House Speaker John Boehner offered a counterproposal in negotiations to avoid a leap over the fiscal cliff, but the increases in tax revenues contained in his proposal have apparently riled the right-wing contingent of the House Republican caucus.
President Obama is right to insist that any tax and budget package designed to avert a plunge over the cliff must include higher tax rates on wealthy taxpayers. Boehner has not been willing to embrace tax rate hikes, but has offered the elimination of various unspecified deductions and loopholes. He is channeling the platform of defeated candidate Mitt Romney.
But even raising revenues by closing loopholes seems to be anathema to the Tea Party right, throwing into stark relief the dilemma in which the nation finds itself.
The Republican majority in the House has adopted rules that require any bill considered by the full House to have support from a majority of the majority Republicans. In other words, under those rules, Boehner is prevented from fashioning a compromise by patching together a coalition of Democrats and moderate Republicans, if those moderates don’t total a majority of Republicans.
The effect is to subject the entire government to the iron rule of an ideologically rigid fragment of the majority party within the House. Thus, the refusal of the Tea Party right to compromise can have the effect of paralyzing the president, the Senate and what could conceivably be a majority in the House made up of Democrats and reasonable Republicans.
In this way the battle over the fiscal cliff is a naked struggle for power. The Tea Party right has shown it is willing to threaten the welfare of the U.S. economy to get its way. Though the American voter repudiated the Republican candidate for president and widened the Democrats’ hold on the Senate, right-wing House members appear determined to dictate their terms on the economy.
Obama cannot let that happen. Thus, he has signaled that he is willing to let the nation go over the cliff, which means that as of Jan. 1, automatic tax increases and spending cuts will take effect. Economists say these automatic austerity measures are likely to create a new recession. After Jan. 1 responsibility for averting recession would be on the shoulders of Congress. If the right wing refuses to help rectify the problems created as a result of the fiscal cliff, they threaten to marginalize themselves.
The sweeping spending cuts and tax hikes due on Jan. 1 could have dire consequences, as a story in the Herald described on Wednesday. A host of nonprofit organizations in Vermont channel federal dollars to numerous programs, including heating aid programs, food banks and other vital human services. Schools depend on federal dollars. Numerous state programs depend in part on an infusion of federal money. Defense spending would experience drastic cuts that will be felt all across the country. In addition, tax rates will rise for everyone. All of these effects — amounting to austerity on steroids — stand to remove so much money from the consumer economy that recession is the expected result.
After Jan. 1 Congress can take action to avert these effects. It can cut middle class tax rates back to present levels, leaving in place the higher tax rates on wealthy taxpayers, as demanded by Obama. It can extend unemployment benefits, which are due to expire. It can restore, as needed, the human service and defense spending that would otherwise suffer draconian cuts. If the Tea Party right tries to stand in the way of those ameliorative measures, it is hard to see how the wrath of the nation would not descend upon it.
The Tea Party, which burst upon the scene in 2010 after major gains in the House, may see the ground beneath its feet washing away with surprising rapidity if its obstructionism continues to block action. Once we are past the fiscal cliff, the right wing’s anti-tax radicalism may doom it to irrelevance.