Boner Plan

John Boehner will announce in a fiscal summit put on by Pete Peterson’s outfit today that he is prepared to hold the debt limit hostage again at the earliest opportunity. The 2011 debt limit hostage crisis led directly to a downgrade of the United States’ credit rating and a significant weakening of economic performance.

“We shouldn’t dread the debt limit. We should welcome it. It’s an action-forcing event in a town that has become infamous for inaction,” Boehner will say according to excerpts of prepared remarks provided by his office. “That night in New York City, I put forth the principle that we should not raise the debt ceiling without real spending cuts and reforms that exceed the amount of the debt limit increase…. When the time comes, I will again insist on my simple principle of cuts and reforms greater than the debt limit increase. This is the only avenue I see right now to force the elected leadership of this country to solve our structural fiscal imbalance. If that means we have to do a series of stop-gap measures, so be it – but that’s not the ideal. Let’s start solving the problem. We can make the bold cuts and reforms necessary to meet this principle, and we must.”

“Reforms” have been added to the menu along with cuts, but basically Boehner affirms the same principle: for every dollar of increase in the debt limit, a dollar in reductions to the deficit must be included. I think by reforms Boehner might mean tax reform, but the Speaker also wants the House to vote this summer on a short-term extension of the Bush tax cuts, paired with a long term tax system overhaul that would presumably be either revenue-neutral or revenue-negative. This means that, at the same time that Boehner is demanding to “solve our structural fiscal imbalance,” he favors a policy that increases that fiscal imbalance by $4 trillion over the next ten years.

The other way to solve that structural imbalance is to let the Bush tax cuts expire. That will eliminate almost the entire medium-term primary fiscal gap. This is of course known as “Taxmageddon,” and must be avoided at all costs. But look at the alternative that Boehner has set up. He wants a dollar of spending cuts for every dollar of debt limit increase. A choice between those two poles is pretty obvious.

The problem is that it’s not really a choice, though it probably can be fashioned that way. Affirmative legislation must pass to extend the expiring tax cuts. Affirmative legislation must pass to increase the debt limit, barring the unlikely (though wholly Constitutional) outcome that the President allows for the minting of a trillion-dollar coin at the Treasury Department. You could see some pairing of these two issues, along with something on the trigger, the automatic cuts to discretionary and defense spending scheduled at the end of the year along with these other issues (it’s not totally clear when the debt limit will be reached, but the most educated guess is sometime around the end of 2012 or the beginning of 2013).

But this is all up in the air. The House has already passed a budget that violates the targets for spending set by the debt limit deal. And now there’s this vow of another hostage crisis. It adds up to a looming disaster in a lame duck session of Congress, possibly with a lame duck President in the Oval Office. Leaving politics aside for a moment, this is a looming disaster for the economy.

Article source: http://news.firedoglake.com/2012/05/15/boehner-plans-to-set-economy-on-fire-again-with-another-debt-limit-hostage-crisis/

Article source: http://bonerplan.com/2012/05/16/boehner-plans-to-set-economy-on-fire-again-with-another-debt/

Article source: http://bonerplan.com/2012/05/16/boehner-plans-to-set-economy-on-fire-again-with/

Article source: http://bonerplan.com/2012/05/17/boehner-plans-to-set-economy-on-fire-again-with-boner-plan/

Whether or not he can make it stick in any meaningful way, House Speaker John Boehner (R-OH) revealed on Tuesday that Republicans still have an appetite for debt limit brinksmanship — even after the last round nearly crippled the economy, and left the GOP’s congressional approval ratings in the sewer.

When Republicans went home for recess last August, after placing the country’s AAA credit rating at risk, and narrowly avoiding a self-imposed default on the national debt, they caught such an earful from constituents that they spent several weeks toning down their rhetoric and avoiding big public spats with Democrats.

So what gives? Why would Republicans signal to voters that they want to put the country through the same fiasco again — particularly when the outcome of the presidential election remains in doubt and Boehner’s House Republicans are already expected to lose several seats?

