The Right Opinion

Don't Blame Boehner

By Lawrence Kudlow · Dec. 22, 2012

When you lose an election, you get frustrated. When you're sitting in a subpar 2 percent economy, and are faced with tax hikes rather than marginal rate reductions, you get even more frustrated. And when you're staring at $47 trillion in spending over the next 10 years, and $8.6 trillion in deficits, your frustration levels climb even higher.

These are among the frustrations that led a number of House Republicans to pull back from Speaker John Boehner's so-called Plan B. Nobody looked good on the Republican side when Thursday night's vote fell through. But you have to understand their frustrations. Losing an election is no fun.

I don't blame John Boehner. His idea is the best compromise currently available. Or, put another way, it's the least-bad option out there. It was even backed by Paul Ryan and Grover Norquist.

There was the million-dollar threshold for letting the top tax rate expire and moving it back to 39.6 percent. All the other Bush tax rates remained the same. Capital gains and dividends would rise from 15 percent to only 20 percent. The estate tax would go to 35 percent, not 55 percent. And everything would be made permanent, unless and until real flat-tax reform by lowering rates and broadening the base took place.

No, there were not enough spending cuts in Plan B. But a couple hundred billion in spending cuts were inserted at the last minute.

Boehner figured that if the House passed Plan B, it could put pressure on President Obama and the Senate Democrats to raise taxes less and cut spending more. A couple dozen House conservatives wouldn't buy it. I understand that. But I still think Boehner was on a noble mission in very difficult post-election circumstances.

The demise of Plan B almost certainly will prolong the fiscal-cliff negotiations, which will spill over into the new year. But I still believe this is a game where all the players are bluffing. Washington lawmakers will not risk a recession by allowing all the Bush tax cuts to expire, thus pulling $500 billion out of the economy, and by rolling back important economic-growth incentives. I just don't believe it.

And if the negotiations go well into January, the Treasury Department and the IRS can stall any changes in withholding rates. Then a deal can be worked out that will extend the middle-class tax cuts up to a threshold of $250,000 to $400,000. Patching the AMT will be thrown in there, too. So will the so called “doc-reimbursement fix,” some kind of unemployment insurance and some small leftover sequester spending cuts.

This will make no dent in our spending, borrowing and debt problem. But at least it will avert a recession.

For the Republicans, the sooner they can get out from under this mess, and move on to tax, spending and entitlement reform, the better off they'll be. And for heaven's sake, let's finally cut the corporate tax rate. But for now, it's time for a strategic retreat, as the economy teeters over the cliff.

One final thought: In a post Jan. 1 scenario, after Washington has temporarily gone over the cliff and all the tax rates have gone up, any bill that restores the Bush tax cuts actually becomes a bill to cut tax rates, not raise them or stop them from rising. That's a much better dynamic for the GOP's strategic retreat.

But alas, real reforms for taxes, spending and entitlements, and real fiscal solvency, and real economic-growth prosperity, still seem very far away.

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9 Comments

Howard Last in Wyoming said:

The best way to describe Boehner, If his picture was in the dictionary, the caption would say, "RINO". And that is the best you can say. Nuff said!

Saturday, December 22, 2012 at 12:49 AM

M Rick Timms MD in Georgia said:

At least the Republicans are having some open honest debate about the disaster that Big Governmnet has brought upon us. Harry Reid and the Democrats have refused to make any budget proposals for four years, at the risk of having to make a commitment to anything resembling a cutback, and they have forced the country to operate on repeated, sequential spending resolutions with no plan at all. Simply Irresponsible. Yet the leftist media highlights the GOP as the obstructionists, even as Harry brags that he "will not do anything" with any of the Republican proposals over the last four years. They are all in Harry's pocket along with the Republican proposals for a grown-up approach to government.

We need men and women of character in Washington, not a bunch of cartoon characters like Reid and Pelosi. Boehner may be pitifully emotional about his job, but at least he has the integrity to try to make our process work. Obama is completely detached from reality, and Harry refuses to even bring ideas to the Senate for debate. Pelosi is so bizarre as to be ridiculous. And to think that we pay these people. Lets hire some folks willing to dismantle the Feds and return to a constitutional Union of States.

Saturday, December 22, 2012 at 12:54 AM

Tod the tool guy in brooklyn ny said:

"Tax, print, spend, and borrow has created the welfare State and sorrow. Only by Conservative principles, will the Children have tomorrow." Also, "Unless the Lord build the House, they that labor, labor in VAIN."

Saturday, December 22, 2012 at 6:36 AM

Wayne in Hinesville, GA said:

The big problem with the Republicans today is they refuse to slam the Demorats and Harry Reid in particular. They should be on talk radio ,TV and putting comments in every major newspaper every day telling the American people the truth about the Demorats refusal to pass a budget in four years. Place the blame where it lies and stop letting the lamestream media cover for Reid, Pelosi, and Odumbo. Grow a set of cojones and keep the failure of the Demorats and Odumbo in particular front and center.

Saturday, December 22, 2012 at 9:42 AM

Tex Horn in Texas said:

In my estimation, Boehner is a failure. Has been, is, and will be. Can you say "roll over?" Just because Obama won the election, he is now the King that can get what he wants, much with the participation of establishment Republicans? I am thankful for those few Tea Party Republicans who voted down Plan B, or as I call it, the Republican Roll Over Plan. We have become such a nation of wussies (with a capital P) that no one has the balls to stand up to anything. We just let them stuff it down our throats. We gag a little and go on our way. It's all a very sickening sight.

Saturday, December 22, 2012 at 10:43 AM

Howard Last in Wyoming replied:

Tex, remember when kommnadant klinton nominated Ginsburg to be a Supreme? Dole who was senate majority leader (he was a leader?) urged the Republicans to vote for her because klinton won the election. Better than 90% of the senators voted for the head ACLU lawyer.

Saturday, December 22, 2012 at 11:49 AM

Nam_Vet68 in Philadelphia said:

"But I still believe this is a game where all the players are bluffing. Washington lawmakers will not risk a recession by allowing all the Bush tax cuts to expire, thus pulling $500 billion out of the economy, and by rolling back important economic-growth incentives. I just don't believe it".

You are not dealing with your ordinary bunch of politicians here, This mob is by far the worst the country has ever experienced. I don't put anything past these people

Saturday, December 22, 2012 at 12:31 PM

Nam_Vet68 in Philadelphia said:

Do you know what it's like knowing that John Kerry is the next Secretary of State? I'm sure you do if you are a Vietnam Veteran. It's like Obama just spit into my face. I have so much disdain for this man, you can't even imagine. One more step by Obama to disgrace veterans. Four Americans murdered in Benghazi and still now answers from this mob.

Saturday, December 22, 2012 at 9:00 PM

Eleanor in AK said:

Assume we're going over the cliff. Sell stocks before the end of the year. Pay 15% capital gains. Take your profits. Buy 30 day CDs or pay off the mortgage. Wait for the crash to bottom out then hop back in the game in 2013. The mortgage deduction is in the Senate headlights. Sell the McMansion. When you buy the next house, keep your mortgage below $200K. Our Senators from urban areas think that is a starter house. They may let you write something off on Sch A, but the cap will include state and local taxes and everything else. States will bear the brunt of the tax reform unless we can repeal the 16th and 17th amendments. Just saying..

Saturday, December 22, 2012 at 11:38 PM