Great news, everyone! President Obama hopped off the plane from Hawaii with a fiscal cliff proposal in hand, according to outgoing Senator Scott Brown of Massachusetts – who, as the Hill reports, is on his way back to Washington to vote on it:
President Obama is offering a proposal to Senate GOP leaders that would prevent looming tax hikes and spending cuts, according to Sen. Scott Brown (R-Mass.).
Brown said in messages on Twitter and Facebook that he had “learned” of the proposal.
“Heading back to dc. Just learned that the Pres. reached out to Senate GOP leadership with a proposal,” Brown wrote on Facebook. “It is the first such proposal to be put forth. Eager to see why it is. How it is serious.”
While Senator Brown tries to riddle out why and how the President’s proposal is, the Hill gives us a peek at what it might be… and it sounds rather familiar:
It is not clear what is included in Obama’s proposal, but the president on Friday said he would reach for a smaller deal that would extend tax rates on annual incomes below $1 million while allowing rates above that threshold to rise. Obama also said he would seek an extension of unemployment benefits, but would put off broader entitlement reforms until next year, as well as a hike to the debt ceiling.
So it’s fundamentally similar to Boehner’s “Plan B,” with some more spending on unemployment benefits added in – because “deficit reduction” proposals should always include more spending! – but Obama now has the political cover to propose it, because Boehner failed to bring it to a vote.
Or maybe the Hill report is incorrect, because CNN says the President still wants higher taxes on people who make over $250,000, not $1 million. It’s more likely that we’ll end up somewhere between $250k and $1 million for our entirely symbolic tax increases. Then the government can merrily resume spending trillions of dollars it doesn’t have, until the magic of fiscal irresponsibility transforms people who make one hundred thousand dollars a year into “millionaires.”
We are supposed to have more details when a bill is presented to Congress on Thursday afternoon. It seems clear that the general spirit of Boehner’s Plan B approach is involved – a minimal compromise that will stave off tax increases on the middle class, and probably not much else. Of course, we’ve got the Treasury Secretary saying that swerving away from the fiscal cliff means we’ll smack into the debt ceiling. You can hit the ceiling by going sideways in Washington. It’s an M.C. Escher kind of place.
Preying upon many minds today is the threat of a looming recession, which isn’t really even welcome news for statists who otherwise care very little about the private sector. The psychological impact of the media-magnified “fiscal cliff” has grown beyond the considerable monetary impact of those middle-class tax increases, and morale is always a component of economic vigor. A recession would reduce net tax receipts to the Treasury, which would put tax-raising Democrats in a very uncomfortable position two years from now. Tax rate increases never bring in the promised amount of revenue, but throw a recession into the mix and the shortfall would become painfully obvious, especially to the keen senses of a recessionary electorate.
It’s all still about posturing and positioning, not actually addressing the nation’s fiscal crisis. Today Senate Majority Leader Harry Reid – who hasn’t passed a budget in four years, and vowed before the election to mindlessly obstruct anything a President-Elect Mitt Romney might have tried to accomplish – described the House of Representatives as a “dictatorship” of Speaker John Boehner. Boehner’s out of town at the moment; the Democrats are clearly hoping they’ll win the fiscal cliff musical-chairs blame game by being the last people pretending to sit at a negotiating table when the music stops. Too bad the public doesn’t insist on meaningful budgeting from the federal government any more, because that’s the only way they’ll ever get anything approaching responsibility, instead of theatrics.