There are several plausible, in some ways self-reinforcing, explanations. And they all reflect the degree to which the Republican Party has been radicalized and behaves as if it’s in the midst of an insurgency. But they don’t change the fact that selling the public — and more to the point, voters in swing districts — on the idea of a Christmas-time debt limit fight is going to be deadly politics.

Protecting The Bush Tax Cuts

This is a generational imperative for the GOP. The 2001 and 2003 Bush cuts are key to the decades-long conservative goal of redistributing wealth further up the income ladder and rolling back the federal government’s role in providing social services. All of the cuts are scheduled to expire at the end of the year, and if President Obama wins in November, he’ll have a lot of leverage to demand that the Republicans own up to the results and allow the cuts for high-income earners to expire. Or Obama could let them all expire and then introduce the “Obama tax cuts” on day one of his second administration … unless the GOP had an ace up its sleeve. If the debt limit needs to be raised in December, the GOP could take it hostage and demand that Democrats renew all the Bush tax cuts, and defuse automatic spending cuts (the so-called “sequester”) with cuts to other domestic programs. It’s an almost unfathomable threat, but trying, if Obama wins, might be their only hope.

Laying The Groundwork For The Election

In a way, Boehner’s redrawn line in the sand suggests Republicans aren’t all that confident they’ll take the presidency in 2012. After all, why would they want to create a huge, unnecessary mess for Mitt Romney? If they were pretty sure he was going to win, they wouldn’t. But in the run-up to the election, it will help clarify for voters what the Republican agenda is: low taxes, deep cuts to domestic spending programs, and a take-no-prisoners approach to achieving it. To this end, Boehner plans to pass a full extension of the Bush tax cuts later this year and blame Dems for their looming expiration.

If they run on this and lose, they’d be testing the limits of democratic accountability to press ahead with the debt-limit strategy anyhow — especially in a lame duck session. But if they run on it and win then they’ll have a fair claim to make dramatic changes to how the federal government collects and spends money.

Boehner’s Dilemma

Boehner’s big announcement Tuesday was almost certainly conceived in the same cramped box his unruly conference has kept him in since the first day of his speakership. His conservative members are still bloodthirsty, and untrusting of the leadership. He’s had countless fights with them blow up in his face over the past year and a half, and they’ve defected from some of his key, successful initiatives by the dozens. To make matters worse for him, his party is expected to lose House seats in November. If Boehner’s fighting for his speakership, this is a way to make a final appeal to the radicals in his party. But it comes at the expense of his vulnerable, more risk-averse members. The irony is that his plan to stave off a leadership fight might ultimately cost him more seats in November.

Brian Beutler

Brian Beutler is TPM’s senior congressional reporter. Since 2009, he’s led coverage of health care reform, Wall Street reform, taxes, the GOP budget, the government shutdown fight, and the debt limit fight. He can be reached at brian@talkingpointsmemo.com.

Article source: http://tpmdc.talkingpointsmemo.com/2012/05/john-boehner-debt-limit-house-republicans-obama-elections-budget.php

Article source: http://bonerplan.com/2012/05/16/making-sense-of-john-boehners-debt-limit-chutzpah-tpmdc/

Speaker John Boehner (R-Ohio) on Tuesday vowed to only raise the debt ceiling if President Obama and Democrats agree to an greater amount of spending cuts and entitlement reforms.

Boehner also promised that no tax hikes would be a part of the package, and laid out plans for a fast-track process to guarantee tax reform would take place in 2013.

“This will give Congress time to work on broad-based tax reform that lowers rates for individuals and businesses while closing deductions, credits, and special carve-outs,” Boehner said.

Boehner made the remarks in a politically charged address at the Peterson Institute in Washington on a day where the debate over the nation’s fiscal health dominated D.C.

The speech included several shots at Obama, whom Boehner said lacked the “courage” to lead on fiscal issues.

