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Boehner Proposes Conditional Tax Hike On High Earners, Obama Refuses

Tyler Durden's picture




 

The Fiscal Cliff cat and mouse game is entering its last two weeks of calendar 2012, with Congress now officially closed for the year. And while we would have expected major updates in the Cliff timeline to only hit during trading hours, usually just as AAPL once again threatens to trade with a 4-handle, Reuters reports that out of the blue Boehner, who last we checked is back in Ohio, has made a radical departure with the Norquist pledge status quo, and has offered to raise tax rates on high earners to break the "fiscal cliff" deadlock in exchange for major cuts in entitlement programs, "but President Barack Obama is not ready to accept, a source said late Saturday."

Which brings us back to political square zero, because at the end of the day none of this is about a fiscally sustainable America, and certainly won't be until one day the shadow banking mechanism, whereby PDs can extract par cash from custodians for TSYs just issued and purchased and immediately re-pledged, and use said cash to recycle TSYs as effectively infinite collateral, and where more issuance means more demand (which creates a Giffen good perpetual engine which of course works, until suddenly out of the blue, for whatever reason sentiment shifts rapidly and violently, and it no longer does), fails and yields spiral out of control.

In the meantime, both political parties will trundle along pretending a tax hike which covers about a month (max) of government spending is even remotely relevant.

More from Reuters:

While the White House considers Boehner's offer "progress," the source said more remained to be worked out between the two.

 

Tax rates are a major sticking point in negotiations to avert steep automatic tax hikes and budget cuts set for the end of the year if a deal isn't reached. Republicans have resisted Obama's demand to extend lower tax rates for everyone except top earners, preferring to extend them for all taxpayers.

 

The Boehner offer was the first departure from the position the House speaker has held for months.

The question now is whether the GOP can now spin the president's
negative response to the proposed "compromise" - and it will certainly try - to portray Obama,
instead of themselves, as the entity that wants to push the US over the
cliff in exchange for political brownie points. Because now Boehner will have all the leverage to tell any splinter GOP group in either the Congress or the Senate, that he made a good will offer, and it was the president who refused.

As for the actual cliff, we repeat what we said back on November 13: "once again, it will be up to the market, just like last August, just like October of 2008, to implode and to shock Congress into awakening and coming up with a compromise of sorts. Only this time, now that Bernanke has shown he will "get to work" at a moment's notice, the impetus to do anything as a result of even a market plunge will be far less. After all why lose face, and put your career in jeopardy when there is the Fed which, supposedly, can offset a market crash, courtesy of the shining example set by Chuck Schumer."

Nothing has changed since then.

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Sun, 12/16/2012 - 12:07 | 3068581 VisualCSharp
VisualCSharp's picture

Digressions, ahoy!

Sun, 12/16/2012 - 18:18 | 3069351 GMadScientist
GMadScientist's picture

Those with access to the discount window can front-run the Fed for a seemingly infinite duration, but this duration will turn out to be rather finite after all.

 

Sun, 12/16/2012 - 09:38 | 3068368 Dangertime
Dangertime's picture

It's all about keeping the "frame".

Boehner's line in the sand should be the Debt Ceiling.  Raise the taxes as Obama wants, but then refuse to raise the debt celing.  The economy will still implode and then the Democrats can be blamed.

 

If Obama refuses that deal, then Boehner must continually speak about how it is more important to Obama to put the country further into debt than it is to provide tax breaks to the middle class.  And then Obama has no choice but to cave.

 

Sun, 12/16/2012 - 18:19 | 3069356 GMadScientist
GMadScientist's picture

You think Boner can still win; that's fucking adorable.

Sun, 12/16/2012 - 11:11 | 3068475 Freedomtosayno
Freedomtosayno's picture

He is the (Establishment) Party!

Sat, 12/15/2012 - 23:28 | 3067845 Insideher Trading
Insideher Trading's picture

I am eager and willing to pay for the birth control, food stamps, and housing of others.

I am patriot. You should be too citizen.

