John Boehner is doing what his caucus elected him to do by saying that his party won’t raise taxes. But he’s actually being pretty canny about it. After saying to Politico that the House GOP had a “mandate to not raise taxes,” today he’s changed the language somewhat. Now he’s just against higher tax rates:
Boehner is dashing back to his elusive grand deficit bargain with President Barack Obama: he’s willing to raise revenue — heresy for some Republicans — but is insisting it come from reforming the tax code to ensure “fewer loopholes, and lower rates for all,” and entitlement reform. In the post-election lame-duck period of governing, Boehner wants a “down payment” — likely a show of good faith for the massive legislative dealing ahead.
So this is the “lower the rates, broaden the base” approach that Chuck Schumer rejected before the election, and I see nothing in the results that would force him to rethink that – there’s a stronger electoral and ideological majority for Democrats in the House.
Reid backed Schumer today:
Reid, for his part, said the American people sent the message that rich Americans must pay more to help pay down the debt. Tweaks to Social Security, Reid emphasized, aren’t in the offing.
“People making all this money have to contribute a little bit more,” Reid said in an afternoon news conference in the Capitol. “And all the exit polling, all the polling we’ve done, the vast majority of the American people support that, including rich people.”
There was some thought that a bargain could be had with higher tax rates on the rich for some kind of concession, perhaps on Social Security. The door is shut as far as Reid is concerned, but the President will probably have more of a say on that.
This is all really academic if Democrats just let the tax rates expire. Then, the only choice for Boehner is the size of a tax cut. He’s in no position to demand anything on tax rates, because they’re on the way out by virtue of inaction. Democrats may be swayed by elites to “avoid the cliff,” but the truth is they can completely avoid any macroeconomic consequences for several weeks, shifting the leverage and putting Republicans completely on the defensive. It will merely take political will.
The one arrow in Boehner’s quiver is the debt limit, and that’s going to be another disaster. He’s still touting the “Boehner rule” of a dollar in “cuts or reforms” (no taxes) for a dollar of debt limit increase. Minting a $2 trillion coin never looked so good.