GOP Must Not Accept the Premise That Congress Has to Hike Taxes
July 7, 2011
RUSH: The White House meeting today, the Republicans and the president on the debt ceiling. What always happens here has happened. You can't avoid it happening. It's how you deal with it if you're the Republicans that matters. The Republicans are forced into reacting. Obama is the president. As such, in circumstances like this, the president sets the premise, and then the Republicans react to that premise. Now, there's a big difference between reacting to it and accepting it and discussing it and debating it all within the context and confines of the premise as set forth by Obama. So what happens here, I think the Republicans need to stop reacting to all of this talk about revenue. I don't know if you know this or not, but Reuters put out an abject lie of a story last evening around six or 6:30 saying that Jon Kyl, Republican senator from Arizona, had agreed to tax increases. He hadn't, and they knew it.
They were taking an excerpt of some comments that Senator Kyl made on the Senate floor days earlier about something relatively unrelated to this, and they just ran with it. And a lot of people in the conservative blogosphere predictably started going nuts, and they started calling Kyl's office and accused him of being a traitor. So Kyl's office, "What's going on here?" They looked into it. They found out that Reuters was just lying about it, so they put out their correction, and everybody backed off against Kyl. He was talking about revenues, but the kind of revenues that result from federal property being sold. He was not talking about tax increases. Reuters tried to make it look like the Republicans had secretly already agreed with raising taxes, and they had not. So this is the kind of thing that Republicans face.
In the meeting today -- and this has also been reported in the press pretty much this way, this is an idea here of how misleading and dangerous this all is -- in the meeting today, Obama is going to let the Republicans take the blame for cuts to Social Security and Medicare in exchange for raising taxes. That's what he hopes is reported when this is over. And given that Reuters lied yesterday what's to say that the media won't report it that way no matter what happens? That's what Obama wants. At the end of this whole thing, Obama wants it reported that the Republicans secured their entitlement cuts, Republicans succeeded in cuts to Social Security and Medicare in exchange for raising taxes. That's what Obama wants out of this today, and he wants a long-term deal. He wants some deal that they can go out there and say that there's two to three, maybe even four trillion dollars of deficit reduction when there won't be, over ten, 15 years, what have you.
That's what Obama's looking for at the end of this thing today, because he's looking for something to hang his hat on for his campaign for reelection. He knows a majority of Americans are opposed to every issue that he's put forth. He knows that a vast majority of Americans think the country is headed in the wrong direction, and he knows why. He cares only to the extent that he can massage it to get reelected. So he knows what we think. He knows we're fed up with all this spending. He knows that we tie him to it. What he's hoping to get is a news report that says he has succeeded in this meeting today of securing deficit reduction of two, three, or four trillion dollars over ten years, something like that. And I hearken back to my message of yesterday. This guy is the one who's run up all this debt. He's the one who's run up all this spending. And now after the fact, he gets, because he's the president, with a media that really wishes he was king, he gets to set the agenda, he gets to set the premise, and he gets to act like all this happened on its own, and now he is going to be fiscally responsible. He's gonna be the one that brings fiscal responsibility to all this.
They're calling this deal where the Republicans get credit for cutting Social Security and Medicare, i.e., the blame, in exchange for raising taxes. They're calling that a once-in-a-lifetime opportunity. You've seen it, Snerdley, you saw it in your show prep. The media is calling this a once-in-a-lifetime opportunity for the Republicans. Now, the meeting is over and Boehner just said that there's maybe a 50-50 chance of a debt deal reached within 48 hours. I'm not sure, is the meeting over or is it not? I'm getting conflicting reports here on the status of the meeting. Regardless, I know what Obama wants out of this and whenever it's over I know what they're going to try to say, and Reuters also has a story, and I've got this in the stack, I'm gonna get to all this stuff, Reuters has a report out today that says despite all the claims to the contrary, the Treasury department is preparing other options in case Congress doesn't raise the debt limit.
