The news media are excitedly telling us that (some) Republicans are announcing their readiness to keep all the Bush tax cuts in place in exchange for cuts to Social Security, Medicare, and Medicaid. This has been portrayed as “a big concession,” “willingness to compromise,” and “softening their stance.”
Steve Benen points out what it really is: “[O]n the one hand, Republicans would get the tax rates they want. On the other hand, Republicans would also get the entitlement changes they want.”
House Speaker John Boehner said Republicans are interested in a deal that would include higher tax revenue “as a byproduct of a growing economy, energized by a simpler, cleaner, fairer tax code, with fewer loopholes, and lower tax rates for all.”
But this is the same as Willard (“Mitt”) Romney’s plan — cut tax rates, limit deductions and then assume that a surge in economic growth will magically produce higher revenue. A plan firmly rooted in Arthur Laffer’s fantasy land, where tax cuts pay for themselves. And Republicans think they deserve cuts to social safety net programs in exchange for agreeing to the Romney tax plan, which was just rejected by a majority of voters three weeks ago!
UPDATE: Josh Marshall:
The big ‘breakthrough’ of the day is the apparent willingness to put ‘revenue’ on the table in on-going tax, budget, fiscal cliff, whatever-the-new-name-is-today discussion. But only one caveat: they’re now willing to raise revenue, just not raise rates. This is silly.
…We’ve been doing this for a century. When you want to efficiently raise revenues, you raise rates. A major simplification of the structure, rooting out all the miscellaneous loopholes and special interest deductions, is probably also a good idea. But that’s for fairness and efficiency. Not what you do if the federal coffers simply need more money.
…President Obama holds all the cards on the Bush rates. Just let them expire. Once they do, if Republicans really want to take it that far, come back on January 3rd with the new Obama Middle Class Tax Cut bill. The House can pass it or not.