Senator Lindsey Graham, one of the Republicans who has deemed himself willing to increase taxes as part of a “fiscal cliff” deal, says that we’re probably going over that cliff:
“I think we’re going over the cliff. It’s pretty clear to me they made a political calculation. This offer doesn’t remotely deal with entitlement reform in a way to save Medicare, Medicaid and Social Security from imminent bankruptcy. It raises $1.6 trillion on job creators that will destroy the economy and there are no spending controls,” Graham said on CBS’s “Face The Nation.”
Graham had signaled a willingness to violate Grover Norquist’s anti-tax pledge to avert the fiscal cliff if Democrats made an effort to reform entitlements. But he said Sunday the White House’s plan for entitlement reform was laughable.
“I’m serious about revenue,” Graham said. “You can limit deductions to $40 or $50,000 a person, which takes care of the middle class. Upper income Americans will lose their deductions, and raise about $800 billion of revenue. But I’ll only do that if we do entitlement reform, and the president’s plan when it comes to entitlement reform is just, quite frankly a joke.”
Obama’s plan was massive tax increases, and the removal of the debt ceiling as a check on national debt creation, and a tiny dollop of spending cuts.
That’s worse than going over the cliff. Republicans shouldn’t even negotiate. Unless Democrats come back to the table with something more serious, let’s take the sequestration cuts and tax increases.
Meanwhile, Treasury Secretary Tim Geithner is saying no deal unless Republicans agree to higher marginal tax rates:
“There’s not going to be an agreement without rates going up,” Geithner told CNN’s Candy Crowley. “If Republicans are not willing to let rates go back up, and we think they should go back to the Clinton levels, a time when the American economy was doing extraordinarily well, then there will not be an agreement.”
It’s ironic how often Democrats talk about Clinton-era tax rates as if they were a boon to the economy. If that were true, why are they so insistent that tax rates not go up on middle class Americans now?
That’s the bluff Republicans should call. Let’s go back to Clinton-era tax rates, which would represent an enormous tax hike from current levels, and see what that does to our economic recovery.
Meanwhile, for comic relief, here’s Tim Geithner trying to explain on Fox News Sunday how counting savings from ending wars we weren’t going to continue fighting anyway isn’t a budget gimmick.