The latest wrinkle in the debate over the so-called fiscal cliff is the attempt by House Speaker John Boehner (R-Ohio) to get his fellow Republicans to swallow his "Plan B" -- essentially a proposal that would allow taxes to be hiked on millionaires in order to prevent a deal from being born that's more amenable to President Barack Obama. If we are more poised to "go over" the "cliff" now than we were before, it's because "Plan B" has been deemed a complete non-starter by a White House who -- once again! -- was willing to make a deal on reforms to earned-benefit programs like Medicare that would make previous Republican House caucuses so numb from happiness and hugging that you'd think they'd been slipped a potent dose of Ecstacy.
Nevertheless, "Plan B" has precipitated something of a watershed moment in politics, because now even Grover Norquist is sort of acceding to the reality of tax increases by offering a radical, late-stage work-around to his famous "pledge" that is supposed to enjoin legislators from raising taxes in any circumstances. The news went out that pledge signees are allowed to sign on with Boehner's "Plan B," via a statement from Norquist's Americans For Tax Reform:
ATR has consistently maintained that individual Members of Congress make a pledge to their constituents to oppose and vote against tax increases. The House this week will vote on a tax bill. This legislation--popularly known as “Plan B”--permanently prevents a tax increase on families making less than $1 million per year. Republicans supporting this bill are this week affirming to their constituents in writing that this bill--the sole purpose of which is to prevent tax increases--is consistent with the pledge they made to them. In ATR’s analysis, it is extremely difficult--if not impossible--to fault these Republicans’ assertion.
In particular, in this Congress the House has already voted twice to prevent any tax increases on any American. When viewed with this in mind, and considering this tax bill contains no tax increases of any kind--in fact, it permanently prevents them--matters become more clear. Having finally seen actual legislation in writing, ATR is now able to make its determination about a legislative proposal related to the fiscal cliff. ATR will not consider a vote for this measure a violation of the Taxpayer Protection Pledge.
So, the new position from Americans for Tax Reform is that they could totally allow their be-pledged lawmakers to raise taxes on some people, because they've previously done an adequate job of not raising taxes, and if you squint at "Plan B" the right way you can imagine it's not, technically, a tax increase. The backbone of this new position, hilariously, is the presumption that "Plan B," if enacted, "permanently" prevents further tax increases. As anyone with even a basic understanding of civics can tell you, no Congress can bind a future Congress from enacting legislation of their own, and so the notion that any tax policy can be made "permanent" is laughable.
Nevertheless, Norquist seems to be Boehner's only ally in this fight and that is proving to be rather insufficient to the task.
The White House, naturally, is going to pass on "Plan B," because they have more than enough leverage to get more of what they want on the tax side of negotiations. But if that wasn't enough, the simple fact of the matter is that Boehner's "Plan B" proposal has primarily succeeded in fracturing his own party, far beyond Grover Norquist's ability to repair. Sen. Orrin Hatch (R-Utah), the ranking member on the Senate Finance Committee, has already scoffed at Boehner's proposal. Rep. Jim Jordan (R-Ohio), who chairs the Republican Study Group, has also said no to "Plan B."
The original idea behind "Plan B" had a touch of genius to it, and in less woolly-headed times in the lives of Republican legislators, everyone would have understood that "Plan B" was essentially a "bait-and-switch" maneuver designed to worsen the president's bargaining position and force the members of his party into awkward explanations. (Of course, in less woolly-headed times, the GOP legislators would have agreed to the "grand bargain" Obama offered Boehner years ago.) Jonathan Chait offers a good explanation of what Boehner's thought process was:
In 2010, when Democrats still controlled both houses of Congress, Obama wanted to extend the Bush tax cuts on incomes under $250,000, only to see his proposal fall apart as panicked Democrats in both houses fell to pieces over the prospect of raising taxes on the rich, with some proposing a higher income threshold and others insisting they wouldn’t allow taxes to rise on anybody. Senate Democrats, in a word, suck.
So Boehner is floating Plan B as an attempt to reprise the 2010 Democratic fiasco -- in the absence of a deal, House Republicans would pass their under-$1,000,0000-salary tax cut and enough nervous Senate Democrats would go along with it, putting Obama in the position of standing in the way of tax relief for most Americans. Obama would veto Plan B if it passed, but getting his signature was never the point. This scenario would strengthen Boehner’s leverage, possibly making Obama afraid to take the fight into January and more likely to make concessions between now and then.
The Heritage Foundation's statement opposing "Plan B" essentially says, "Welcome to the Jim DeMint era, Mr. Speaker":
On Thursday, the House is expected to vote on “Plan B,” which would allow tax rates to increase on some Americans and small businesses. The plan is based on an idea floated by Senator Chuck Schumer (D-NY) in 2010 and endorsed by House Minority Leader Nancy Pelosi (D-CA) earlier this year.
America’s coming fiscal crisis is a result of overspending, not under-taxing. Allowing a tax increase to hit a certain segment of Americans and small businesses is not a solution; it is a political ploy.
The Heritage Foundation explains that such a “maneuver succeeds only if the House Republican leadership permits it.” Moreover, decoupling the 2001- and 2003-era tax rates would “constitute a clear path toward surrender on conservative principles.” Taking money out of the private sector to fund the public sector is not only misguided, it is counterproductive. Reversing course on the need for higher taxes will only serve to embolden the left’s big-government agenda. History has shown tax increases do little to stem annual deficits; in fact, deficits tend to increase.
To date, President Obama has proven to be fundamentally unserious about tackling our nation’s coming fiscal crisis. America needs real leaders proposing real solutions, such as those found in Heritage’s Saving the American Dream plan or even the previous House-passed budget. That seriousness of purpose is undermined when a political party embraces the other side’s political gimmick, as is the case with the Schumer-Pelosi tax plan.
Yes, it would seem that the folks at Heritage do not appreciate the bait-and-switch aspect of Boehner's idea at all, and now everyone who follows Heritage has associated Boehner's "Plan B" with the idea of a "Schumer-Pelosi tax plan," which is not good for Boehner's position at all.
Similarly, the Club For Growth has opposed "Plan B" -- on the grounds that any sort of "bargaining" is wrongheaded:
The Club for Growth urges all House members to vote "NO" on the rule for the so-called "Plan B" tax increase. Consideration of the bill is scheduled for later this week. The vote on the rule will be included in the Club's 2012 Congressional Scorecard.
On the substance, this bill is anti-growth. It increases tax rates for those making over $1 million while also raising taxes on capital gains and dividends. We don't buy into the Washington-speak, suggesting that these are actually tax cuts.
Also, it's no secret that this bill is not a final product, but a bargaining tactic to make a larger deal even worse. As such, we cannot support it just on substance, but also the procedure which dictates its consideration. Therefore, we are urging all members to oppose the rule.
Boehner is basically learning that it's hard to play chess when all of his nominal allies haven't yet mastered checkers.
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