President Obama has threatened to veto any legislation that attempts to eliminate the automatic penalties for Super Committee failure. But on January 1, 2013 — the same day the automatic, across the board spending cuts are scheduled to take effect — all of the Bush tax cuts are set to expire. And the White House plans to use the threat of full expiration the exact same way they’re using the threat of sequestration — to force Republicans to accept a higher tax burden on wealthy Americans.
“He won’t sign a full extension,” said one Senior Administration Official at a White House background briefing for reporters on the Super Committee.
“I think if you look at everything that happens in January 2013, it is a compelling argument that there’s a need to make real policy,” said another Senior Administration Official. “And I think the fact the sequester will hit in January 2013 and the expiration of the tax cuts hits in 2013, the right thing to do is tax reform that has both positive impact on the economy and is fair in terms of distribution of the tax burden, and then balanced savings that share the burden amongst all the different parts of the budget from the very rich to people on Medicare and Medicaid.”
If you despise government indiscriminately, the Super Committee’s inaction doesn’t really matter on it’s own — it just means more spending cuts. “Super Committee could not agree how to cut $1.2 Trillion,” tweeted anti-tax crusader Grover Norquist. “So now we ‘sequester’ (french for “cut”) $1.2 Trillion. This is failing, how?”
True enough. But unless the White House changes its tune, members of Congress won’t just have a choice between lower spending and higher taxes. If Republicans dig in their heels and refuse to raise taxes on the wealthy, then taxes will go up automatically. Democrats proved in the Super Committee negotiations that they have the nerve to hold out on spending cuts until Republicans toss Norquist and his fellow conservative activists under the bus. Unless that changes, it’s a powerful incentive for Republicans to change their strategy — and their orthodoxy.
Brian Beutler
Brian Beutler is TPM's senior congressional reporter. Since 2009, he's led coverage of health care reform, Wall Street reform, taxes, the GOP budget, the government shutdown fight, and the debt limit fight. He can be reached at brian@talkingpointsmemo.com.
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