Sunday December 2, 2012

LENOX

It's as if the election never happened. We're back in full-throttle campaign mode, much to the disgust of voters who thought President Obama's decisive victory on Nov. 6 might stifle the acrimony on Capitol Hill.

The fusillade of criticism directed at U.N. Ambassador Susan Rice over the misleading "talking points" handed to her by the intelligence agencies about the terrorist attack on the U.S. consulate in Benghazi is poisoning the atmosphere because of politically motivated attacks. Rice is a dedicated loyalist, part of Obama's innermost circle, so her willingness to go on TV to make the administration's case by staying on script is understandable. Her reputation took another hit on Friday with the disclosure that she has invested hundreds of thousands of dollars into several energy companies that do business with Iran.

It can be argued that Mr. Obama would be better off nominating the eminently qualified Sen. John Kerry for secretary of state; he would be a worthy successor to the formidable Hillary Clinton. The downside: Democrats could lose a Massachusetts Senate seat to the likely comeback bid of Scott Brown.

But the conciliatory move could help set the table for a resolution of the austerity crisis -- aka the fiscal cliff -- because the logjam over an agreement threatens a worst-case outcome on Dec. 31.

For Republicans, the president's latest proposal is dead on arrival.


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The opening bid from the White House calls for $1.6 trillion in new tax revenue, including a modest increase in tax rates for the wealthy. It includes an extension of benefits that would otherwise expire for the long-term unemployed, keeps the 2 percent payroll-tax cut in place, and proposes spending $50 billion on badly needed highway and bridge projects next year. Mr. Obama is also seeking new authority to raise the federal debt limit on his own, without going to Congress on bended knee every year.

But there's no evidence of any Republican counteroffer on the table.

Saddled up to ride the campaign trail for public support, Mr. Obama visited a Pennsylvania toy company on Friday to press his case for ending the Bush-era tax cuts on income over $250,000. His proposal includes a one-year delay in planned spending cuts for defense and domestic programs, plus $400 billion in savings over 10 years from Medicare and other safety-net programs.

It also spares doctors from a 30 percent cut in payment for Medicare patients and frees middle-income taxpayers from the dreaded AMT -- Alternative Minimum Tax -- that could hit up to 73 million people with higher bills.

The Democrats' proposal could be sweetened by increasing the eligibility age for Medicare by one month per year, making it 66 in 2025. More revenue would flow in by eliminating the cap on payroll taxes that fund Medicare and Social Security. It makes no sense, given current realities, that income over $113,700 a year is exempt from those taxes.

Studies show federal, state, local, sales and property taxes added up to a lower percentage for most Americans than during the Reagan era three decades ago. Asking the upper 2 percent to pay slightly more -- a fair share -- is eminently reasonable, except to Republicans who cry foul over the supposed impact on "small business" and "job creators."

There's still time for compromise. But Democrats should avoid the notion of a "victory lap" and Republicans need to come to grips with the mood of a majority of the voters.

Rather than holding Americans hostage to Capitol Hill squabbling, leaders in Congress must remain in session, around the clock if the deadline approaches without a deal, right through the holidays. And President Obama should invite Boehner and other Republican leaders to the White House as often as it takes to work out a solution that may be less than ideal for either side, but will protect the nation from the ravages of a new recession just when the economy seems poised to sprout those proverbial "green shoots" of recovery.

To contact Clarence Fanto, email cfanto@yahoo.com.