Hannity to Coulter: "You sound like Obama." Fightin' words:
SH: So are you saying that, for PR purposes, that they should give in to Obama on the tax rate?
AC: Not exactly, I--Well, yeah, I guess I am.
SH: You're saying capitulate to Obama? We don't have a revenue problem, Ann.
AC: We lost the election, Sean.
Hannity seems genuinely flummoxed by Coulter's capitulatory attitude, but does she have a point? Recent polling has been gruesome for Republicans. Not only does an overall double-digit plurality favor raising taxes on "the rich," support for extending all current tax rates has plummeted by nearly 30 percentage points in two years...among self-identified Republicans. From the Associated Press:
In the poll, 48 percent said tax cuts should expire in January on earnings over $250,000 but continue for lower incomes. An additional 32 percent said the tax cuts should continue for everybody, which has been the view of Republican lawmakers who say raising taxes on the wealthy would squelch their ability to create jobs. Thirteen percent said the tax cuts dating back to 2001 and 2003 should end for all ... A November 2010 AP-CNBC poll showed similar support for allowing the cuts to expire for people with the largest incomes. Polling earlier in that year had shown a preference for continuing the cuts for everyone, including the wealthy. Support for renewing the tax cuts for everyone has ebbed among Republicans since 2010, dropping from a high of 74 percent just after the GOP recaptured the House in that year's elections to 48 percent now. Among Democrats, support for allowing tax cuts for the wealthy to expire was a robust 61 percent, though down slightly from two years ago.
The one piece of good news for the GOP in the AP poll is that the public still strongly prefers spending cuts to tax hikes as a means to reduce the federal deficit. But what Coulter sees is a public that has turned abruptly and decisively in favor of increasing taxes on "rich people." As long as the Republican Party is widely viewed as unduly protective of the privileged few, she argues, they're dead in the water politically -- so they should relent and, to a limited extend, just let the president have what he wants. But...these tax hikes would hurt businesses and kill jobs, you might (correctly) point out. Coulter's response would be that Republicans made that case in the fall, and lost. Tea Party favorite Sen. Rand Paul seems to be warming up to a variation on Coulter's suggestion:
I have yet another thought on how we can fix this. Why don't we let the Democrats pass whatever they want? If they are the party of higher taxes, all the Republicans vote present and let the Democrats raise taxes as high as they want to raise them, let Democrats in the Senate raise taxes, let the president sign it and then make them own the tax increase. And when the economy stalls, when the economy sputters, when people lose their jobs, they know which party to blame, the party of high taxes. Let's don't be the party of just almost as high taxes.
One of the flaws in this outlook is that Mitch McConnell actually tried to let Democrats give the president literally everything he wants by offering an immediate up-or-down vote on Obama's plan this week. Democrats blocked it. This leads me to concur with Charles Krauthammer -- this isn't about the fiscal cliff or solving problems:
Let’s understand President Obama’s strategy in the “fiscal cliff” negotiations. It has nothing to do with economics or real fiscal reform. This is entirely about politics. It’s Phase 2 of the 2012 campaign. The election returned him to office. The fiscal cliff negotiations are designed to break the Republican opposition and grant him political supremacy, something he thinks he earned with his landslide 2.8-point victory margin on Election Day. This is why he sent Treasury Secretary Tim Geithner to the Republicans to convey not a negotiating offer but a demand for unconditional surrender. House Speaker John Boehner had made a peace offering of $800 billion in new revenue. Geithner pocketed Boehner’s $800 billion, doubled it to $1.6 trillion, offered risible cuts that in 2013 would actually be exceeded by new stimulus spending and then demanded that Congress turn over to the president all power over the debt ceiling. Boehner was stunned. Mitch McConnell laughed out loud ... Alas, Boehner gave again, coming back a week later with spending-cut suggestions — as demanded by Geithner — only to have them dismissed with a wave of the hand ... Such nonsense abounds because Obama’s objective in these negotiations is not economic but political: not to solve the debt crisis but to fracture the Republican majority in the House. Get Boehner to cave, pass the tax hike with Democratic votes provided by Minority Leader Nancy Pelosi and let the Republican civil war begin. It doesn’t even matter whether Boehner gets deposed as speaker. Either way, the Republican House would be neutered, giving Obama a free hand to dominate Washington and fashion the entitlement state of his liking. This is partisan zero-sum politics. Nothing more.
Krauthammer suggests that House Republicans jump over the cliff with Obama, let all the rates go up, then immediately pass across-the-board tax cuts when the new Congress convenes. He reasons that the president might be forced to relent because the public would be up in arms over the tax increases and the markets would be "gyrating." Erick Erickson advances a similar argument. But I'm not so sure. Every single poll shows that the public is poised to blame Republicans if negotiations fall through, and the margin is rather lopsided. Thus, much of the public outrage on which Krauthammer is implicitly would be directed at the GOP. Sure, they could pass their tax cuts until they're blue in the face, but those bills would die in the Senate -- and the media won't blame the Senate. This dynamic has been static for years now. Hell, the Democratic Senate hasn't even attempted to pass a budget in more than three years, yet the public doesn't seem to know or care at this point. So I'm deeply skeptical of the idea that Republicans would somehow gain public relations ground in January amidst economic and political turmoil. In fact, I think the opposite is true. Pressure on House Republicans to cave would be immense, and the automatic tax increases would actually grease the skids for GOP rank-and-file members to violate the spirit of those much-discussed 'no tax increase' pledges. They could vote with Democrats to lower most of the rates back to previous levels, while simply not acting to restore current rates for the rich -- pledge intact, technically. This is why I'd choose Rand Paul's doomsday scenario over Krauthammer's.
UPDATE - Small businesses are feeling pretty gloomy about hiring these days. Shocking.