I've been making the point for how long, folks? I mean those of you who have been listening regularly will know, it has to be weeks, that there is no possibility of default. The United States cannot possibly default. There is revenue that comes in every day, tax revenue, it comes in every day. Companies are required to, individuals, withholding takes place every week. There is revenue coming into the Treasury sufficient to service the debt. There is no default that's going to happen. All of this is trumped up. Please don't doubt me on this. There's no bluster here. It is the fact. So what do the Republicans need to do? Republicans need to stop talking about revenue and loopholes and all this. The focus must be on this out-of-control spending.
Now, I would love for the meeting not to have started yet so that I could advise these people, 'cause I know what to do. I know what to tell 'em to do, and if they would listen everything could be cool. And I'm not saying that from an ego or braggadocios point of view, I just know these people. I know who I'm dealing with here, folks, as do you. We know we're dealing with Obama and the Democrats, we know we're dealing with the media and liberals. Boehner made that statement after a briefing with Republicans this morning, that there's maybe a 50-50 chance of a debt deal reached within 48 hours, 50-50 chance? So they haven't made the deal yet, Republicans need to stop, as I say, talking about revenue and loopholes and whatever and keep the focus on all of this out-of-control spending. If they're not careful they will allow themselves to be positioned and sucked into the construct that Obama wants.
Now, there's a great analysis here at National Review Online by James Capretta. I'm gonna read excerpts of it to you because it's very, very, very, very, very, very good. It's one of these pieces advising the Republicans of the pitfalls that they face. I find it fascinating. All of us on the conservative side think that our guys don't know what they're doing, and that we have to advise them. (laughing) Yeah, why is that? We think we gotta warn 'em. We think they actually go into these meetings not knowing what the traps are. We really do think that. It's not just I, El Rushbo, Mr. Capretta here writes from that standpoint at National Review Online. I know Boehner and these guys know the traps. We hope they do. I guess we're not sure that they do. Snerdley is getting a big kick out of this. So the focus, of course, is cutting spending, and, by the way, baseline budgeting, we need for the sake of this discussion, for this meeting, we need to rout out the stimulus, because the stimulus is now serving as a baseline for every future budget. That $800 billion that didn't accomplish anything, and now there's another report out about how really bad -- wait 'til you hear that. In three states what it cost, folks, it's outrageous, just the waste that was in that stimulus. But, anyway, it serves as a baseline.
But this is not a budget negotiation. This is the thing. Obama wants to pretend, and he wants a big deal now, $4 trillion in cuts over 12 years. Isn't that a joke? Cuts in 12 years, revenue increases immediately. That's what they did to George H. W. Bush, Dick Darman fell for the trick that was put forth by George Mitchell. You know, H. W. Bush, "Read my lips: no new taxes." Darman, there was a deficit problem back then, there's always a deficit problem. Dick Darman was one of Bush 41's big aides and they were all caught up here as they got into reelection mode, gotta do something about the deficit, so Mitchell came along and basically said, "Look, here's a deal, we'll give you some spending cuts, but you gotta cut taxes first." Okay, okay. And they cut the taxes, but there were never any spending cuts. The same thing happened to Reagan. This is why we think our guys don't know the traps.
The same thing happened to Reagan. Reagan was promised in TEFRA, which was at the time the largest tax increase in American history, it was 1980-something, he was promised two dollars of spending cuts for every new dollar in tax increases. Spending cuts never happened. They never do. Obama's promising the same thing. These are right out of the old Democrat playbook. It's that old. We've been here and done that. They pulled it on Reagan in his second term. They pulled it on Bush 41 who broke his no-tax pledge. Bush 41 fell for it and was voted out of office. We know how this works. We know how the scenario goes. The Democrats are not gonna feel bound to any promises they make to future cuts, let alone over 12 years, when a bunch of them aren't even gonna be around, ditto with health care. You know, a lot of these old leather faces in the Democrat Party that signed Obamacare say, "I don't care. I'm gonna be dead by the time this thing gets fully implemented, doesn't matter to me."
