There won’t be a fantastic budget deal tonight, and the President won’t get His big economic victory. The BBC seems to think that only the “newly empowered Republicans” are causing ideologically-driven obstacles to agreeing on a debt package.
When the Congressionally-set debt limit has been reached in the past, Congress has voted to raise it.
This year, however, newly empowered Republicans are determined to prevent any tax increases and want to see aggressive measures to reduce the deficit in exchange for agreeing to raise the debt ceiling.
Actually, they’re prepared to allow some of the class-war taxes (e.g. the expiration of the Bush tax cuts) in exchange for real lowering of the overall tax burden in the near future. The BBC knows that the President needs a big score here, as most people simply don’t trust Him to fix the economy right now.
The Obama administration wanted “the biggest deal possible” on debt reduction, Mr Geithner told NBC’s Meet the Press.
And now it looks like He’s not going to get one. So, who is to blame? The White House version, as told by the Washington Post, is the class war angle.
“We cannot ask the middle-class and seniors to bear all the burden of higher costs and budget cuts. We need a balanced approach that asks the very wealthiest and special interests to pay their fair share as well, and we believe the American people agree,” White House communications director Dan Pfeiffer said in a statement.
The BBC, naturally, echoes it:
But it also involved tax hikes and closing tax loopholes for the wealthiest Americans, something opposed by many Republicans.
In a statement released late on Saturday, Mr Boehner said he was pulling back from the $4tn package because it involved tax increases.
“Despite good-faith efforts to find common ground, the White House will not pursue a bigger debt reduction agreement without tax hikes,” he said.
The quotes from Boehner seem to support the White House’s side of the story. Except here’s the part the BBC doesn’t want you to know about the tax deal.
The White House isn’t giving in on any of the entitlement reforms they promised they’d make in exchange for the Republicans giving in on the quick tax rises I mentioned above. In fact, they want even more tax increases right at the time when the smart money says that’s the worst thing to do.
The Republican source said the Boehner-Obama effort stalled over taxes. After Boehner pushed the president to pursue major entitlement changes in the debt deal, Obama insisted on additional revenues, which Democrats have demanded throughout the deficit discussions. The Speaker, according to the Republican source, said the new revenues must come from economic growth and broad-based tax reform, not straight tax increases. The Republican said the White House rejected a Boehner proposal offered on Friday for “the core elements of tax reform.”
“A gulf also remains between the Speaker and the White House on the issue of medium and long-term structural reforms,” the Republican said. “Consequently, the Speaker believes a package that is smaller but still consistent with the standards he has outlined may now be the most appropriate option.”
The White House says it’s not true, but then read this:
WH is demanding major, unambiguous tax hikes. To get spending caps & entitlement tweaks, greater economic pain appears to be the WH’s asking price. It is increasingly likely that we aren’t going to see a ‘big’ deal if the WH doesn’t budge. Speaker looks to be holding strong. …
Their fierce insistence on higher taxes is beyond bizarre.
After months of demanding ‘clean’ increase to avert economic calamity (default), WH threatens economic calamity (default) unless they get economic calamity (trillions in tax hikes). No wonder these guys are governing over an economic calamity (9.2% & growth malaise), w an economic calamity on the horizon (debt explosion as mapped out in president’s budget).
The President’s own Comission He set up to look into this approved the Republicans’ notion of overall tax reduction and reform, but He won’t do it. None of this is in the BBC’s coverage. They either don’t have good enough sources, or just don’t feel like telling you.
It’s ideological. He’s too partisan, too stubborn, too stuck in class war mode. The result will be that Boehner will walk away tonight and we’ll end up with a smaller quick fix which won’t be the economic home run the President needs. He’ll have done it to Himself, but it will be spun as the Tea Party destroying the country, and Republicans selling out the country to protect the wealthy. That will be the story the BBC will tell you. And they won’t tell you what He really did.