Bipartisanship, Compromise, and the Conservative Movement

The Conservative movement, and the Republican Party generally, need to cut out the internecine sniping and concentrate on the real problem: the destruction being done by current—and over the last 80 years—Progressive policies.  Herewith, some advice, even though it’s unasked for.

You need to study the Progressive movement and the mechanism they’ve used for making the gains they’ve made up to the Obama administration, and the naked power grab in which the Obama administration is engaged.  Until Obama, they made their gains by sticking to their core principles and accepting smaller changes than they wanted—to keep you coming along, while they made those smaller, but positive, gains in their direction.

You of the Conservative movement, similarly, need to stick to your core principles, but you must be willing to take incremental steps, and to accept gradualism in moving things back to the right, back to limited government.  This, of course, means you have to become better communicators, too, getting out into the neighborhoods of your and your Democrat neighbors’ constituents and into their newspapers and televisions.  In this era of a news “medium” that’s generally hostile to Conservative principles, you also have to learn to bypass this medium as well as use it: that’s what the social media are for.  The NLMSM can’t manipulate those.

In last five years, the Progressives have gotten their way with a my way or the highway, all or nothing, tactic because they’ve had the votes to force it in the first part of that period, and in the last three years, they’ve still had the luxury of no coherent, united opposition, even when they didn’t have the votes in one branch of Congress.  Get over yourselves.

These last several years, with the euphoria of the 2010 election outcome and the bitterness of the 2012 outcome having clouded your judgment, you’ve been trying for yourselves the Progressive all or nothing tactic.  How’s that been working out for you?  You demanded no tax increase at all in the fall of 2012 Fiscal Cliff fiasco, even scotching Boehner’s Plan B before either getting a vote in the Senate (putting each Democrat, individually, on record as rejecting a small increase in favor of a big one) or forcing Reid, Schumer, and Durbin onto the record as being too afraid of the issue even to permit a vote.  Your result was an even bigger tax increase—on $400k or more income—than you could have gotten away with.  This is not progress at all; you lost ground.

You demanded to entirely defund Obamacare in one fell swoop, even at expense of shutting down government.  That felt good, surely, but it was very damaging politically, hurting your and Party chances in the Senate elections in 2014.  And the concrete result here was another spending increase.  Again, you lost ground.

Now you’re demanding a total rewrite of the tax code all in one fell swoop, ignoring the lessons of the Obamacare law, which rewrote the health industry in one fell swoop—and is a failed law, as much because it overreached in one step as because of the goals of Obamacare.  You’ll get a similar lack of success from a whole hog effort on the tax code.

No.  You must move for compromise, for bipartisan solutions—if other party has a role in the solution, it’ll be a more stable foundation from which to move the question further in your direction on the next go-round.  Notice that: it’s possible to compromise while maintaining your core principles, while accepting smaller moves in your preferred direction than you want.  It’s what the Progressives have been doing for four generations.  Are they really that much smarter than you?

Furthermore, you must recognize that the work is never done, there’s always more for the next year, more for the next session.  Even were you to get, for instance, the tax code completely revamped all in one bill, it still would need improvement.  But working from a stable outcome generated this year makes working toward next year’s progress easier.

Thus: move incrementally, accept a smaller tax cut, for instance, or smaller spending cut, this year, while holding out for those cuts (and no accounting gimmicks, either: real cuts this year, not phantom reductions in growth rates in the out years), so you can work for further cuts in the other, or both, next year.

You must stop, for now, the arguments over raising the debt ceiling.  You don’t have the votes in the Senate to win this one today, and the Progressives in the Senate don’t care about the threat of default.  They know you’ll get the blame for it in today’s news climate.  Besides, and more importantly (gradually) cutting spending to less than tax revenues (while also cutting tax rates and—gradually—rationalizing the tax code) will lead to eliminated deficits for the current year, which will eliminate borrowing in the next year, which will make the debt ceiling irrelevant.

You Conservatives today are acting like Obama Progressives with your all or nothing, right damn now, positions, and that’s a losing proposition while you don’t have the votes, and it’s a losing proposition even were you to get the votes—look at the animus generated by the Progressives’ all or nothing, their way or the highway Obamacare.

To Conservatives, then: by all means, force a vote—in the Senate, too, or force Reid, Schumer, Durbin, et al., on the record as too fearful of a vote—on a debt ceiling raise paired with commensurate spending cuts, but then let the debt ceiling raise go through.  Don’t let that argument become a distraction from Obama’s failed Obamacare, his failed economic policies, his failure to promote job creation, his denigration of the private sector.  Stay focused and win the Senate while increasing your hold on the House in 2014, and do the same (while increasing your hold on the Senate) while winning the White House, too, in 2016.

Accept, separately, smaller spending cuts, a lesser tax reform than you want.  On those items’ passage, come back the next year, the next session, again and again, with more, building on the little steps—they’ll take you to the full cuts and the full reform.

With the victories in 2014 and 2016 (and in the later election cycles), you can begin serious repair of the Progressives’ damage.

To Republicans: listen to the Conservatives, incorporate their ideas.  They’re sound—and they won’t give ground as easily as you’ve done these last 80 years.  Your own performance has only been to allow the drift to the left, as the Democrats and their Progressives have executed incrementalism better than you’ve resisted it.

To RINOs: shut up.  Whacko bird-ism just makes you indistinguishable from Progressives.  You have no credibility.

To Conservatives and Republicans: develop a unified message that both of you can push.  And get out and push it.