Democrats and officials in the Obama administration fired back, with Treasury Secretary Timothy Geithner warning that Boehner should not play games with the debt ceiling.

“We hope they do it without the drama and the pain and the damage they caused the country last July,” he said of Congress’s role in the upcoming negotiations on raising the debt ceiling.

Treasury has said the ceiling will likely be hit this year, but that the department has the tools to buy time so that a hike to the ceiling could be put off until next year. The Bush tax rates are set to expire at the end of 2012, and automatic spending cuts from last year’s debt-ceiling deal are scheduled to be implemented in January 2013. This has been described by Federal Reserve Chairman Ben Bernanke as a “fiscal cliff” that threatens the economy.

Boehner previously has promised that the House would vote to stop all of the Bush tax rates from expiring at the end of the year. On Tuesday, he said this legislation would also “establish an expedited process by which Congress would enact real tax reform in 2013.”

He said the Ways and Means Committee is busy working out the details of the plan.

“The bottom line is, if we do this right, this will be the last time we ever have to confront the uncertainty of expiring tax rates. We’ll have replaced the broken status quo with a tax code that maintains progressivity, taxes income once and creates a fairer, simpler code,” Boehner said.

The Speaker said Washington had no choice but to act, and highlighted his own business background to make the argument.

“Having run a business, I know that failing to plan is planning to fail,” Boehner said. “The real pain comes from doing nothing … ‘austerity’ is what will become necessary if we do nothing now. We’ll wake up one day without a choice in the matter.”

Boehner and Obama held personal talks last year on a grand bargain deficit-cutting plan that unnerved members of both parties. Boehner on Tuesday put the blame on their failure solely on Obama.

“I believe President Obama cares about this country and knows what the right thing to do is. But knowing what’s right and doing what’s right are different things,” Boehner said.

“The difference between knowing what’s right and doing what’s right is courage, and the president, I’m sorry to say, lost his.”

Boehner said the two were on the verge of a deal that would have reduced deficits by trillions last summer by “strengthening entitlement programs and reforming the tax code with permanently lower rates for all.”

But he said Obama lost his nerve because of Senate Democrats, whom Boehner said wanted to push for tax hikes.

“When the president saw his former colleagues in the Senate getting ready to press for tax hikes, he lost his nerve,” Boehner said. “The political temptation was too great. He moved the goalposts, changed his stance, and demanded tax hikes.”

Boehner promised that Republicans in Congress would act on the debt ceiling and
expiring Bush-era tax cuts before the election in November.

“Sometime after the election, the federal government will near the statutory debt limit.
This end-of-the-year pileup, commonly called the ‘fiscal cliff,’ is a chance for us to bid farewell — permanently — to the era of so-called ‘timely, temporary and targeted’ short-term government intervention,” Boehner said.

“Previous Congresses have encountered lesser precipices with lower stakes, and made a beeline for the closest lame-duck escape hatch. Let me put your mind at ease. This Congress will not follow that path — not if I have anything to do with it,” he continued.

Boehner insisted he’s ready to take up the challenge of dealing with difficult issues, even in the midst of a highly charged election year.

‘If we have leaders with the courage to make tough choices and the vision to pursue a future paved with growth, then we can heal our economy and again be the example for all to follow.

“I’m ready, and I’ve been ready. I’m not angling for higher office. This is the last position in government I will hold. I haven’t come this far to walk away,” Boehner said.

—This story was updated at 4:30 p.m.

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Article source: http://thehill.com/homenews/house/227511-boehner-lays-out-fiscal-plan-knocks-obama-for-lack-of-courage

Article source: http://bonerplan.com/2012/05/16/john-boehner-lays-out-fiscal-plan-knocks-obama-for-lack-of-courage/

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Boehner Pushes Obama For Fiscal Plan In WH Meeting

House Speaker John Boehner (R-Ohio) said that, during a Wednesday meeting at the White House, he would be urging President Obama to introduce his own proposals to deal with a looming sequester and end-of-the-year tax increases.

