Apparently Barack Obama’s fiscal cliff proposal is so one-sided, partisan, and ridiculous that Senate Minority leader Mitch McConnell says he “burst into laughter” during the talks on Thursday when Treasury Secretary Tim Geithner explained the Obama administration’s proposal to avert the fiscal cliff.
Geithner’s visit to his office left McConnell discouraged about reaching a “balanced” deal on tax hikes and spending reductions designed to prevent a shock to the economy in January. “Nothing good is happening” in the negotiations, McConnell says, because of Obama’s insistence on tax rate hikes for the wealthy but unwillingness to embrace serious spending cuts.
Geithner suggested $1.6 trillion in tax increases, McConnell says, but showed “minimal or no interest” in spending cuts. When congressional leaders went to the White House three days after the election, Obama talked of possible curbs on the explosive growth of food stamps and Social Security disability payments. But since Geithner didn’t mention them, those reductions appear to be off the table now, McConnell says.
This is what I’ve been saying all along. Neither side has been putting forth real spending cuts. If something has been put forth as a cut, it’s always been in proportion to the growth of spending and therefore not a real cut. It continues to grow spending.
In addition the Daily Caller reported that Obama wanted more stimulus and be allowed to control the nation’s debt ceiling. Neil Munro writes, “President Barack Obama has dramatically upped his demands in the fiscal crisis negotiations: He wants Congress to levy twice as much in extra taxes from Americans as he urged during the election campaign, give up its control over the nation’s debt limit, and fund an immediate $50 billion stimulus for his political priorities.”
“In exchange, Obama offered to consider,” Monro wrote, “but not necessarily accept — GOP proposals for cutting $400 billion from Medicare and other programs strongly favored by off-year voters.”
Geithner in this case demonstrates that he really doesn’t understand economics at all. In an economy that is struggling you don’t come in and burden the people with $1.6 trillion in tax increases and not cut spending.
House Speaker John Boehner said in a closed-door meeting on Wednesday, “We’ve staked out a principled position. It’s important that everyone in this room continue to be clear with our constituents about what that position is: We’re fighting for spending cuts. We’re fighting against increases in tax rates that destroy jobs. And we’re fighting for pro-growth tax reform and entitlement reform, the keys to economic growth.”
Well I certainly hope so, though I’m not sure with all the commenting on tossing the tax pledge to the wind by Republicans helps to give me a lot of confidence in just how hard the fight will be. However, I’ll wait and see.
According to Democrats that are involved in the process, they realize they will more than likely have to cave to cuts to entitlements in order to make a deal.
A top Democrat official said, “Republicans want the president to own the whole offer upfront, on both the entitlement and the revenue side, and that’s not going to happen because the president is not going to negotiate with himself. There’s a standoff, and the staff hasn’t gotten anywhere. Rob Nabors [the White House negotiator], has been saying: ‘This is what we want on revenues on the down payment. What’s you guys’ ask on the entitlement side?’ And they keep looking back at us and saying: ‘We want you to come up with that and pitch us.’ That’s not going to happen.”
With that said Obama’s most recent budget proposal demonstrates that he is unwilling to deal with real spending cuts.
One thing is certain at this point and that is according to Speaker Boehner “no substanitive progress” has been made.