McConnell: Obama Wins The Tax Fight — Now On To The Debt Limit

December 11, 2012 11:24 a.m.
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The top Republican in the Senate acknowledged Tuesday that President Obama has the upper hand in the debate about income tax rates on high income Americans. And he became the highest ranking GOP official to assert that Republicans will have to wait until next year, when the debt limit needs to be raised, to effectively push for cuts to social programs like Medicare, Medicaid and Social Security.

The remarks by Sen. Mitch McConnell (R-KY) suggest that Republicans have resigned themselves to the fact that income tax rates will increase over their objections next year — and that Obama and House Speaker John Boehner (R-OH) are unlikely to cut a broader deal that would include raising the debt limit before January.

“What the President’s trying to achieve on the top two tax rates, he can get by doing nothing,” McConnell told reporters at his weekly press availability. “The law is certainly stacked in his favor.”McConnell is the latest and highest ranking Republican to lament the fact that Obama has enough leverage to secure a higher marginal tax rate on top earners. But he added that if Obama’s unwilling to join the GOP and support major cuts and reforms to entitlement programs now, they’ll bring the matter up again next year.

“When are we ever going to make those kinds of decisions,” McConnell added. “We tried to get the president to do it last year. We now have another opportunity here at the end of the year to try to engage that discussion again. We’ll have another opportunity later, when the debt ceiling issue arrives.”

The suggestion is that he and Boehner will block an increase in the debt limit unless it’s paired with cuts to major social programs. Obama has said he’ll refuse to entertain that negotiating tactic, and Democrats have his back. Senate Majority Leader Harry Reid (D-NV) has made clear that his caucus stands ready to increase the debt limit — or to provide Obama the authority to do so — as soon as the GOP drops its filibuster.

I asked McConnell whether Dems’ unity on this point will leave Republicans isolated if they attempt to use U.S. creditworthiness as a bargaining chip to secure cuts to major social insurance programs.

“I think I can speak for every single Republican that we think a request of any president to raise the debt ceiling in the future should involve a discussion with whoever the president is about what we might do about the debt,” he said. “And we shouldn’t treat it like a Motherhood Resolution; that we shouldn’t airdrop it into Obamacare with no vote; that the decision to raise the debt ceiling is a perfect time to have a discussion about the debt.”

Added McConnell, “So we’ll have that discussion later, at whatever point the administration decides that they need to have that authority. But I don’t think that there’s any sentiment whatsoever for giving the President perpetual authority without congressional involvement. … I don’t care whether a majority of Senate Democrats are for that or not. I’d hate by the way to have to defend that in a campaign. But regardless of whether a majority of them are for it, that isn’t going to happen. We are going to insist that we have another discussion about the future of our country in connection with the request of us to raise the debt ceiling.”

McConnell didn’t explicitly say that the “discussion” will replicate the 2011 debt limit fight — that Republicans will refuse to raise the debt limit unless its accompanied by equal dollar spending cuts. But he’s certainly dangling the threat out there.

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