After Boehner’s Plan B, crafting a new plan for Republicans
House Speaker John Boehner has struggled for weeks to unite his fellow Republicans around a deal to avert the fiscal cliff. Having failed to find a package of tax increases and spending cuts acceptable to the Obama administration and the House GOP, he pivoted to a politically shrewd “Plan B” that would have extended all of the Bush-era tax cuts except for the high-income rate reductions that applied to income above a $1 million threshold. But as Boehner and his lieutenants worked to rally support, they found that they didn’t have the votes to pass “Plan B.” And so Boehner has suffered what is widely regarded as a humiliating defeat, one that has left many observers wondering whether he can survive for long as speaker.
Whether or not Boehner manages to regain his standing with House Republicans, his defeat raises a number of more significant questions about where Republicans should go from here.
Until the next presidential election, Boehner and the House Republicans are the face of the GOP. There are, to be sure, a number of talented Republican governors, yet most of them are either deeply engaged with issues close to home or too obscure or low-wattage to have much of a national impact. All but a handful of House Republicans represent constituencies with substantial Republican majorities, thanks in no small part to the influence of Republican state legislators in drawing district boundaries. The GOP is thus likely to hold the House for years to come, even if Hillary Clinton wins the White House come 2016. Like it or not, conservatives need the House GOP to get its act together sooner rather than later. But how?
The first question is whether Republicans are right to oppose President Barack Obama at every turn. Very early in 2009, a number of House Republicans, including House Majority Leader Eric Cantor, were resigned to the notion that they would have to cooperate with President Obama given the size of his mandate. But the fight over the fiscal stimulus law stiffened the resolve of conservatives, who were convinced that the president had failed to argue in good faith. The president’s allies see this differently, of course. Many on the left believe that the House GOP was intransigent from the start. Another view, however, is that if the Obama administration had embraced substantial increases in defense procurement as part of the stimulus law, a large number of Republicans would have defected, giving the president a significant bipartisan victory. Regardless, distrust between the House GOP and the Obama White House ran deep, and it was exacerbated by the growing assertiveness of grassroots conservative activists and the debate over health system reform.
The expiration of the Bush-era tax cuts might represent an opportunity for a reset. One of the virtues of “Plan B” is that it was identical to a proposal that had been advanced by Senator Charles Schumer (D-NY) and House Minority Leader Nancy Pelosi (D-CA) last year, and so it could be characterized as bipartisan in inspiration. Moreover, it represented a concession to the political reality that a large majority of American voters favor tax increases on high-earners. But as Boehner’s GOP opponents understood, “Plan B” also represented an implicit endorsement of a tax increase. Expiration effectively means that Republicans can start with a clean slate, albeit at a higher tax rate.
By letting the clock run out on Bush tax cuts, Republicans will not have voted for a tax increase, and they will be in a position to do something about the automatic tax increase to come. In the short term, House Republicans could extend an olive-branch to the Obama White House by proposing a large “tax-reform refund,” like that proposed by President Obama’s former budget director Peter Orszag. All wage-earners and Social Security beneficiaries would receive a substantial payment designed to offset the economic impact of the fiscal cliff. Meanwhile, Republicans could devote themselves to crafting an attractive tax reform package that would raise somewhat more revenue than the Bush-era tax code but far less than the post-cliff tax code.
And as Republicans rethink the tax code, they should keep in mind the need to advance larger conservative goals. Last week, we discussed a number of tax reforms that would encourage spending restraint at the state and local level, encourage donations to religious institutions, and protect the interests of middle-income homeowners while effectively shifting the tax burden to high-income voters living in high-tax, high-cost jurisdictions. Going further, the GOP might endorse a greatly expanded child tax credit as a way to recognize the enormous human capital investments parents make in their children. Taken together, this would represent a compelling, affirmative agenda that would break House Republicans out of the box of doing little more than just saying no.
PHOTO: U.S. House Speaker John Boehner (R-OH) (R) and House Majority Leader Eric Cantor (R-VA) speak to the media on the “fiscal cliff” on Capitol Hill in Washington, December 21, 2012. Boehner said on Friday that congressional leaders and President Barack Obama must try to move on from House Republicans’ failed tax plan and work together to resolve the looming U.S. “fiscal cliff.”