Wednesday, December 5, 2012

GOP Budget Strategy

Ever since William Greider's interview with David Stockman appeared thirty-one years ago the basic goals of the post-Nixon Republican Party have been on full public display.  First, bring down the top tax rates; second, blow up the debt in order to cut back social programs down the line.

This is what we're dealing with in the fiscal cliff, coming to terms with decades of entrenched conservative thinking and governance.  Combine this with the collapse of the Southern Strategy for winning presidential elections and you get a sense of the high stakes at play for Republicans.
We're at one of those unique moments when change is afoot.  The bedrock of national GOP hegemony is breaking.

Today's front page offering from Jonathan Weisman adds a lot of necessary detail to the negotiations.  Apparently -- I didn't know this -- we're going to reach the national debt limit again sometime next month or the month after.  This is the ace in the hole for the GOP.  The threat of a default worked well for them last year.  It caused a meltdown in the Dow and forced Obama to heel.  They will not bargain this away.  Worst case scenario for Republican strategists: sail off the cliff January 1; wait until a vote to raise the borrowing limit; then extort deep cuts in Medicare and Social Security plus a return of the Bush tax cuts.  It's an apocalyptic option, but, as Weisman points out, most Republicans in the House feel secure:
Popular opinion seems to be running against the Republicans. Most Americans support higher taxes on the rich, and a poll by The Washington Post and the Pew Research Center released Tuesday found that 53 percent say Republicans in Congress would and should be blamed if Washington fails to reach a deal before January. Just 27 percent said Mr. Obama would deserve more blame, while 12 percent say both sides would share the blame equally.

Most Republicans do not want tax rates to rise on anyone, and such national polls have little sway over House members in districts drawn to favor one party over the other. In November, 204 Republicans — 88 percent of the House Republican Conference — won at least 55 percent of the vote, according to David Wasserman, a House analyst at The Cook Political Report. Thirty-five of them won at least 70 percent.
The estate tax increase is huge.  Inheritances over $5 million currently taxed at 35 percent will go up to 55 percent for estates over $1 million.  This is a wild card.  It might be enough leverage for Obama to get a deal before December 31.

Can a Republican Party, rife with Birchers and cracker nostalgia, exorcise its Mad Mullah spirit?

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