff.  Force them to take the lead.

For three years, Reid has been unwilling to even produce a budget, let alone put Senate Democrats in jeopardy by taking hard stands on real fiscal issues.  By shutting up and forcing Democrats, who comprise two-thirds of the decision makers, to take ownership of the “crisis,” Republicans have a chance of both averting the crisis and the blame that will follow.

Of course, there is little chance of that happening.

Rick Manning is the Director of Communications for Americans for Limited Government.

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