A Republican offer to allow a top rate increase in exchange for entitlement cuts would turn the spotlight on the Democrats’ entitlement dilemma. If President Obama takes the position of many in his party — AFL-CIO chief Richard Trumka, for example, has written, “NO to cuts to Social Security, Medicare and Medicaid and YES to fair taxes on the wealthiest 2 percent”– there will be no deal. But that would not stop the Republicans from saying right now: While we do not support raising taxes on anyone, especially in this weak economy, we will accept the president’s top-bracket rate increase in exchange for trillion-dollar cuts in the big three entitlement programs.
Doing that would forestall the Democratic attack that the GOP will not bend on tax rates. Instead, it would be the president who’s not bending. Of course, Obama — and many in the media — would find other grounds to attack Republicans. But since the GOP is ultimately going to relent on the top tax rate, why not do it when it has some benefit?
During the campaign, Obama made brief and vague references to cutting spending. “I’ve signed a trillion dollars’ worth of spending cuts,” he said at a Nov. 1 rally in Green Bay, Wis. “I intend to do more.” (The $1 trillion was a reference to the sequestration cuts agreed to by both parties that Obama has now said won’t happen.)
Obama has never specified what “do more” means. In a question-and-answer session Monday on Twitter, the president was asked, “Why not place more emphasis on reducing government spending than on raising revenues?”