As Congress returns to Washington this week, everybody's talking about the so-called "fiscal cliff," a variety of various tax and spending decisions that must be settled in some fashion or another before the end of the year.
The Bush-era tax cuts have received the most attention. Passed in 2001, they were supposed to run out in 2010. But that changed after President Obama and the Democrats, chastened by a Republican shellacking in the 2010 off-year elections, opted to extend the cuts until the end of 2012, tacking $858 billion onto the deficit.
Now Obama and his supporters say his victory (as well as exit polling) shows that the public supports his decision to raise the tax rates back to where they were pre-2001 for everyone except those making less than $250,000 a year. Republicans have disagreed, but on Fox News Sunday, Weekly Standard Editor Bill Kristol said the GOP should consider allowing tax cuts to expire for incomes above $1 million, "half of whom voted Democratic."
"The leadership of the Republican Party and the leadership of the conservative movement has to pull back, let people float new ideas. Let's have a serious debate," Kristol said on "Fox News Sunday." "Don't scream and yell if one person says 'You know what? It won't kill the country if we raise taxes a little bit on millionaires.' It really won't, I don't think."
"I don't really understand why Republicans don't take Obama's offer to freeze taxes for everyone below $250,000, make it $500,000, make it $1 million," Kristol said. "Really? The Republican Party is going to fall on its sword to defend a bunch of millionaires, half of whom voted Democratic and half of whom live in Hollywood?"
Although the White House has been insistent on raising the tax rates back to where they were in the 1990s (with the exception of those making less than $250,000), influential Democratic Senators like Charles Schumer from New York have argued that the rates should be raised for everybody making more than $1 million, taking away the GOP argument that increasing taxes for those below that rate hurts small businesses and will put us back into a recession.
Whether that could be negotiated is something to watch for. And while Kristol has at times a very influential voice in Republican politics, often the party has gone in a far different direction (especially with the Tea Party and immigration) than what he has espoused.
In his Saturday address, House Speaker John Boehner said raising tax rates on anyone would be unacceptable. Observers say that it might be his way of staking out a negotiating position, and that there are definitely opportunities for Republicans and Democrats to come together on some sort of "grand bargain."
But what about Senate Majority Leader Mitch McConnell, who famously declared four years ago that his mission in life was to make sure that Barack Obama would be a one-term president? With that pledge now refuted by the American people, surely the Kentucky senator, up for re-election in 2014, will now come willingly to the table to negotiate and defer just a bit to the recently re-elected president?
Perhap. And maybe his interview with Stephen Moore in the Wall Street Journal on Saturday is just posturing.
In the story, McConnell says his idea re the Bush tax cuts is to kick the can down the road, as the saying goes, extending them for yet another year (and the hundreds of billions of dollars that will add to the deficit) while coming up with a long-lasting plan.
The Senate Minority Leader says his top goal is long-term entitlement reform, which is absolutely something Obama needs to address, though that could be painful with his Democratic constituents. McConnell says he wants to change the eligibility for Medicare, saying, "Warren Buffett's always complaining about not paying enough in taxes. What really irritates me is I'm paying for his Medicare."
McConnell also wants to go the Paul Ryan route on Medicaid, making it a block-grant program for the states, but surely he realizes that will never happen with a Democratic Senate and Democratic president.
Even though with President Obama's re-election "Obamacare" is now the law of the land, Mitch McConnell predicts it will die out before it's fully implemented.
"It's the single worst piece of legislation that's been passed in modern times," he says."And the single biggest step in the direction of Europeanizing the country. It can't possibly work." Democrats don't understand that now, he continues, but "people are going to be coming at us in hordes asking for us to revisit it" and fix the mounting problems.
Moore's interview with McConnell in the Journal ends like this:
And what if the president insists on raising tax rates? Expect a principled stand by the minority leader and his fellow Republicans: "He's got to understand he doesn't fully control the Senate. He doesn't control the House at all. In order to accomplish things for the country he will need to work with us."
As Mr. McConnell walks me to the door, he adds: "You know, he doesn't own the place."