As part of his latest offer on the debt ceiling, House Speaker John Boehner has proposed a ceiling on future federal revenues, reports John McKinnon for the Wall Street Journal. The ceiling would limit total revenues to $36.2 trillion over the next decade, or $800 billion more than the amount that would be produced if current policies, including the Bush tax cuts, were set in stone. As McKinnon notes, Republicans hope that savings would come from “higher economic growth stemming from a streamlined tax system, rather than any policy changes that would be involved in a tax overhaul.”
In essence, this proposal is an attempt to match the administration’s earlier goal of $800 billion in new revenue without raising taxes and invoking the ire of right-wing House Republicans. Think of it as the lowest common denominator for Republicans. Of course, this makes it a terrible deal for the White House, especially given the alternative —next year, if the president does nothing, the Bush tax cuts will expire and taxes will return to Clinton-era rates. Over the next ten years, this would provide $4 trillion in additional revenue, cut the deficit in half, and stabilize the debt.
If President Obama is willing to go back on his campaign promise to freeze taxes on the middle class, then he doesn’t actually need to raise revenue as part of a deal on the debt ceiling. He could take a package of cuts now, and look to revenues when the Bush tax cuts come to an end.
Insofar that progessives should be worried, it’s because of Obama’s steadfast opposition to a middle-class tax hike. The progressive agenda is unsustainable without a return to Clinton-era tax rates; anything less requires cuts to the social safety net. Republicans understand this, hence their frantic effort to lock tax rates in at the Bush level or lower. Progressives have zeroed in on Obama’s poor negotiating as evidence of his betrayal, but if they’re really concerned with the viability of the progressive project, they’ll turn their attention to that dangerous campaign pledge.