Sat, 12/15/2012 - 23:32 | 3067865 jeff montanye
jeff montanye's picture

i am not entirely sure about the food and housing, but i am utterly, totally, completely ready to pay my share of the costs for all the birth control and abortions anyone wants, anywhere in the world. biggest bang for the buck there is, in so many ways.

Sun, 12/16/2012 - 00:07 | 3067924 Insideher Trading
Insideher Trading's picture

Are you on board with paying for the treatment of venereal diseases?

Nevermind, you're now responsible for all of the above anyway.

Sun, 12/16/2012 - 00:18 | 3067938 zhandax
zhandax's picture

.

Sun, 12/16/2012 - 03:37 | 3068222 blunderdog
blunderdog's picture

I'm really not so excited that I'll soon be paying more to a bunch of richer folks than me so they can continue being old. 

I'm sure they all deserve it, they paid for the older folks when they were younger, too, but they're going to be bitching about ME if I end up on foodstamps, so it seems fair enough.

Sun, 12/16/2012 - 18:23 | 3069367 GMadScientist
GMadScientist's picture

No, you're a pre-existing condition.

Sun, 12/16/2012 - 00:27 | 3067952 brettd
brettd's picture

Ah, the beauty and joy of eugenics.

 

Sun, 12/16/2012 - 10:08 | 3068398 nmewn
nmewn's picture

They step in without giving it a second thought...until the door slams behind them.

Then it's wait a minute, I only agreed to someone else having to die. The guard looking through the portal say's yes, you are the someone else.

(Click, fade to black)

Sun, 12/16/2012 - 18:25 | 3069374 GMadScientist
GMadScientist's picture

(fade in on accountant at health insurance company desk)

And that's our 10k, sir, and here's the high-level one for you and the board with the profits outlined as requested.

It's been a really good year!

Sun, 12/16/2012 - 01:43 | 3068111 hawk nation
hawk nation's picture

wouldn't it be cheaper to wait untill after the baby is born and then put a bullet in its head. You would get more bang for the buck that way

Sun, 12/16/2012 - 12:07 | 3068579 Bollixed
Bollixed's picture

Ah, the children. What about the children...Let's do the right thing for the children. It's all about the children...

But god help that little bastard if he smokes a joint at thirteen...

Sat, 12/15/2012 - 23:26 | 3067850 lolmao500
lolmao500's picture

IMPEACH BOEHNER already.

Boehner is a hack. Obama is a hack.

The deficit needs to get to 0 or at least be reduced to 300-400 billion TODAY with BY LAW deficit 0 in 2014. Anything else is BS.

Sat, 12/15/2012 - 23:56 | 3067908 Matt
Matt's picture

Somehow, I doubt being a hack is an impeachable offense.

Sun, 12/16/2012 - 01:34 | 3068092 lolmao500
lolmao500's picture

Well the other shills in congress can vote against the fucker in the next congress session when they choose the speaker.

Sun, 12/16/2012 - 02:10 | 3068147 JLee2027
JLee2027's picture

While I totally agree the budget deficit should be zero, INTRADE estimates a 70% chance of Washington DC being burned to the ground by angry entitlers if that happens.

Sun, 12/16/2012 - 10:41 | 3068435 centerline
centerline's picture

Along with most other major cities.

Sun, 12/16/2012 - 12:08 | 3068569 LawsofPhysics
LawsofPhysics's picture

Yes, the Military Industrialists do feel very entitled to your wallet and they do have the capabilities to burn many cities to the ground in a flash.  So yes, you are correct, they will be very upset if they don't keep their trillion dollar budgets.  Poor folks won't do shit, aside from starve and die. 

The laws of Nature and physics really don't give a shit either way but all economies are local and most locals know who the truly evil fuckers are, so be very careful what you wish for.

Sun, 12/16/2012 - 11:49 | 3068540 azusgm
azusgm's picture

Being a hack might be an impeachable offense under "high crimes and misdemeanors".

http://constitution.org/cmt/high_crimes.htm

Worth a try.

Sun, 12/16/2012 - 15:47 | 3069030 MiltonFriedmans...
MiltonFriedmansNightmare's picture

I don't think any offense is considered impeachable in this world of ours with ethics on par with those of Gotham City.

