A $TRILLION tax increase is the price Obama and the Democrats have demanded for any deal on the debt. It's a deal breaker for Republicans and the Dems know it. It's also bad economic policy as Obama himself explained in 2009:
From the Weekly Standard:
In August 2009, on a visit to Elkhart, Indiana to tout his stimulus plan, Obama sat down for an interview with NBC’s Chuck Todd, and was conveyed a simple request from Elkhart resident Scott Ferguson: “Explain how raising taxes on anyone during a deep recession is going to help with the economy.”
Obama: I'll Raise Your Taxes After I am Re-elected!
Obama agreed with Ferguson’s premise – raising taxes in a recession is a bad idea. “First of all, he’s right. Normally, you don’t raise taxes in a recession, which is why we haven’t and why we’ve instead cut taxes. So I guess what I’d say to Scott is – his economics are right. You don’t raise taxes in a recession. We haven’t raised taxes in a recession.”
When Obama warned about the consequences of raising taxes, the economy was moving away from recession—growth in the fourth quarter of 2009 was nearly 6 percent. Today, however, economic growth has slowed to less than 2 percent. Even before the horrible June jobs report, economists were warning about the “substantial” possibility of a double-dip recession. Many others agreed after the news last week. “In addition to the shock value…we need to seriously question whether a double-dip is there,” David Ader, chief treasury strategist at CRT Capital, told CNBC. “I would say it’s back on the table.”
If raising taxes in a recession would be “the last thing you want to do,” wouldn’t raising taxes in a struggling economy teetering on a double-dip be the second last thing you’d want to do?
Obama made a similar argument in December, when he signed the bipartisan tax relief agreement – a deal that maintained Bush tax rates (even for the wealthy) and included additional tax breaks for businesses. “Millions of entrepreneurs who have been waiting to invest in their businesses will receive new tax incentives to help them expand, buy new equipment or make upgrades – freeing up other money to hire new workers.”
In Monday's Press Conference Obama insisted that he wouldn't raise taxes immediately but would wait until 2013, after the election [video]. But doesn't this raise the question of how businesses can plan for the future on the basis of uncertain policy from Washington? And how can those concerned with the massive increase in debt and spending under Obama have any assurance that the situation will be seriously addressed if Obama insists we punt the hard stuff off to future years when another President or another Congress may not accept an earlier deal?
Once again, we are in the midst of another example of a failure by Obama to lead at a critical moment. He and the Dems are trying to dump all the responsibility for failure of these debt talks on Speaker Boeher, but Boehner is the only one of these key players who seems to understand the reality of the situation.
The bottom line is that Obama is trying to enshrine massive increases in wasteful federal spending that have failed to produce results for the American economy yet do reward Obama's political base. Republicans would not only be fools to allow Obama to snooker them on this one considering the history of budget deals (see below) but it would also be an abdication of their constitutional duty and common sense.
Obama and the Democrats are "stuck on stupid" as General Honore is famous for saying. Doubling down on failure is not something any Republican should support. Republicans must stand firm in rejecting this fiscal insanity!