Thursday, 20 December 2012 15:18
Obama, Boehner play cat and lizard on Fiscal cliff
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fiscal-cliff-obama-boehnerI had a cat once that deemed itself a mighty hunter. His choice of prey was lizards. He would watch them crawl down the patio walls, pick a spot within the edge of his leaping ability, fly from the floor, knock the hapless reptile down, and slap it around until he got bored. Watching how Barack Obama has battered John Boehner for the last few months brought back memories of my cat and the lizards.

 

 

Earlier negotiations dealt Boehner a bad hand with a low chance of winning the current “fiscal cliff” debate. It was actually George W. Bush and the Congress who 10 years ago effectively raised taxes on every American by sun-setting the Bush tax cuts effective January 1, 2013. It is now tough for Boehner and the House Republicans to play St. George to Obama and the Senate Democrat’s role of dragon on tax increases when the Democrats control the Senate and the White House. One chamber cannot pass legislation in isolation. Even some of the most strident fiscal conservatives in the House are fearful of taking the blame for tax increases on middle-class Americans if nothing passes and Congress does not reach a deal by December 31. Ergo, Obama’s advantage is palpable as he thumps Boehner and the Republicans repeatedly with his paws.

So what are the poor lizards to do? It is a little late for them to read Sun Tzu’s “Art of War” at this point; although it is something they should have done 18 months ago when they should have begun preparing for this end game. The ancient Chinese general would undoubtedly tell Boehner to remove his troops immediately from the low-lying swamp they are in and focus on controlling something their enemies desperately need.

How? By cutting the losses they have already forfeited, those upper-income tax cuts, and assaulting the spending that is food, oxygen, and water for Obama and his allies.

Boehner and the House Republicans should pass three bills immediately: one that extends the Bush tax cuts for everyone; a second that protects households with incomes under $250,000 from the pending tax increases; and a third that requires entitlement cost reductions by changing the eligibility age for Social Security and Medicare along with reforming the formula for all government spending tied to adjustments in the cost of living. The Senate will pass only the “middle-class” tax cut and gleefully kill the other two bills. However, Boehner and his team will be out of the swamp and focused for a counter attack.

The GOP and their friendly think tanks should then immediately launch a huge national education campaign on exactly what will happen as deficits continue to surge and the national debt further explodes. They must focus their megaphone on how the inevitable explosion of interest payments on the debt will crowd out most non-entitlement spending in a relatively short period of time and continue to dampen the economic expansion needed for full recovery.

The GOP should let the nation know that Obama got exactly what he wanted in taxing the “rich” and, in spite of that, he solved none of the nation’s economic woes. They should then demand that the legislation they passed requiring entitlement reform pass before the House enacts any instrument to increase the debt limit. Further, they should demand further spending reductions in non-entitlement spending to help offset the increase in the debt limit.

Spending is the lifeblood for Obama and company. At its current levels, it is a fiscal death sentence for the nation and most voters agree with that assessment. The GOP played a bad hand badly on the tax issue. They need to play a strong hand strongly on the spending. If they do, the cat will stop slapping them and they can crawl back up the wall to a position of strength on the most critical issue facing the nation.

by Dan Juneau, President and CEO of Louisiana Association of Business and Industry

 

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