Sun, 12/16/2012 - 03:52 | 3068233 CrashisOptimistic
CrashisOptimistic's picture

 

CNBC's version of resolution of the fiscal cliff would be something like this:

No tax increases.  No spending cuts,  And maybe another 100 billion in stimulus spending, borrowed from Ben.

That's "resolution".

They truly still have not figured out that ANYTHING done, any compromise that reduces the impact of what is coming, will be a reduction of destimulus, leaving at least some destimulus on a GDP that will probably log in for Q4 about 1%.  The only thing being discussed is how to reduce the contractive effect.  There was a half hearted WH request for stimulus, but it would have been less than the high income tax increase so the package would have been destimulative.

They have not quite figured this out.  All roads lead to stimulus withdrawl.

Sat, 12/15/2012 - 23:41 | 3067859 jeff montanye
jeff montanye's picture

one must wonder at the high irony of the press for austerity in the teeth of a deflationary depression, austerity which was paid lip service if that in any but clinton's administration.  not that i am a fan of slick willie, but the surpluses are supposed to be accumulated in the times of plenty, not the times of famine (cf. bronze age princes; grain reserves). 

Sun, 12/16/2012 - 12:12 | 3068591 JR
JR's picture

The late Hans F. Sennholz, emeritus professor of economics and influential free-market economist, in late 2000 explained the Clinton Surplus Hoax:

In defense of their position and income, most politicians are ever eager to take as much money as possible from taxpayers so that they may buy the favors of the voters. They wax eloquent about the great benefits of spending but fall silent about the costs and consequences of taxation. Most of them may even engage in the art of fiscal legerdemain which turns a tax into a benefit and a deficit into a surplus. The budget surpluses of the Clinton Administration are current examples of such deception.

A budget reflects a president's aspirations and hopes, his wishful thinking as well as his philosophy of politics. It's a mixture of financial planning and political campaigning in which fiscal legerdemain knows no limitations of party or time. The federal budget surpluses since 1998 are no exception to the rule. They obscure significant federal expenditures through bookkeeping gimmickry, such as borrowing new money to pay off old loans and calling it "debt reduction."

Imagine a corporation suffering losses and being deep in debt. In order to boost its stock prices and the bonuses of its officers, the corporation quietly borrows funds in the bond market and uses them not only to cover its losses but also to retire some corporate stock and thereby bid up its price. And imagine the management boasting of profits and surpluses. But that's what the Clinton Administration has been doing with alacrity and brazenness. It suffers sizeable budget deficits, increasing the national debt by hundreds of billions of dollars, but uses trust funds to meet expenditures and then boasts of surpluses which excites the spending predilection of politicians in both parties. …

The surplus deception is clearly discernible in the statistics of national debt. While the spenders are boasting about surpluses, the national debt is rising year after year. In 1998, the first year of the legerdemain surplus, it rose from $5.413 trillion to $5.526 trillion, due to a deficit of $112.9 billion. Since then it has risen to $5.643 trillion today, October 15, 2000, with another deficit of $117 billion.

The federal government spends Social Security money and other trust funds which constitute obligations to present and future recipients. It consumes them and thereby incurs obligations as binding as those to the owners of savings bonds. Yet, the Treasury treats them as revenue and hails them for generating surpluses. If a private banker were to treat trust fund deposits as income and profit, he would face criminal charges.

In the coming years, the trust fund surpluses are estimated to grow significantly, inviting ever more fiscal legerdemain….

http://mises.org/daily/542

Sat, 12/15/2012 - 23:35 | 3067871 A Lunatic
A Lunatic's picture

I want a divorce.

Sun, 12/16/2012 - 06:01 | 3068290 vato poco
vato poco's picture

Oh, sure, you say you 'want a divorce'. Fuck, the whole damn country said they wanted divorces before the election. Congressional approval ratings were hovering around 10% or so - an all-time low, indicative of the enormous contempt the country felt for congress and the senate. Then along came election day.

