Mitch McConnell, the Senate Republican leader, says he “burst into laughter” Thursday when Treasury Secretary Tim Geithner outlined the administration proposal for averting the fiscal cliff. He wasn’t trying to embarrass Geithner, McConnell says, only responding candidly to his one-sided plan, explicit on tax increases, vague on spending cuts.
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.
Obama is pushing to raise the tax rates on couples earning more than $250,000 and individuals earning more than $200,000. But those wouldn’t produce revenues anywhere near $1.6 trillion over a decade.
In fairness, President Obama’s unwillingness to embrace “serious spending cuts” has been a staple of his presidency. Just look at his most recent budget proposal, for example. That being said, it’s abundantly clear now (as if it wasn’t before) that when John Boehner told the nation hours ago that “no substantive progress” had been made regarding solving this impending crisis . . . he wasn’t kidding. Indeed, some conservatives are now openly urging congressional Republicans to simply give up -- that is, let Democrats have their way and when the US economy goes bombing off the man-made “fiscal cliff” on January 1st -- Republicans can absolve themselves of any wrongdoing. This isn’t true, of course, and would be disastrous for a number of different reasons -- as Guy pointed out below -- but it’s certainly an interesting proposition. In the end, however, I suspect some sort of 11th hour deal will be struck before the New Year; but what the details will be I can’t say.
In closing, I’ll leave you with a few words from the man who has perhaps done more than anyone living to raise awareness about the devastating consequences of reckless government spending and the dangers of -- to borrow a phrase recycled ad nauseam these days -- kicking the can down the road: