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Fiscal Cliff Deal After Christmas?

Just because “Plan B” is no longer under consideration, it doesn’t mean a fiscal cliff deal is off the table.  In fact, some suggest that “Plan B” was being used as a negotiation tactic and a deal will be coming after Christmas.

Chris Frates of National Journal opines:

But behind the rhetoric there was a strategy at play. The plan appeared designed to move Obama toward the speaker’s position of smaller tax increases and larger spending cuts while helping conservatives wrap their heads around the idea of voting for a tax hike.   

This analysis is certainly plausible, and the idea that “Plan B” was designed to help “conservatives wrap their heads around the idea of voting for a tax hike” is something we talked about at length yesterday.  But regardless of the political calculations that were at play here, we can’t help but be reminded of that good old quote: “Sometimes the questions are complicated, and the answers are simple.”

In this case, the simple answer is that we must cut spending without raising taxes.  Politics and passions can lead us astray, but principles are enduring and should not be brushed aside for the sake of political expediency.   Indeed, Republicans in Congress acted on conservative principles in August, and Heritage has been offering myriad solutions to avert the situation in which we now find ourselves.

In light of the House’s decision to recess without considering “Plan B,” our CEO Mike Needham stated:

In August, the House passed H.R.8 with bipartisan support.  It would have prevented a tax hike on hardworking Americans who are struggling under the weight of President Obama’s economy.  For nearly five months, Harry Reid’s Senate has sat idle.  If we are to avert the fiscal cliff, it is incumbent the Senate put forth a bill that can garner the 60 votes necessary.

With H.R.8 and the House-passed budget, House Republicans have demonstrated a seriousness of purpose.  It is time Harry Reid and Barack Obama reject the political gimmicks and demonstrate that same level of seriousness.

Similarly, today Heritage called out President Obama and the Senate for failing to act on behalf of the American people in a responsible manner, despite the House passage of H.R. 8.  They give us the state of play:

Now there are just 11 days left before Americans face a massive slate of tax hikes and reckless defense cuts. The fiscal cliff will affect all American taxpayers, with an average increase of more than $4,100 in taxes.

And instead of offering real solutions:

Obama initially wanted an $800 billion tax increase, only to later double that demand to $1.5 trillion. His plan lacks any substantive spending cuts, insisting on tax hikes first. And to top it off, the more concessions Republicans have made, the more Obama wants to take from the American people.

Yet, again, this is not how the story has to end.  While the remaining option is not optimal, it is “the best possible outcome in this unfortunate situation”:

Conservatives stood their ground last night and sent a powerful message. Now it’s time for lawmakers to take the “least repugnant remaining resolution to the fiscal cliff,” as Heritage’s J.D. Foster wrote earlier this week, and pass a temporary measure that extends all tax rates and all spending policy without sequestration cuts through March 31, 2013.

First and foremost, lawmakers must remember: cut spending, don’t increase taxes.

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11 thoughts on “Fiscal Cliff Deal After Christmas?

    • Fiscal Cliff = the discontinuation of wind energy credits and a host of other stupid spending the government does. My taxes were going up no matter what happens, I don’t want the sacrifice to be in vain. Republicans simply need to rediscover their spine and refuse to appropriate money to all this pork-barrel spending. IF the additional taxes is directed to legitimate uses (say, to pay of the debt we’ve ALREADY run up before interest rates climb even modestly–sending our debt service payments thru the roof), then some good will have come from it.
      The sequestration gave a way for spending cuts to occur despite congress’ incapability to cut even the most worthless programs. That’s why although I support the Heritage Foundation (financially and morally) I disagree with the strategy of kicking the can yet again to March.

  1. Please find a way I can send you some important data that you don’t have. (Pridco@verizon.net), D. Bruce Merrifield PhD; former Undersecretary of Commerce, Technology and Economic Affairs, Reagan Administration; Chaired Professor of Management, Wharton School of Business, Univiversity of Pennsylvania.

  2. Harry Reid has not allowed the Senate to vote on those Bills passed in the House. He has not attempted to even counter or offer alternatives that would achieve the Simpson/Bowles 3:1 Cuts:Taxes, much less anything at all, such as a Budget for the last 3 years. I guess we should not expect more from this man who is preventing any kind of compremise to avoid this whole mess. He wants to run this Country into the ground, which will increase interest rates, which will bankrupt this country. Our interest payments now are about $1T/year. If we don’t find a real solution to spending more than we take in (tax increases amount to approx. 8.5 days running the government). WE HAVE A SPENDING PROBLEM, not a tax problem as businesses pay one of the highest tax rates already. Also, while BHO talks about not raising taxes on the middle class is a lie. ObamaCare alone adds 20+new taxes that will effect all of us working class heros. Increasing taxes on capital gains and dividends will negatively effect almost all of us, specifically, those living off their savings and dividend income such as the elderly.