Turns out it was all bullshit: the 2012 incumbent re-election % was.....drum roll please.....90 fucking per cent. (and that was actually *down* from the historical norm of 95% or so) If y'all ever wondered why they laugh at us; why they take less and less bother every year to disguise the fact they're shitting all over us _and having a wonderful time doing it_.....you might wanna consider that stat.

Sun, 12/16/2012 - 09:23 | 3068357 azusgm
azusgm's picture

If you aren't loving things the way they are, get involved on the local level and raise up some candidates that you do want in office. Get on the phone, attend city council and political meetings, and go eyeball to eyeball with other people. Eventually, you have to put your shoes on and go sit on an uncomfortable chair and listen up then speak up. You have to interact face to face.

Sun, 12/16/2012 - 11:20 | 3068492 WillyGroper
WillyGroper's picture

ALEC

Sun, 12/16/2012 - 11:51 | 3068542 azusgm
azusgm's picture

No, not ALEC. Just a person who is waking up and seeing work to be done.

Sun, 12/16/2012 - 12:32 | 3068643 A Lunatic
A Lunatic's picture

My local level is all good, it's the mother fuckers at the top that are destroying the country.........

Sun, 12/16/2012 - 11:33 | 3068512 jerry_theking_lawler
jerry_theking_lawler's picture

this is strictly because people understand and are embracing the true meaning of Republic.....they 'like' they congress-critters, just not the congress-critters of other states, therefore low approval rating of congress.

deep down, people crave the true republic....it is TPTB that are forcing us together on all ideals via the Federal system.

Sun, 12/16/2012 - 15:52 | 3069040 MiltonFriedmans...
MiltonFriedmansNightmare's picture

That's deep thinking, Vato. The human mind is quite the paradox.

Sun, 12/16/2012 - 18:17 | 3069348 bugfixx
bugfixx's picture

The majority of American voters like things just the way they are. They do NOT supporting cutting federal spending (even spending where the federal gov't has no constitutional role) and the only tax increases they favor are the ones that someone else has to pay (i.e, "the rich"). We are all drinking each other's bathwater on this site if we think that the majority supports living within our means.

http://www.ritholtz.com/blog/2012/12/american-people-are-against-reducin...

Sat, 12/15/2012 - 23:36 | 3067874 lolmao500
lolmao500's picture

In other news, the sickos are at it again :

http://www.examiner.com/article/connecticut-school-shooting-westboro-bap...

Connecticut school shooting: Westboro Baptist Church planning to picket

Less than 48 hours after the Connecticut school shooting at the Sandy Hook Elementary School in Newtown, CT, which took place on Dec. 14, the Westboro Baptist Church is already making plans to picket. The Westboro Baptist Church is known for picketing and protesting at funerals across the country.

Westboro will picket Sandy Hook Elementary School to sing praise to God for the glory of his work in executing his judgment,Shirley Phelps-Roper tweeted on Dec. 15.

Can a bunch of them get shot already??

Sat, 12/15/2012 - 23:39 | 3067878 A Lunatic
A Lunatic's picture

Un.. fucking.. believable......

Sat, 12/15/2012 - 23:47 | 3067888 Freddie
Freddie's picture

Are they really a Baptist church?  I think they are liberal activist pretending to be a church to make churches look bad.  They a one way ticket to the resurrection.

Sun, 12/16/2012 - 00:01 | 3067915 lolmao500
lolmao500's picture

Or they are a gov operation to put restrictions on freedom of speech.

Sun, 12/16/2012 - 01:15 | 3068052 Renewable Life
Renewable Life's picture

Are you that fucking dilusional about religion or just completely ignorant, that you think these fucking wackos are a "liberal group" posing as a church!!!!

I'll bet you think the Taliban is a liberal group posing as a religion too, right? The fucking nazis considered themselves Nationalist Socialist Christians, and the extermination of the Jews, was a religious policy of christian reconciliation for the murder of Jesus Christ! Read your fucking history on the Catholic Church in WWII before you get you prayer beads out tonight! And the Protestants.........American slavery and the mass murder of millions of Native Americans and Africans was justified with the use of the King James Bible. How about the Irish and English tiff, 100% religious murder for ohhhhh about 1000 years! The Crusades, the inquisitions, the colonization of Africa, China, India, and America all done by "missionaries", 9-11, Bin Laden, I could go for fucking days!

