On Revenues, Obama Has Just Begun To Fight

January 7, 2013

Senate Minority Leader Mitch McConnell tells us the tax issue is behind us and that we can now move on to spending. Really? What makes him think the GOP will succeed this time when it couldn’t last time?

The just-concluded fiscal cliff deal included no material spending cuts, which the GOP justified by saying it had achieved locked-in rates for most of Bush’s tax cuts, which would force Obama to seriously discuss spending cuts and entitlement reform as part of the upcoming debt ceiling negotiations.

But a White House memo announcing the deal said that postponing the sequester for two months “will give Congress time to work on a balanced plan to end the sequester permanently through a combination of additional revenue and spending cuts in a balanced manner.”

Does that sound as if the White House has satisfied its appetite for further “revenues”?

The memo is not the only evidence of Obama’s intention to further punish producers. After the deal, he said, “Cutting spending has to go hand in hand with further reforms to our tax code so that the wealthiest corporations and individuals can’t take advantage of loopholes and deductions that aren’t available to most Americans.”

We should be concerned because this deal didn’t just raise income taxes on the wealthy. It raised capital gains, dividends and estate tax rates, as well as phasing out the personal exemption and deductions for individuals making $250,000 and couples making $300,000, which can add up to serious dollars. What further squeezes does Obama intend to impose?

It wasn’t just Obama making threats of additional taxes, by the way. On CBS’ “Face the Nation,” House Minority Leader Nancy Pelosi said, “In this legislation, we had $620 billion … but that is not enough on the revenue side.” She said we must rid the tax code of unnecessary loopholes and “unfair” benefits that help those who don’t need it.

So much for the Democrats’ new attitude toward taxes. How about spending? Should we be any more optimistic that Obama will finally be willing to cooperate on spending and entitlement reform?

Though the last page of the post-deal memo casually mentions entitlement reform as an afterthought, the very first paragraph includes this sentence: “And this agreement ensures that we can continue to make investments in education, clean energy, and manufacturing that create jobs and strengthen the middle class.”

In Obama’s mind, tax rate hikes on the “rich” will provide him extra spending money to further tinker with the economy, redistribute wealth through spending allocations, waste billions more on green energy programs that private enterprise won’t support, and increase the federal government’s control over education. Obama has no interest in balancing the budget, even with tax hikes. He only views new revenues as a license to spend more.

So why do McConnell and House Speaker John Boehner think they’re now in a better bargaining position to achieve spending cuts and entitlement reform? Well, that’s just the question George Stephanopoulos asked McConnell on ABC’s “This Week.” “Are you prepared … to see the country default if the president won’t sign the spending cuts you demand?” asked Stephanopoulos.

McConnell replied that it shouldn’t get to that point — that the parties could begin working now and get a deal. He said: “It’s time to confront (our spending addiction). The president surely knows that.”

Seriously? Obama’s known this for years, so what has changed? Is McConnell saying that Obama will now be serious about cutting spending because he’s already achieved tax hikes on the rich, which we’ve already seen is a woefully unwarranted assumption? Or is he saying the GOP can finally expose Obama as a charlatan if he won’t agree to cut entitlements?

If it’s the latter, McConnell never said so, nor did he demonstrate how the GOP would be in any better position to make its case to the public than it has so far — which is to say, not at all.

I don’t grasp the thought process leading GOP leaders to believe either that Obama will now come to the table on spending and entitlements or that they would now be in a better position to expose his unreasonableness to the public if he were not to.

But maybe we’re making progress if (SET ITAL) they (END ITAL) finally believe they have some leverage and will be willing to use it. We will never convince the American public that Obama is bankrupting the country if Republican leaders don’t start making their case to the people repeatedly, obsessively, with multiple megaphones.

So more power to them if they’re going to be aggressive this time in articulating their case. We’re quickly approaching the point that we have little to lose with a government shutdown, because if we don’t cut spending and reform entitlements very soon, we’ll run out of this Monopoly money, and the government will go broke.

Please let us finally have this debate in public — a debate the liberal media will be forced to cover because it will happen in the context of a threatened government shutdown. Holding my breath.