President Obama sent his Treasury Secretary, Timothy F. Geithner, to Capitol Hill on Thursday to make Republicans an offer they could only refuse. The administration’s proposed deal consisted of $1.6 trillion in new taxes, no spending cuts, a limitless debt ceiling and a multiyear stimulus plan that opened with a $50 billion binge just for 2013.
Mr. Geithner’s only concession in the closed-door meeting was a vague promise to work toward $400 billion in Medicare savings in the future — but nothing up front. The proposition was so pathetic that Senate Minority Leader Mitch McConnell laughed out loud, and House Speaker John A. Boehner declared “a stalemate.”
Meanwhile, President Obama continued his taxpayer-funded tax-hike tour in Pennsylvania on Friday. Despite outlining specific plans to collect additional cash from individuals who earn more than $200,000, Mr. Obama neglected mention of his intention to raise investment taxes and death taxes by reverting to the higher, Clinton-era rates. Mr. Geithner had revealed that bombshell in private.
“It would be devastating to the economy,” anti-tax crusader Grover Norquist told The Washington Times in a newsmaker interview on Friday. “This is one of the challenges the Democrats have. If they take you over the cliff, they do own that. Cap gains and dividend and business taxes are real.”
Mr. Obama would let the top capital gains rate jump from 15 percent to 23.8 percent, and dividend taxes would explode to 43.4 percent. These rates are even higher than those under President Clinton because they include a 3.8 percent Obamacare surtax.
The White House has exhausted available tax hikes on the living, so now it’s going after those in the grave with a death tax hike to 45 percent from the current 35 percent. More Americans will be swept into the provision by lowering the exemption to $3.5 million. If we go over the fiscal cliff, people will be smacked with an Internal Revenue Service bill of 55 percent of the value of estates over $1 million. So much for resting in peace.
Senate Democrats are trying to sow discord in Republican ranks. The No. 3 Democrat, Sen. Chuck Schumer, told reporters Thursday that the GOP was waffling on the terms of the Taxpayer Protection Pledge in order to give themselves political cover to raise taxes.
He listed Rep. Tom Cole of Oklahoma, Sen. Pat Toomey of Pennsylvania and President George W. Bush’s press secretary Ari Fleischer among Republicans he believed were searching for a way to break the anti-tax pledge. Flashing a Cheshire-cat grin, the New York Democrat claimed this handful was giving “a soft landing for Republicans on taxes.”
Fourth-ranking Democrat, Sen. Patty Murray of Washington, said that before the election, “Grover Norquist and his blood oath ruled the day. But now that election is over, and we are hearing Republicans renounce that once-sacred pledge.”
Mr. Norquist views this triangulation strategy as ineffective. “The Democrats aren’t interested in more money; they’re interested in Republican fingerprints on tax increases so they can crush the modern Republican Party,” the founder of Americans for Tax Reform told us. “Schumer’s not trying to help Republicans not raise taxes, he’s trying to convince Republicans to raise taxes.”
The GOP shouldn’t let its guard down for a moment in negotiations with Democrats, who will say anything to win.
Emily Miller is a senior editor for the Opinion pages at The Washington Times.