These fucking wackos can't be anything BUT religious, to be doing what they are doing!!! Congratulations, you just said the single stupidist fucking thing I've read on ZH!

Sun, 12/16/2012 - 03:39 | 3068224 blunderdog
blunderdog's picture

You let Freddie get to you?  Come on, man.  Chin up.  He's a PERL script.

Sun, 12/16/2012 - 12:47 | 3068678 JR
JR's picture

There’s not a drop of religion in this picketing of funerals.  And their purpose is clear: it brought you out of your shell to blast a sincere, sacred belief of the centuries. Their protest brought out that endless diatribe focusing on and against Christianity, the founding principle of man’s escape from bondage and tyranny, not to mention the establishment of the most free, most important Western nation -- the United States.

It is not impossible to imagine this protest group to be a part of the campaign against morality and Christianity since their actions, carried in the media, certainly add to the Left’s agenda as outlined by Karl Marx and Frederick Engels:

  1. Abolition of property in land and application of all rents of land to public purposes.
  2. A heavy progressive or graduated income tax.
  3. Abolition of all right of inheritance.
  4. Confiscation of the property of all emigrants and rebels.
  5. Centralisation of credit in the hands of the State, by means of a national bank with State capital and an exclusive monopoly.
  6. Centralisation of the means of communication and transport in the hands of the State.
  7. Extension of factories and instruments of production owned by the State; the bringing into cultivation of waste-lands, and the improvement of the soil generally in accordance with a common plan.
  8. Equal liability of all to labour. Establishment of industrial armies, especially for agriculture.
  9. Combination of agriculture with manufacturing industries; gradual abolition of the distinction between town and country, by a more equitable distribution of the population over the country.
  10. Free education for all children in public schools. Abolition of children's factory labour in its present form and combination of education with industrial production.

That is America’s fiscal cliff, now being negotiated in Washington DC in conjunction with the banker-controlled media.

Sat, 12/15/2012 - 23:59 | 3067914 Mr. Magoo
Mr. Magoo's picture

Dont worry, they will be first in line on the railcar for FEMA region 7

Sun, 12/16/2012 - 02:16 | 3068156 freedogger
freedogger's picture

Westboro - as evil as the fucker that pulled the trigger.

Sun, 12/16/2012 - 02:27 | 3068166 MyBrothersKeeper
MyBrothersKeeper's picture

If it was my kid and they showed up, they would regret doing so

Sat, 12/15/2012 - 23:37 | 3067875 tradewithdave
tradewithdave's picture

Do you think Bill Gates Dad is angry because he's cut out of his son's Last Will and Testament or something?  If you think he's upset, imagine the kids trying to get by on $4 m. 

 

http://tradewithdave.com/?p=14211

 

 

Sat, 12/15/2012 - 23:39 | 3067877 NoDebt
NoDebt's picture

You could always express your dissatisfaction on a T-shirt.

Have you notices all the T-shirt advertisement on this site?  What's up with that?  Every damned ad on the sidebars is for a T-shirt company (all the ads look suspiciously similar despite the different company names, too).  Not that I don't appreciate the big-breasted hotties in the ads, but I'm starting to wonder if ZH isn't just a clever front for somebody's budding T-shirt empire.

I'm starting to think seriously about buying one of those "I pooped today!" T-shirts.  Might be the only thing I can point to on a daily basis and honestly say "I built that."

 

Sat, 12/15/2012 - 23:48 | 3067889 jeff montanye
jeff montanye's picture

personally the big breasts are as nothing compared to the little spot of daylight north of the place where the short shorts or thighs touch each other.  what is the word for that tiny glimpse of paradise?

love that you built it.  you, archer daniels midland and the u.s. department of agriculture.

gave you an up arrow.

Sun, 12/16/2012 - 12:15 | 3068597 VisualCSharp
VisualCSharp's picture

The gap. :)

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