The House Speaker has no leverage on the Bush tax cuts. We should stop taking him seriously [View all]

[DonViejo]

Boehner Is Bluffing

The House Speaker has no leverage on the Bush tax cuts. We should stop taking him seriously.

By Matthew Yglesias|Posted Friday, Nov. 9, 2012, at 3:04 PM ET

Remember the famous scene from Raiders of the Lost Ark when Indiana Jones faces off against a guy who unsheathes a scimitar and wows the audience with his fancy swordsmanship--only to get shot in the chest by Indy? The swordsman—that’s House Speaker John Boehner right now on the Bush tax cuts. Whether it’s out of deference to the office, eagerness to have an interesting story to write about, or plain gullibility, every congressional reporter in town is now dutifully reporting on his negotiating strategy. But this fight is over. Boehner has brought a knife to a gunfight, only nobody seems to have told anyone in the conservative movement.

To recap, the basic situation is this. Back when George W. Bush was in office, he wanted to cut taxes. And he wanted to disguise the cost of his tax cuts. So he had his allies on Capitol Hill write the legislation so that the tax cuts would automatically expire at the end of a 10-year window.

That window closed at the end of 2010. But during the 2010 lame-duck session, Republicans were riding high on electoral victory and the Obama administration was concerned that tax hikes would hurt the economy. So they cut a deal to extend the Bush tax cuts two more years into the 2012 lame-duck session. It was a smart idea for everyone concerned. With the economy weak, there really was no case for a short-term tax increase, and this way the presidential election would resolve everything. If Obama lost, his GOP opponent would surely sign a permanent extension of the Bush tax cuts. But if Obama won, then he’d block any extension.

As you probably heard Tuesday night, Obama won.

Obama’s party also gained two Senate seats and a handful of seats in the United States House of Representatives. Consequently, the Bush tax cuts are toast. This is a question of fact, not of interpretation. The American political system is full of checks and balances, and the way the game works is that tie goes to the status quo. And in this case, the status quo is that the tax cuts expire. Conservatives can perhaps console themselves with the realization that the expiration isn’t an underhanded liberal trick. It’s their own trick, undertaken to make the apparent cost of the tax cuts smaller. Next time, having learned their lesson, they should just pass a smaller, but more permanent, reduction in taxes. If they’d done that, then Obama would have no power to force higher rates on the country. He could beg and plead for a grand bargain day and night and it still wouldn’t happen. The cold hard reality is he doesn’t have the votes in the House to raise taxes and he can’t get the votes because the House is locked down for the GOP thanks to well-drawn district boundaries.

read more:
http://www.slate.com/articles/business/moneybox/2012/11/boehner_and_the_fiscal_cliff_the_house_speaker_is_bluffing_about_the_bush.html