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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Matt's picture

The ads are based on your browsing history.

yabyum's picture

Every post surgical nurse in the world should be given that shirt on a comp.

savagegoose's picture

u think you have it bad all i get is tranny  dating services. i gotta stop my dad using my PC.

tradewithdave's picture

You didn't build that.  Archer Daniels Midland, Cargill and Monsanto built that (using Koch Brothers Haber Bosch nitrogen of course).  Obviously you're not watching enough of the Sunday morning talk show commercials. 

You can sign the "please tax me bro" pledge with Warren Buffett, George Soros and a guy who is a cat owner if you click on the link.  I'm pretty sure you get a t-shirt that says "One billionaire's self-made myth is another mom's worst nightmare" with a picture of a screaming one year old baby trying to break out of a crib.

tradewithdave's picture

I think some of the t-shirt designs are a bit too subtle.  There's another t-shirt that is about balancing the budget.  It shows Erskine Bowles holding a taser pointed at octogenarian Alan Simpson.  It says "Please taze me bro". How to privatize social security and beat austerity with a doctor's note

Do you think people really get that?  It's a little esoteric, but maybe not for the ZHers.  It's under the "Cliff T-Shirts" category. 

Yen Cross's picture

 Yellow Boy , got a new liver! The ghost of Larry Hagman is calling /

  Both Houses of legislation are so full of bile, it makes me sick!

Old Poor Richard's picture

Boehner's a traitor willing to cave on taxes--proposing $800 billion in new tax revenue first, and now also proposing explicit tax hikes.  And he's a hater on the needy, trying to cut entitlements.  NOBODY needs this SOB.  We need to freeze the debt ceiling, yet SOB Boehner has purged conservative Republicans who voted against raising the ceiling last time.

Shut it all down!

Here's my plan: Turn over responsibility for all non-discretionary spending (handouts) to the states.  Require a surplus federal budget and cap revenue, thereby capping spending.  Once the national debt is paid off, cut revenue further and require a balanced budget.




Atomizer's picture

You need to keep your lips sealed. You have proven to be the cat that shits inside it's own mouth. How can this Government attempt to carry out fraud & deceptiveness, if you keep disclosing significant spoilers?


Old Poor Richard's picture

Glass Jaw Boner is begging Obummer for the chance to take a dive, but wants to pose like he's putting up a good fight.  Obummer says fuck you, you go down hard in the first or I hold you on the ropes to just keep hurting you.

Boner's a traitor to conservatives, to America, to Republicans, to everybody. 

You can be damned sure the little bitch will try to force through gun control next, after he's raised our taxes.  House Repubs need to deny him the speaker position or we're doomed.  Gun control might be the real reason he's terminating the Tea Party, not just debt ceiling.



azusgm's picture

It's not just Boehner in the House. I think Cornyn in the Senate probably "helped" Jim DeMint resign. The RNC is the Establishment and they are conducting a purge. They control people like Cornyn and Boehner. The only way to take out the RNC is from within the Republican party. The Republican party is target-rich with puppets who can be thrown out if the true conservatives will get busy inside the party and lay some groundwork for 2014.

Ted Cruz's election proves the point.

bugfixx's picture

The majority will never vote for that. They want more free sh1t, not balanced budgets.

Yen Cross's picture

 This deal is ( stillborn) The cliff will be crossed, and I will make shitload of ( PAPER)

overmedicatedundersexed's picture

have the gop elite and bonerrrrr..bought enough puts or calls that's the only info I want, which is it PUTS OR CALLS?

ekm's picture

I read this somewhere I don't remember:


If normal people do something really really dumb openly and in public, they do it on purpose.

Yen Cross's picture

EKM I just got back into the States. You kick ass! Those endless (primary dealer) comments, aka OIS swaps comments are beautiful! :-)

ekm's picture

Can you expand more details?

I just looked up the OIS swaps and I don't see any connection.

Teach me please

Yen Cross's picture

Central Banks lend to each other at (set) rates over a pre-determined time frame.

 ECB lends 40 yards of ëuros" @ 1.30 to the fed @ 10 basis points at ( handling cost 10 basis points) after 30 days.

  The 40 yards is insulated from currency fluctuations until the expiration date. The contract is executed on the predetermined date 30 days prior/

    Bitchez This is the biggest shell game ever played!   Can we please discuss (OIS markets, and how they relate to Swaps)?

   EHM/ in laymans terms) I sell you some hay $50 a bussell/ we set a (firm price)  30 days later our contract expires/

  You can be made whole, or risk against future (input) crops. That is the Rick Santelli trade   bitchez

ekm's picture


I think the counterparties could be chinese and russian state owned banks.


Yen Cross's picture

EKM, I need a power nap. London opens in 2 hours/ Thanks man CFDs

PlausibleDenial's picture

CFD's?  Contract for differences?  If so, great estate planning tool.  It's all in the discounts.   I don't know how they are traded or even if they are newly on the screens.  However, some one on here was spamming a site not long ago.  Can anyone enlighten me???  Tnks.

Yen Cross's picture

CFDs were banned by the CFTC  in 2010/ .  CFDS are still  a standard of trade ouside of the United States, and very"contentious" with international banks.

  The U.S. $ is rapidly losing it's reserve status. I'm silently trading against the $. The dollar is toast/ I sure as hell won't be trading yuan though!

Yen Cross's picture

CFD is the term used as such , ( contract for delivery) !  Fiat and Metals trade the same scale/ Contract for Delivery.

 When you you look at markets during off hour sessions, CFDs give you a better reading than futures!

 BITCHEZ  Can I take nap now ya "Fire Brands" or should I explain that one?

lolmao500's picture

The only thing you need to cut is the corporate welfare in the medical system.

