Tuesday, November 13, 2012

No Worries About McConnell Going Wobbly

Senate Republican Leader Mitch McConnell gave a must-read interview to Stephen Moore from the Wall Street Journal Editorial Board over the weekend. It is blistering. Some of McConnell's tone might be attributed to a bad week, first the election and then his beloved Cards love to Syracuse. The interview is well-worth reading as the closest thing we have to a crystal ball on how the next two years will play out -- particularly for your taxes.

Some highlights, quoting McConnell:

  • "Let me put it very clearly," says the five-term Republican senator from Kentucky. "I am not willing to raise taxes to turn off the sequester. Period." 

  •  The smart way forward, Mr. McConnell says, "is pretty simple. Let's extend the current rates for another year for everyone—a bridge—and get busy working on the comprehensive tax reform that we need to do. There's bipartisan support for that."

  • "The speaker and I spent an endless amount of time in the first half of 2011 trying to get the president to do what we all know has to be done if we're going to save the country," Mr. McConnell says. "Until we adjust the entitlement programs to fit the demographics of today's America, you can't fix the problem. You can't tax your way out of it. You can't cut health-care providers as a way out of it. But Democrats laughed at those ideas even when we offered a quarter-trillion of higher revenues largely taken from high-income people."

  • The senator's top priority is long-term entitlement reform. "Changing the eligibility for entitlements is the only thing that can possibly fix the country long term." He wants means-testing for programs like Medicare. "Warren Buffett's always complaining about not paying enough in taxes," he says. "What really irritates me is I'm paying for his Medicare."

  • The other unresolved mega-issue is what to do about the scheduled sequester cuts of $110 billion for 2013, half coming from defense and half from discretionary domestic programs. Much like the president, he wants to shut it off, but with a caveat: "I don't think we should just forget about the spending reductions we promised. We ought to achieve exactly the same amount of spending reductions," with targeted cuts that the two parties have already agreed to. When pressed on whether he could live with the sequester, as some Republican budget hawks have suggested, the senator dismisses that drive-off-the-cliff option as "Thelma and Louise economics."

  • But don't Messrs. Obama and Reid think they've just been given a mandate to raise those tax rates? "Yes, well, we Republicans in the House and Senate think we have a voter mandate not to raise taxes."

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