“Where’s the president’s plan to tackle our looming debt crisis? Where’s the president’s plan to stop the largest tax increase in American history from occurring on January 1? Where’s the president’s plan to replace these indiscriminate cuts to our military, which will devastate their ability to keep America secure?” Boehner said when asked what he and Obama would talk about during their meeting.

The White House meeting between Obama, Boehner, House Minority Leader Nancy Pelosi (D-Calif.), Senate Majority Leader harry Reid (D-Nev.) and Senate Minority Leader Mitch McConnell (R-Ky.) revolved mainly around the “to-do” list the president sent to Congress.

But Boehner has labeled that plan political “gimmickry.”

“It’s time for us to deal with the big issues that are affecting our country and our society,” Boehner said. “We’ve spent enough time playing small ball.”

This article was updated at 1:45 p.m.

Article source: http://www.talkradionews.com/congress/2012/05/16/boehner-to-push-obama-for-fiscal-plan-in-wh-meeting.html

John Boehner will announce in a fiscal summit put on by Pete Peterson’s outfit today that he is prepared to hold the debt limit hostage again at the earliest opportunity. The 2011 debt limit hostage crisis led directly to a downgrade of the United States’ credit rating and a significant weakening of economic performance.

“We shouldn’t dread the debt limit. We should welcome it. It’s an action-forcing event in a town that has become infamous for inaction,” Boehner will say according to excerpts of prepared remarks provided by his office. “That night in New York City, I put forth the principle that we should not raise the debt ceiling without real spending cuts and reforms that exceed the amount of the debt limit increase…. When the time comes, I will again insist on my simple principle of cuts and reforms greater than the debt limit increase. This is the only avenue I see right now to force the elected leadership of this country to solve our structural fiscal imbalance. If that means we have to do a series of stop-gap measures, so be it – but that’s not the ideal. Let’s start solving the problem. We can make the bold cuts and reforms necessary to meet this principle, and we must.”

“Reforms” have been added to the menu along with cuts, but basically Boehner affirms the same principle: for every dollar of increase in the debt limit, a dollar in reductions to the deficit must be included. I think by reforms Boehner might mean tax reform, but the Speaker also wants the House to vote this summer on a short-term extension of the Bush tax cuts, paired with a long term tax system overhaul that would presumably be either revenue-neutral or revenue-negative. This means that, at the same time that Boehner is demanding to “solve our structural fiscal imbalance,” he favors a policy that increases that fiscal imbalance by $4 trillion over the next ten years.

The other way to solve that structural imbalance is to let the Bush tax cuts expire. That will eliminate almost the entire medium-term primary fiscal gap. This is of course known as “Taxmageddon,” and must be avoided at all costs. But look at the alternative that Boehner has set up. He wants a dollar of spending cuts for every dollar of debt limit increase. A choice between those two poles is pretty obvious.

The problem is that it’s not really a choice, though it probably can be fashioned that way. Affirmative legislation must pass to extend the expiring tax cuts. Affirmative legislation must pass to increase the debt limit, barring the unlikely (though wholly Constitutional) outcome that the President allows for the minting of a trillion-dollar coin at the Treasury Department. You could see some pairing of these two issues, along with something on the trigger, the automatic cuts to discretionary and defense spending scheduled at the end of the year along with these other issues (it’s not totally clear when the debt limit will be reached, but the most educated guess is sometime around the end of 2012 or the beginning of 2013).

But this is all up in the air. The House has already passed a budget that violates the targets for spending set by the debt limit deal. And now there’s this vow of another hostage crisis. It adds up to a looming disaster in a lame duck session of Congress, possibly with a lame duck President in the Oval Office. Leaving politics aside for a moment, this is a looming disaster for the economy.

Article source: http://news.firedoglake.com/2012/05/15/boehner-plans-to-set-economy-on-fire-again-with-another-debt-limit-hostage-crisis/

Article source: http://bonerplan.com/2012/05/16/boehner-plans-to-set-economy-on-fire-again-with-another-debt/