  3. It’s time for Harry Reid to get out of the way, he has already said “whatever comes from the other house, Congress, he won’t work with them” so it’s time for Harry to go!!!!! We have got to have people who will work for the betterment of America. If John B is to stay then he has to have a backbone to stand up to the little socialist and tell him how the cow eats the cabbage!! America, lets get rid of these carpetbaggers who are sucking the lifeblood out of our great Country, period. I don’t mean by violence, I mean by using the built in part of our Constitution our founding fathers installed in it so this wouldn’t happen. It’s called calling a Constitutional Convention, we don’t want America turning into another Greece or Spain, these countries are gone financially. Folks of America, do you have the guts? Call your Senators, Congressmen and tell them this is not what we had planned for this Country!! We deserve a better President, Speaker of the House, Senate Majority Leader. We need a person with principles, backbone, and especially a person with character meaning the President. Folks, aren’t you getting tired of the same old lies, same old mess out of Washington election after election? Isn’t it time to change (not this change bull-crap Obama lied to us about the first go-round). We’re tired of these washed out lawyers who just decided (hey, I think I can run for the Senate, Congress and do some good) no, we don’t want anymore people who lie, all they do is get in with the rest of these godless people, not all, but majority and make things worse!! Look at all the times Obama has lied. Harry Reid, John B., who seems not to get the message what the 2010 elections was all about. We don’t want any more taxes until we get the spending under control, period. It don’t take a rocket scientist to realize this. I can’t continue to run up my own credit cards every time I go into Walmart and my wanter wants everything I see on the shelves. America, this has to stop!! By the time Obama gets out of office our debt will be at a point of no return. Do we deserve this? Just think of all these people who have bled and died for our Great Country in the past. Ask yourself this question, are we spitting on their graves? What would they say if they could come back and see how we’ve let these no-counts mess up their country. May God help us try to return to our principles, morales and character, we’ve got to, folks, or we’ve had it as a free society!!!

  4. These are all wonderful rants but none of them address reality. The reality is America just voted to give Democrats 2/3 of the country’s lawmaking authority to the Democrats and 1/3 to the Republicans. Americans rejected conservative economics for 2 of 3 power centers. If both sides stubbornly say “I won” so I don’t have to compromise then the Repuiblic will suffer. I just finished teaching a unit on the Constitutional Convention. The Framers solved all disagreements with compromises where BOTH SIDES GOT WHAT THEY WANTED, but had to endure giving the other side what IT wanted. WE MUST DO THE SAME. Sorry Heritage, you are wrong and are hurting the Republic AND the Conservative cause by championing “No new taxes.” What is dearest to us – spending cuts or no new taxes? I suggest it is spending cuts because that with tax increases with reduce the deficit. If so we must accept the increased taxes on incomes over $1M BUT THEN demand REAL cuts in spending.

    [God I wish (pray) we could get on the table the deal Boehner had in early July 2011 that the Tea Party rejected. It was the best deal we have come close to getting.]

    If we are so against new taxes then we have to give in on spending – why? – not because it’s right for the economy but because WE LOST! Remember when we used to say “Elections have consequenses?” (THAT”S why you can’t run Sharon Engle against Harry Reid. THAT’s why you can’t abandon Newt when he suggests the America has too big a heart to throw out people who have lived here for years. We began to lose the 2012 election in July of 2011 when we DIDN”T take the $2T in cuts in exchange for tax increases that ELIMINATED UNFAIR LOOPHOLES!!! but I digress.)

    We have 1/3 of the government. We have to be at least 1/2 responsible its success, because the Dems – and this administration in particular – are adept at getting the media to report we are 100% responsible for the mess if there is failure. So GROW UP, Conservatives; GROW UP, Tea Party; GROW UP, Heritage and be part of the plan/solution/compromise.
    Boehner, by his Plan B vote, just signaled to the Dems and anyone else who can read between the lines that a bill must be drafted that gets bipartisan support from the middle of the 2 parties. Decide what you are willing to give up, endure, or accept while holding your nose.
    OR you will be tainted with responsibility for the 2nd recession and the blame and political costs the media (correctly for a change) will be laying at your feet!

  5. Your actions pressuring the House Republicans are thoughtless and self-absorbed. I am a lifelong Republican and I detest your group. You are the problem in this country and our Republican Party. You could not do more damage to our Party if you were liberal Democrats planning to destroy the Republican Party. I think the best thing you can do for America is disband and go back to your trees. DO YOU WANT TO PAY MY TAX INCREASE,YOU IMBECILES. YOU just influenced Republicans to throw me under the bus for the 2%. Do you think anyone in the middle class will vote for the retards that caused this? How moronic can you get? You live in an unrealistic dream world and you are not intellectually fit to to formulate opinions. Get out of the way and go back to the sewers you came from you stupid turds. MODERATE REPUBLICANS HATE YOUR LOUSY SIMIAN GUTS. Latourette is correct you are chuckle heads, and dangerous, too. Have a nightmarish Christmas you terrorists. Then leave this great country of ours, and go stand in one of the oceans forever, but never climb back on these shores.

  6. You Heritage Action folks need to get out of Washington more often and see how regular people see this cliff. I generally agree with your principles but greatly disagree with your tactics. Stubbornly insisting on no tax hikes on the upper 2% just keeps playing into the successful Democratic line that Republicans only care about the rich. The Republicans were and are in a very bad negotiating position. They lost the election (in no small part because the above perception) and if no deal is struck taxes go up anyway. Obama has not bargained in good faith because he has a huge advantage in this particular fight. The only thing the Republicans could really do is use the attention to this issue to be sure everyone understands that Obama’s “cuts” are illusionary and Obama is, frankly, lying about cutting anything. Spending is ultimately the problem and the only way to solve that is to keep attention on spending and to educate people to Obama’s lack of truthfulness.

    To continue to keep the attention on taxes, especially on preventing a tax increase for the rich, is self defeating and only keeps the public’s attention just exactly where Obama wants it to be. You are supposed to be the professionals but it seems like you are working with Obama on this one. If I was a Democrat, I would be making contributions to Heritage Action. As a libertarian, I will not be. I am looking for some more intelligent organization.

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