Bicycle Repairman's picture

Getting "sick care" under control is a necessary and sufficient condition.

azusgm's picture

You have to go after the FDA and the AMA. Protocols solidified into standards of care are monopolistic too.

hannah's picture

prs hussein has the repubs by the balls and he knows it. good for him. the repubs have played along with the dems for decades giving them everything because they thought it benefited them but now they are old shriveled and fucked....let the dems reign of tax terror begin....LOL...!

dolph9's picture

America is not a country.  Keep that in mind whenever you don't know what to make of the actions of the politicians.

America is an Empire carefully managed by banks and corporations for their benefit.

Now, I'm not making a judgment on that.  Please do not think this.  But at least we need to recognize the facts and then we can have a debate on what to do next.

The only recent equivalents to America that I can think of are the old Soviet Union and the current European Union.  The former wasn't a country, and collapsed, and the latter isn't a country, and is in the process of collapsing.

Hell even the United Kingdom is in the process of breaking apart.

Any guess on what happens next?

azusgm's picture

Yeah, Japan will go right after Germany.

Not time to get under the desk yet, but soon.

azusgm's picture

What country is this? Why are Harry Reid, Boohoo Boehner, and Barack Hussein Obama meeting and cutting deals? I can't find that in the Constitution. Spending bills are supposed to originate in the House of Representatives. If nothing comes out of the House (not the White House) turn out the lights until the members of congress have huddled in the dark long enough to come up with a budget. Let the senate and Obama leave on vacation, but the House stays.

Can't these idiots (mostly lawyers) read?

TrulyBelieving's picture

Yes, these idiots can read, but constitutionality is not on their menu.

MeelionDollerBogus's picture

They can read a prepared 2 minute oratory in the House but when's the last time they read a bill before passing it?

blunderdog's picture

They're trying to prevent laws they've already passed from coming into effect.  It'd be a lot funnier if we didn't pay them WAYYYY too much to do this sort of thing.  I think they're delivering decent performance for an $18,000/year salary, but really, the whole place should be staffed with interns.

bugfixx's picture

The President is supposed to sign a budget passed by Congress, though they haven't been doing that since the majority of American voters elected Barry O as King Executive Order the 1st.

Yen Cross's picture

 I made the right decisions. That 5 point gartly patern is dumb/ ( i tried it Orly)  Trade short term trend lines/  Ninja old school trading.


TrulyBelieving's picture

        Truly amazing times, a country in the flux of change. The very ones who have sworn an oath to protect Liberty and freedom that is guaranteed by the Constitution are the ones who are destroying it. The universities and colleges that instead of enlightening our youth with the truth and basic knowledge, are teaching them the foreign doctrine of Marxism and socialist ideas. The compliant media, daily reinforces the lies and lays cover for these haters of Liberty. And my fellow citizens, by far the majority could care less about it all, or worse, are actually voting for the demise of the very freedoms they naively posess.  There should be no doubt, if history is any guide, that dark times are indeed just ahead, for statism leads to tyranny and socialism leads to poverty.      FOWARD!            

bugfixx's picture

You have to stop thinking that the statists we elect remotely care about results. They only care about voter perception of those results, which is why the corporations control the establishment media.

seek's picture

Given how little the last QEn announcement impacted the markets, I think Ben (and his proxies, O and the (R) team) could get the shock of their life if the market tanks on the cliff.

If it's taking $85B/mo to stay even, and nothing moved last time, a crash could either be unrecoverable, or unleash some real numbers.

While I still think 2015-2018 is where it all falls apart, maybe the black swan is that they own so much of the market, there are no "animal spirits" left to spook in the desired direction.

q99x2's picture

Garnish their wages. Put liens on their properties. Impeach them. Arrest them.

Yen Cross's picture

Better check yer "pillGING POWER"  Play nice or ""be "Broadsided"  with cannons

bugfixx's picture

The statists in Congress and the White House will just nationalize 401k/IRA accounts and eat through everyone's savings until Barry O retires to a palatial estate in Hawaii with a private golf course.

batterycharged's picture

So is "high earners" the new "job creators" because frankly there are some wealthy people that don't fucking EARN shit.

I noticed that the talking heads are sneaking this in more and more. Even Bill Clinton couldn't say "rich people" or "the wealthy".

Atomizer's picture

Just swagger this all around town. You're bound to make new poor friends..

One World Mafia's picture

Stock reset opportunity? get a fresh batch of shorts so the squeeze trap can be replayed "since the only time shorts re-enter the market, even against their and everyone else's better judgment, is just after major market tumbles."

Yen Cross's picture

 I',m fucking tired, the Gooberment is going to FAIL, Jet Lag Bitchez/  Asia is getting ready to open/ Sheng Hai is going to sell off/

 22K are you kidding me> should be high 16s

Yen Cross's picture

Arree Ye  Mate''es

JLee2027's picture

Boehner will crack wide open, like the pretend Republican he is. Just watch. The only question is whether he has enough traitorous turncoats to pass whatever they agree to.

Lednbrass's picture

I don't understand this criticism- Boehner is exactly what the Republican party has always been. The party was founded on the concept of Central Government Uber Alles and has pursued exactly that for over 150 years.

Did you actually believe their stream of lies that they favor reduced government, self reliance, yada yada yada? I argue that a RINO isn't a Republican who advances Big Government and The State, a RINO is someone belonging to that party who actually believes in reduced federal power, spending, and the Constitution.

He isn't out of step with the Republican party- you are.

JLee2027's picture

Respectfully, I don't think you understand what the Republican party used to stand for.