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The high price of Republican hostage-taking

The following article by Kelly Ross is cross-posted from AFL-CIO Now, with the author’s permission:

Just a few days after the election, House Speaker John Boehner made clear that Republicans plan to hold the economy hostage once again to their ransom demands for the richest 2%.

At a White House meeting on Nov. 16, President Obama asked Boehner to increase the nation’s borrowing capability — called the “debt ceiling” — before the end of the year. This was a perfectly reasonable request, since even the extremist House Republican budget would require the government to borrow more money.  Nevertheless, Boehner reportedly told the president that “there is a price for everything” and the debt ceiling is “my leverage.”

Let’s be clear about what this means. Why does Boehner think the debt ceiling gives him leverage? Because refusing to play ball could harm the economy and cause a “double dip” recession. The threat to tank the economy is the Republicans’ “leverage.” The economy is their hostage. And President Obama should stand up to them.

And what is the “price” Republicans are demanding to spare the economy? It’s no secret they want to cut Social Security, Medicare and Medicaid. And they’ve been very clear that they want to keep tax rates for the richest 2% from going up at the end of this year.

The Republican position boils down to this: Either you lower tax rates for the wealthiest people and cut social insurance benefits, or else something bad might happen to the economy. “You wouldn’t want anything bad to happen to the economy, now would you?” How lovely.

This is not the only “leverage” Republicans think they have. They also think they can force Democrats to extend tax cuts for the richest 2% by refusing to extend tax cuts for the middle class. Following through on this threat would also harm the economy.

In fact, the budget standoff at the end of this year boils down to Republicans holding the economy hostage to their ransom demands. Republicans could easily turn off the so-called “Fiscal Cliff” and avoid any harm to the economy. They could agree to cancel all the across-the-board budget cuts scheduled for January — without any offsets. They could agree to extend the unemployment benefit program for another year, which would save 400,000 jobs. They could pass President Obama’s American Jobs Act, which would create nearly 2 million jobs. And they could replace the expiring payroll tax cut with a refundable income tax credit. But doing all these things would take away their negotiating “leverage” to demand tax cuts for the wealthy and benefit cuts for Social Security, Medicare and Medicaid.

Republicans say that cutting benefits for Social Security, Medicare and Medicaid is necessary to reduce the deficit. But it’s hard to take the Republicans’ deficit concerns seriously when their ransom demands include tax cuts for the richest Americans, lower tax rates for corporations and more tax breaks for sending jobs overseas. All these things squander money that could be used to reduce the deficit or put America back to work. If Republicans were serious about reducing the deficit, they would not be insisting on incredibly wasteful tax cuts that don’t work for people who don’t need them.

There is a flaw in the Republican strategy of hostage-taking: Unlike last year, Democrats now have all the leverage. Why is that? Because the elections gave them a mandate to oppose benefit cuts and tax cuts for the rich; the public will blame Republicans if their obstructionism causes a recession; the middle class will blame Republicans if hostage-taking makes their taxes go up; and Republicans have just as much incentive as Democrats to cancel across the board budget cuts. It’s time someone stood up to the hostage takers.

Working families are telling Congress no more tax breaks for the wealthiest 2% and no benefit cuts to Social Security, Medicare and Medicaid. Learn more at

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