House speaker John Boehner made an incremental move in Obama's direction in regards to tax hikes.

Specifically, Boehner offered to raise income tax rates on households earning more than $1 million a year in exchange for containing the cost of federal entitlement programs.

Discussion are private, and president Obama rejected the offer. Specifically, the president wants hikes on those making more than $250,000. Obama also wants to avoid making significant reductions in entitlement programs such as Social Security and Medicare.

Blame Game Posturing

On the surface, this appears to be a major change in attitude by Boehner. Previously, Boehner wanted to avoid all tax hikes, instead offering the closing of loopholes to raise revenue.

Is this move a sign of capitulation or blame game posturing?

I suggest the latter. Public opinion polls show a majority of people behind some tax hikes on the wealthy. Boehner now has an offer on the table.

There may be one more move in Obama's direction to something like tax hikes on those making $500,000 or more. However, each move Boehner makes in the president's direction will likely require (and should require), a move by Obama in Boehner's direction.

It would be easy enough for Boehner to demand so much reduction in entitlement programs that the president will not go along.

Indeed, if  Boehner makes incremental steps from no tax hikes to tax hikes on $1,000,000 or more, to tax hikes on $750,000 or more to tax hikes on $500,000 or more ... then if Obama rejects the offer, Republicans can rightfully pin this on the president.

That is the game in play at the moment. If Boehner plays the game properly, Republicans can either get a reasonable deal, or avoid the blame if the whole thing collapses.

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Mike Shedlock

Mike Shedlock

Mike Shedlock is a registered investment advisor representative for Sitka Pacific Capital Management.

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18 Comments So Far
chicaree Wrote: Dec 17, 2012 12:13 PM
Whichever party cuts medicare and or social security will be no longer be a viable party. There are too many people who depend on those two programs. The poverty rate in American would grow substantially if those are cut. Are Republicans so out of touch you don't realize that?
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Joseph1790 Wrote: Dec 17, 2012 2:35 PM
Then more needs to be paid in to the programs to make them sustainable, do you think that is a winning platform?
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Snarkasterous1 Wrote: Dec 17, 2012 2:46 PM
Ah, liberals. Either too ignorant of the facts or too ideologically blinded to draw reasonable conclusions from those facts.

Although likely a waste of time, here goes:

1) Medicare, Medicaid, and Social Security WILL be changed ("cut," if you prefer). The costs of these programs as currently consituted are unsustainable. This is not an opinion, or a matter for debate. It's simply true.

2) Changing these programs in a way that makes Americans more responsible for their own financial outcomes will NOT automatically "increase the poverty rate." Like most liberals, you simplistically assume that human behavior is not shaped by environment. If failure to work, and to save led to certain starvation starting tomorrow, do you...
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Snarkasterous1 Wrote: Dec 17, 2012 2:49 PM
...assume that none now on the dole, or living beyond their means, would behave differently? Did you somehow miss the MILLIONS who, when welfare reform was pushed through by republicans ~ 15 years ago, somehow, miraculously, suddenly found it within their abilities to WORK, and to support themselves?

This childish, simplistic libbie thought process is the identical one that advocates punitive tax rates on the productive, assuming that an individual from whom the gov't takes over half of every incremental dollar earned will work just as hard as an individual from whom the government takes far less.

Um, sure. Just LOOK at the brilliant successes of socialism the world over. TENS of MILLIONS starved to death in China, the USSR....
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Snarkasterous1 Wrote: Dec 17, 2012 2:50 PM
...North Korea.

Yep, you libbies are certainly more "in touch" than are conservatives, who actually live in the real world, and are capable of observing, understanding, and synthesizing the lessons of that real world.

Sad to be an ignorant libbie. But, on the other hand, it does enable the ignorant to "feel good" about themselves!

- Snark
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big jack II Wrote: Dec 17, 2012 11:01 AM
Can anyone say " cave ".
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Rondoman Wrote: Dec 17, 2012 10:37 AM
Boehner always seems to speak with forked tongue. He has become just like the vast majority of politicians; he cannot give a straight answer. Most politicians would be in contempt of court for not answering a direct question requiring a simple "yes" or "no" answer. When the answer is prefaced by the usual, "Let me first say this," you know that you are about to get a run-around. Neil Cavuto really gets ticked off by this, and rightfully should.
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Black and White Brian Wrote: Dec 17, 2012 10:33 AM
When Boehner plays his game, Republicans will get the shaft -- AND blamed when the whole thing collapses.

