Even though control of the White House, Senate, and House remains the same as it was before the election, the negotiation among them has been turned on its head. Hence the manifest desire on the part of Republicans to reach an accord on immigration reform. That’s good news for everybody—except maybe Maricopa, Arizona Sheriff Joe Arpaio of course. Maybe, just maybe, he’ll finally be exorcised from our national political dialogue.
Despite this power shift, Republican posturing on the so-called fiscal cliff and its related issues—namely the debt ceiling and tax rates—has remained bizarrely similar to what it was before the election. They have absolutely no give on the notion of raising tax rates for the wealthiest. Republicans continue to repeat their favorite meme—just close loopholes—without ever specifying which loopholes, or explaining how it’s mathematically possible to close loopholes and raise enough revenue without crushing the middle class. Why no explanation? Simple: it’s not mathematically possible.
The Republican political calculus—and it may just be right—is that they can put together a 50-percent-plus-one coalition if they include Latinos, yet they don’t give any ground on their fiscal platform.
Whether they are right or wrong politically is up for debate. What is certain is that they are wrong substantively.
And that is why I and many others—see Paul Krugman’s piece in the New York Times—state with certainty: No deal. Mr. President, do not make a deal on fiscal issues with the Republicans right now. Call their bluff. Stare them down. Tell them to go over the cliff and enjoy the ride.
The public gets it. The public understands that rates should go up for the wealthiest. Look at every poll on the matter. Mr. President, you need to tell Speaker Boehner that the time for elliptical answers and vagueness is over. Tell him that if he wants to have a substantive conversation on fiscal negotiations, it’s time he put his cards on the table, face up. Ask him to explain exactly which loopholes he’d like to close.
Ask him to explain how those loopholes could be closed without decimating the middle class. Tell him the time for specifics is now.
Mr. President, it’s also time for you to announce some specifics of your proposed deal. Start by eliminating the capital gains rate, the tax rate applied to most dividends, stock sales and the infamous carried interest that benefits hedge fund managers. Make it clear this is an essential part of any deal. Capital gains should be taxed as ordinary income.
It’s time to be tough.