RUSH: The meeting is supposed to end about 12:30 and then we'll know a little bit more. Now, here's a little bit more about the Republican meeting. Before the Republicans went to the White House, Boehner told the GOP taxes are off the table, just like I told you yesterday. House Republicans are not going to raise taxes. But he does seem to be keeping some revenue increases on the table, according to Politico, at least. Politico reports: "Speaker John Boehner told a closed meeting of the House Republican Conference that he was not going to provide them many details about his talks with President Barack Obama on a debt ceiling increase, but said tax hikes were 'off the table,' even as he considers a variety of ways to increase revenue."
Now, given what Reuters did to Kyl yesterday, I'm reserving judgment until this is all over to see what, if anything, that means. "The speaker said it will be clear within the next few days whether an agreement can be reached. 'Whether or not it’s possible depends on whether the White House insists on tax hikes,' a GOP aide said." So the Boehner meeting with the Republicans took place before the meeting with the Republicans up at the White House. Now, this business of coming up with a deal that cuts spending over 12 years but raises revenue right now, again, we've been there and done that. It's as old as the Democrat Party the playbook, and it ought to be a nonstarter.
They ought not even advance beyond its proposal.
Reuters has a story, despite themselves, that says the federal government takes in enough money every month to pay the debt service. No possibility of default. So how can it be said repeatedly without challenge that we will default on our debt if the debt ceiling is not raised? We won't. There is no magic drop-dead date for default. Please, folks, this is not bluster. This is the truth. What would happen is that debt service would be paid. Whatever's left, the net would be used to fund ongoing federal activities, which means Obama would prioritize what does or does not get funded, but we would not default.
RUSH: You know, this is just me. It frustrates me, folks. It's just me. They've got Obama, the Democrats, the media, all talking about increasing revenues as opposed to raising taxes, and even Boehner, according to Politico, is drawing a distinction between the two. "Well, tax increases are off the table. Well, we are looking for ways to enhance revenues and so forth." They need to stop talking about revenues. Why do we even have a debt limit? I just fear they're not approaching this right based on what I know. Here's what they ought to be saying in this meeting, and I know it's easy for us as outsiders to concoct all this.
You go in there and you say, "We are Congress. You don't have the power to spend any money unless we authorize it first. You don't. And we are telling you that we are not funding this anymore. We're not funding your agenda anymore. We're not going to fund another dime. Now, it's up to you, Mr. President, to live within the budget that we give you, under the debt ceiling we give you." Folks, even Brit Hume said that it's been a long time since a president was this weak, this powerless, this imperiled in Washington, DC. You know it and I know it. If the election were held tomorrow, this guy goes down in flames in a major, huge landslide. He said this on Fox: "From unemployment to pretty much everything else, President Obama is failing in the job and failing to connect."
Brit Hume saw Obama's Twitter town hall as something amounting "to a Potemkin village populated by straw men, for the purpose of shoring up the president’s sagging youth vote. It wasn’t a real town hall meeting with real back and forth. ... the event was boring, transparently one-sided, and the most entertaining thing about it was watching or thinking about all the questions that were getting filtered away from the president." But Brit Hume's opinion is that Obama is in as full a political retreat as this town as seen in years, and he is. He is the one who could be forced to cave on this.
Now, I don't know, maybe respect for the office or some such thing that makes them want to be collegial and congenial about this, but you can go in there and be as polite as you want to be, and you say, "We are Congress, and we are not raising taxes. And we're not paying for this anymore. We're not funding this anymore. It's up to you, Mr. President, to live within the budget, under the debt ceiling that we give you. You'll pay our bills, you'll cut other spending, and we'll ask that you did it in a way that adversely effects as few people as possible. Now, do it." If you have an opportunity to talk to the guy, this is what you say. Obama is in as full a political retreat as this town has seen in years. Nothing he's doing is working. You can't point to anything and say we need to keep doing more of this, so why are we even talking about doing more of it?
