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Location: Douglas, Coffee Co., The Other Georgia, United States

Sid in his law office where he sits when meeting with clients. Observant eyes will notice the statuette of one of Sid's favorite Democrats.

Thursday, December 27, 2012

Questions as ‘Fiscal Cliff’ Nears - Cutting taxes and raising spending are activities Washington always finds more satisfying

From The Wall Street Journal:

The most logical way to get something done quickly would be for Sen. Reid to take a bill the House passed a while back, which extended current tax rates for everybody; adjust it to reflect Democrats’ wishes to extend current rates only for families making less than $250,000 a year and allowing rates to rise for others; jam in some other eleventh-hour fixes such as extending exemptions to the Alternative Minimum Tax and continuing expanded unemployment insurance benefits; pass it in the Senate, and then send it back to the House.

One uncertainty in this scenario is whether Mr. McConnell would stand aside and let such a bill hit the Senate floor without objections or tactics to stall it. The benefit of the plan for Republicans is that they wouldn’t have to do anything proactively to let it move forward except stand aside and allow it to proceed. And they wouldn’t actually have to vote to raise anybody’s tax rates. They’d vote only to keep rates at current rates for most people, and rates on wealthier Americans would simply rise automatically.

3. How many Republicans in the Senate would go along with such a half-measure, and could House Speaker John Boehner get a majority of his Republican caucus to vote for it?

The question is relevant because the only way a last-minute fix could pass both chambers is with some combination of Democratic and Republican votes. Democrats likely would have to provide the bulk of the votes in the Senate and a healthy chunk of them in the House.

That would produce an odd case of shotgun-marriage bipartisanship in Washington. On the other hand, it may be that what the two parties really agree on at this point is that they’d rather go over the cliff, prove their points, wait for Mr. Boehner to be re-elected House Speaker Jan. 3 and then try again.

By then, tax rates will have gone up and spending cuts will have kicked in. At that point, the two parties then could negotiate ways to cut taxes and increase spending from their post-cliff levels. And cutting taxes and raising spending are activities Washington always finds more satisfying anyway.


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