Reality is, the legions of lying, looting, thieving, mass-murdering, co-serial-raping really thick-as-two-planks pigs like Missus Cli'ton that comprise Zero"s
"administration," the systemically-corrupt activist-"Democrat" bureaucracy and the beyond-biased/corrupt slavering-lickspittle Fascist (formerly "mainstream") Media will all so ravage Republicans during these next four years that if a single House Republican wants to survive even 2014 with even a tiny shred of retained dignity?

He should tell Zero to go ^%#* himself -- and go home for Christmas!

And so should the speaker, Boehner.
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M1946W Wrote: Dec 17, 2012 10:28 AM
Obama does not want a deal so any negotiating is simply theater. Evidence as soon as Boehner started to cave on higher taxes Obama immediately added executive control of the debt ceiling. So long as Obama and the Democrats control the narrative through a compliant, fawning media they'll be able to lay the blame on a hapless GOP that's leaderless and in disarray. The goal, of course, is to create as much pain as possible. Hit an already strapped middle class with huge tax increases, cause real unemployment to spike sharply upward and the markets downward. And into this void steps the despot Obama promising to right the wrongs, etc. etc. It's an old script for a corrupt democracy to be turned into a brutal dictatorship.
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TNLady Wrote: Dec 17, 2012 10:18 AM
No matter what, it's either 0bama's way or the highway
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johnm h Wrote: Dec 17, 2012 9:38 AM
His graph shows the Yen getting stronger, not weaker.
Boehner is negotiating with himself and losing.
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FletchforFreedom Wrote: Dec 17, 2012 9:18 AM
I would very much like to believe that you are correct ... but I have to say I doubt it.
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Sam3469 Wrote: Dec 17, 2012 9:10 AM
Mike, I wish it were true, but I don’t think there is any way that the Republicans can avoid blame. In your scenario rather than Obama getting the blame for not cutting spending, the media/liberals will just say the Republicans wouldn’t increase taxes enough…they were protecting the rich don’t ya know. The only way the Republicans can avoid blame is to walk away and let the democrats have their wish, let them try to outbid each other for more government and be sure they get the blame when the whole thing comes down. Even if there is a deal, it likely there will be a recession anyway, and Republicans will still get the blame, the media will make sure of that...Republicans need abstain from the deal.
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DON THE BRITTON Wrote: Dec 17, 2012 9:04 AM
Boehner is an idiot to make offers without anything in writing from Obama. He is trying to hit a moving target with no way to win. He should submit a GOP bill and leave Obama to negotiate with himself. There is no way that the GOP can avoid being blamed for everything, so man up and do the right thing. Cut spending now by any means possible, there is waste in every program so everything should be on the table.
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Floyd35 Wrote: Dec 17, 2012 9:02 AM
You are right they have lost all reasoning. They will probably not even insist on changing voting rights so that if you don't pay your fair share of the taxes you don't get to vote. They could force BHO and company to add that to the bill. Then paying those extra taxes won't be quite as bad knowing those who don't pay don't vote and control those who do pay their fair share.
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-42 Wrote: Dec 17, 2012 7:53 AM
Need any more proof the conservative hating Republican Party is DEAD of suicide?? They have permanently alienated this Tea Party consevative. I'm lloking for a conservative third party with some back bone & FIGHT. I'm sick of a Republican Party that stands for nothing worth fighting for other than attacking conservatives. THe only thing Republicans are great at is rolling over & playing dead when ever a Marxist Democrat whines.
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upwithRomney Wrote: Dec 17, 2012 9:21 PM
It is not only that they do not stand for anything. The reality is that the media and lobby and office holder and pundit industry uses us, collects money from us, buys advertising paying their pals and doesnt give a fig wheather they actually have any conservative values.
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Dave M Wrote: Dec 17, 2012 1:21 AM
Wishful thinking Mike.
Boehner never stood his ground when he was in an infinitely stronger position, Why would he now?
Obama never compromised when he was in an infinitely weaker position . Why would he now?
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