Last night House Majority Leader John Boehner withdrew his “Plan B” proposal for the budget. He had no choice: conservative Republicans in the House made it clear that would not vote for a plan that raises taxes for ANYONE—even millionaires.
Many in Washington believe this makes a bungee-jump over the “fiscal cliff” inevitable. As I have explained, that is not as scary as it sounds. The precipice is an imaginary line drawn in the sand and dated “January 1.” Any damage done if we miss the deadline can easily be reversed. Early in January Congress would, no doubt, extend tax cuts for 98% of all Americans while voting down Draconian across- the- board spending cuts scheduled to kick in the first of the year.
But today, House Minority Leader Nancy Pelosi said “there is still a chance for a deal” before year-end. In fact, Pelosi probably knows that House Democrats and Republicans have more than enough votes to extend tax cuts for the 98% now. The Senate has already passed a bill that would do just that. And in the House few Republicans are eager to stand up and vote to hike taxes for the vast majority of Americans. Conservatives just want to give the same break to the wealthiest 2%. But by now, most Republicans recognize that some tax increases are inevitable.
Pelosi’s optimism makes me hopeful. She’s a superb vote-counter, and she knows what’s happening on the other side of the aisle.
CEOs Urge Republicans to Compromise
As Bloomberg reported yesterday, corporate chieftains have begun to lobby Republicans to give way on tax increases: CEOs such as Lloyd Blankfein of Goldman Sachs Group Inc., Robert Iger of Walt Disney Co. and Randall Stephenson of AT&T Inc. have been meeting with White House officials and their “support for Obama’s tax stance has split the Republican business alliance, driving a wedge between CEOs urging compromise and the nation’s most prominent small-business group.