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December 18, 2012

Boehner Plan B Shows Obama Doesn’t Even Need to Make a Deal

Posted in: Barack Obama

Speaker John Boehner is playing a relatively weak hand

The recent emergence of Speaker John Boehner’s Plan B perfectly highlights the most important aspect of the current negotiations, mainly that there is no reason President Obama even needs to compromise.

Currently, the Republicans know they are on the losing side, both politically and legislatively, when it comes to tax rates on top income earners. That is why Boehner is now proposing to just raise taxes on people making over a million dollars a year without any concessions from Democrats to get his party out of their current bind. From Politico:

House Republicans, discouraged by the pace of negotiations with the White House, will move their own bill that would hike tax rates on income above $1 million, according to several sources familiar with the plan.

Speaker John Boehner (R-Ohio) told President Barack Obama of his plan last night on a phone call, according to sources.

Boehner will make the argument to House Republicans that tax rates will go up on everyone come Jan. 1. “The question for us is real simple: How do we stop as many of those rate hikes as possible?” Boehner plans to tell House Republicans.

The Republican Party is already prepared to partially fold on taxes and there are still two weeks left until the new year. It is perfectly reasonable to suspect that if Obama plays hardball he could force the Republicans to move even closer to his original $250,000 demand. Obama can likely get most of the tax increases he wants without giving anything up in return.

This means the only two big unresolved issues are the sequestration cuts, which both parties hate, and the debt ceiling. There is every reason to believe Obama could force the GOP to eventually relent on both matters without making any real concessions.

That leaves the extension of unemployment benefits and a small amount of infrastructure spending as the only things Obama would have gotten in his recent deal offer that he probably couldn’t  force the GOP to agree to by simply waiting them out. Those are both relatively small items compared to a large and deeply unpopular Social Security benefit cut.

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