Folks, as I say, it's just me, and I know it's not my job, and it's probably much harder than what it seems to me to do this; I know, armchair quarterbacking, easy to sit here, radio studio, you tell 'em and you tell 'em and you tell 'em, but to me it's politically smart, plus it's true.
RUSH: I mentioned a piece by James C. Capretta, National Review Online. Let me read some excerpts from this 'cause he's got the same point. The Republicans hold all the cards. I hate to keep saying "I said yesterday," but I did. Obama is the one that can be made to cave here. He's got nothing, folks. He's got nothing. It's a total win-win for the Republicans to hold firm on this, and they need to remember this "read my lips" business and they need to remember all these times in the past where massive cuts in spending were promised way down the road in years we can't even see. We got the tax increases right now, it never works.
Mr. Capretta: "As the debt-ceiling showdown heads into its final stages, the political maneuvering has intensified, with both sides seeking to gain the upper hand in the public-relations war. Leaders from both parties know the stakes in this fight are very, very high; confrontations of this sort tend to become defining moments in political life, for good or ill. At this stage, anything could still happen, with many scenarios still in play. But for Republicans, there are reasons to worry that this showdown could be headed toward a political and fiscal debacle if they are not very careful.
"It wouldn’t be the first time Democrats got the better of Republicans in a budget fight. In 1990, Richard Darman, who was director of the Office of Management and Budget, wanted to strike a budget deal to bring projected budget deficits down by $500 billion over five years. As a precondition for entering the talks, however, Democratic Senate majority leader George Mitchell," who was the most partisan man in Washington at the time, "demanded that Pres. George H. W. Bush renege, in writing, on his 'no new taxes' pledge. The president did so at Darman’s urging, and from that moment on, the president’s standing and leverage plummeted. At crucial moments in the ensuing process, the tax increases kept getting larger and more onerous, and the spending cuts and entitlement reforms kept getting more ephemeral. In the end, it was just a question of how bad the political fallout would be for the president, which of course turned out to be very bad indeed.
"In the current fight, it’s quite clear what President Obama and his allies are trying to accomplish. First, they want a package upon which the president can campaign in 2012. Something on the order of a '$3 trillion deficit-cutting program' (no matter how phony) -- or even $2 trillion -- would help the president downplay the big-spending, liberal image that most independent voters now have of him." He come along and say, "Guess what I engineered here? Two, three trillion dollars deficit reduction. I did it."
"Second, the president wants to raise taxes without getting blamed for it. Hence the disingenuous cat-and-mouse games aimed at luring Republicans into accepting tax hikes behind closed doors so that the president never actually has to take ownership of them before they become law. ... Third, and most important, Democrats want a deal that doesn’t give an inch on what really matters to their voting base -- which is the entitlement status quo. The Democratic party has come to define itself as the party of entitlements. The New Deal. The Great Society. Obamacare. Nothing gets the Democratic heart beating quite like ensnaring the entire American middle class in entitlement dependence. For Democrats, victory means forcing Republicans to accept a budget framework that leaves today’s entitlement superstructure -- and most especially centralized government management of American health care -- exactly as it is today.
"To further that goal, the president and his allies are playing a familiar card. It’s not that they are against entitlement 'reform,' they say, it’s just that they want to protect the beneficiaries from any financial sacrifice. And so we learn in recent days that Democrats are willing to put sizeable Medicare and Medicaid 'cuts' on the table. Among the changes that are reportedly under consideration are further reductions in what providers of services and products are paid. ... And apparently some Republicans are willing to play along," which doesn't surprise me that there are some Republicans who think this is the way to go out and grab independents.
"These kinds of changes in Medicare and Medicaid are nothing new. Various versions of them have been included in every budget deal going back 30 years, and most especially in the bipartisan deals of 1990 and 1997. They do not constitute genuine entitlement reform. They will not fix Medicare and Medicaid. And they will not solve the nation’s budget problem."