Obama’s Obamacare Tax Increases

Here are many of the ones that start this year.  As does President Barack Obama’s war on marriage, using his IRS to prosecute it.

  • top marginal tax rate rose to 39.6% for those at higher incomes
    • $400,000 for single filers
    • $450,000 for married couples filing jointly
    • $425,000 for heads of household
  • itemized deductions and personal exemptions phase out as income increases
    • beginning at $300,000 for married couples filing jointly
    • $250,000 for singles
  • higher capital gains taxes—up to 20% for some taxpayers
  • additional 0.9% Medicare tax
    • on earnings over $250,000 for married couples filing jointly
    • $200,000 for singles and heads of household
  • 3.8% tax on investment income
    • on earnings over $250,000 for married couples filing jointly
    • $200,000 for singles and heads of household

Notice that marriage penalty.

Tax Breaks, Taxes, and Congress

Fox News niggles at the story.  Here’s a short list of tax breaks that are at risk of not being renewed (due to Democrats’ intransigence concerning cutting Federal spending, these tax “breaks” do increase the deficit), even though usually they are renewed early in the subsequent year:

  • tax credit for research and development: saving an estimated $6.2 billion in 2013
  • exemption that allows banks, insurance companies and other financial firms to shield foreign profits from being taxed by the US: saving an estimated $9.4 billion in 2013
  • break allowing profitable companies to write off large capital expenditures immediately, rather than over time: saving an estimated $34 billion in 2013
  • tax credit for producing renewable energy, including wind and solar, in plants built before the end of 2013: saving an estimated $116 million in 2013
  • provision that allows motorsport race tracks to more quickly write off improvement costs: saving an estimated $46 million in 2013.
  • tax break that allows TV and movie productions to more quickly write off expenses: saving an estimated $266 million in 2013.

And so on, for more than 50 such things.

Of course none of this would matter—and the associated lobbyists would be put out of work and have to find something useful to do, instead—in a régime of a low flat tax on all income of whatever source, with no deductions, exemptions, credits, what-have-you, that everyone pays.  And we’d have fewer market distortions from the social engineering folderol of the current tax policy.

Health Insurance Risk…Corridors

These are insurance company premium income/payout cost bands written into Obamacare that are intended to smooth out the transition from a quasi-free market in health insurance to the government run health welfare program that is Obamacare.  Under this program, insurance companies that are too successful are punished for that success by being forced to disgorge some of their income in the form of a tax on the premiums they collect, which the Feds then transfer to insurance companies that couldn’t hack the new program, so they get government support.

Only some companies that are having trouble need not apply for the bailout support—they just get to pay the vig without the payoff.

The IRS collects an annual flat amount specified by the Affordable Care Act to be allocated among the insurers according to market share.

But….  IRS regulations published in November excluded “any entity that is a self-insured employer to the extent that such employer self-insures its employees’ health risks.”  Since about four of five employers with more than 500 workers and most union-negotiated health plans are self-insured, they are spared from the tax.  So is insurance on behalf of “government entities,” such as original Medicare (but not privately run Medicare Advantage).

[Thus]…the tax burden falls on the saps who work for small businesses, the self-employed and individuals—i.e., the people who can least afford it.

Worse,

this [tax] is not deductible for corporate income tax purposes.  In other words, health plans pay the tax and then federal and state taxes on the taxed amount.  [Ex-CBO director Doug] Holtz-Eakin estimates this unusual taxes-on-taxes rule means that the effect on premiums is 54% larger than the dollar amount of the tax itself.

Hmm….

Some Thoughts on the Ryan-Murray Budget Deal

Americans for Prosperity President Tim Phillips has this one:

This budget compromise is not just bad policy, it is bad politics.  The American people remember hard-won bipartisan spending limits set by the sequester, and are not pleased to see their conservative representatives so easily go back on their word to rein in government over-spending.

The deal does, after all, increase spending to a skosh over $1 trillion (just about halfway to the Democrats’ spending call of $1.058 trillion from the current spending of $0.967 trillion), while increasing, slightly, defense spending (rather than the more draconian cut the sequester had scheduled for 2014) and increasing, slightly, discretionary spending—all paid for with spending cuts and fees elsewhere, with chump change left over for a net deficit reduction.  Yes, yes, this is a current increase in spending paid for with future cuts and fees.  See below.

American Conservative Union Chairman Al Cardenas has one, too:

The solution is not to walk away from progress and add over $60 billion in spending over the next two years.  We are not impressed by the cost cutting gimmicks and urge members of Congress to tell the budget conference to get back to work[.]

What’s your plan, guys on which the conference committee should “get back to work?”  With what votes, particularly in the Senate, do you claim your alternative (you do have something more intelligent than just “No,” yes?) can pass?

Certainly, there’s much to dislike in this compromise, but it’s good enough for the next year (albeit it covers the next two).  More importantly, blocking it is tactically stupid: it moves the focus in an election year to Republican intransigence, whether that’s a fair perception or not.

I have one, also.  Take the deal, lose the distraction.  Keep the election year focus on the failed Obamacare, on the anti-business Dodd-Frank, on the Democrats’ tax and spend demands, on the Democrats’ blowup of the Senate (picking any two (so long as one is Obamacare) in order to have that focus).  Win elections, then do the budgets that are necessary, repeal Obamacare (you do have a replacement plan ready to proffer, yes?), eliminate the CFPB, and so on with the votes to do so actually present in the House and in the Senate.

Quit being chuckleheads.  Quit being the Party of Stupid.