RUSH: Folks, I have to tell you. I am sitting here and I had so many observations, but I am stunned. I just have to tell you, I'm stunned at how, after four years, none of the conservative or Republican inside-the-Beltway establishment even now understands who they're dealing with in Barack Obama. How many of our core beliefs are we going to throw away in this misguided belief that we can finally get to what matters? There is a prevailing opinion out there that, "Well, this deal, you know, is actually a pretty good deal. It keeps taxes the same, lowers taxes." And nobody's taxes got cut. There was not a tax cut. I'm blue in the face already and we're only two minutes into this.
Anyway, so here's the deal. We have the taxes off the table. Yes. And now Obama's going to be forced to talk about spending. What? Obama's not through raising taxes on everybody, folks. Obama is saying we raised taxes, but the rich still aren't paying their fair share. They're still not paying enough. He's gonna come back for more. There aren't gonna be any spending cuts. There isn't gonna be any entitlement reform. Would somebody show me the evidence to suggest Obama can be pressured to doing anything that he doesn't want to do? I sit here in stunned disbelief. But at the same time I feel like I'm a member of the smallest minority in this country. When I listen to people and conservatives, Republicans, inside the Beltway, when I listen to 'em talk and the things that they say and the things that they think about this deal, I don't have anything in common with them anymore. It's stunning to me. It really is.
Before I unload on the whole thing, I'm curious what you all think of this. I have to figure out where we all are in this 'cause I'm telling you, things are spinning out of control in ways that, frankly, I never imagined. I still don't think people have the slightest understanding of what we're up against. And until that's understood, until it's admitted to, we're never gonna make any real, significant progress.
RUSH: Ladies and gentlemen, so much to say about this situation we find ourselves in. The first thing I want to do, I want to go back to December 6th on this program, me, and replay for you a three minute clip of me laying out what was ahead of us. And I'll just tell you up front, I called it, nailed it on the head. Here it is.
RUSH ARCHIVE: Compromise is impossible. All that can happen and all that will happen is one side will concede, and what Obama wants is a confession. When this is all said and done, Obama wants it understood that this problem was caused by George Bush; that the Republicans are responsible for the debt. The Republicans are responsible for the deficit. The Republicans are responsible for the entitlements maybe not being able to pay what their promises are, because Bush didn't take enough money from people who could afford it.
Bush instituted tax cuts twice, 2001 and 2003, that we couldn't afford. ... When or if the Republicans concede, that will be the story. The seeds have been planted. The sprouts are growing and they're soon to bloom. "Bush did it! Bush and the Republicans did this." The Founders to Bush, they did this. This country was founded improperly and unjustly and immorally and unfairly, and we've finally reached a tipping point where those guys couldn't live off their illusion. These 230 years have been a mistake, and now we're fixing it.
And at the end of all this, the Republicans will end up admitting that Obama is right. Now, Boehner's not gonna call a press conference and say any of this. That's not going to happen. He won't have to. The media will take care of this for Obama. A confession: "Republicans admit that if there had been higher taxes for the past decade, there wouldn't be a deficit, and the national debt would not have grown. The budget would have been balanced. In fact, we'd still have a surplus! We would still have the Clinton surplus, if Bush hadn't cut those taxes. Tax cuts are to blame." That will be the single lesson learned when this is over: "Tax cuts caused this," and 98% of the American people will be told that tax cuts for 2% caused this, and they will accept that. They will believe that. So that down the road, the next time... What is the Republican Party singularly known for? Cutting taxes.
So ten years from now, five years from now, a Republican is back in the White House, maybe, and proposes tax cuts. "Oh, we can't do that! Look what happened the last time we did it with Bush. Look what happened." Obama will be removed from the equation. In fact, Obama's involvement in the equation will be as the fixer. Obama will be the savior. He will be the solution. He will have identified the problem. He will have persuaded the country of the problem, and he will have beaten back the Republicans into admitting that they were the problem.
RUSH: That was just a month ago that I made this point, December 6th. Let's listen to what the president himself is saying about this. Here's the president on Tuesday night, January 1st, in Washington at the White House...
OBAMA: A central premise of my campaign for president was to change the tax code that was too skewed towards the wealthy at the expense of working, middle-class Americans. Tonight we've done that. And today's agreement enshrines, I think, a principle into law that will remain in place as long as I am president. The deficit needs to be reduced in a way that's balanced. Everyone pays their fair share. Everyone does their part. That's how our economy works best. That's how we grow.
RUSH: So he got his confession, folks. He got his confession from the Republicans, and then he declared that this agreement "enshrines the principle" that tax cuts caused the economy to falter. "A central premise of my campaign for president was to change the tax code that was too skewed towards the wealthy..." Republicans agreed. They raised taxes on the rich, except they didn't. That's the dirty little secret in all of this.
There are two kinds of rich people in this country. There are the income wealthy -- and they have just had it socked to them -- and then there are the really rich people, the asset wealthy, who didn't even get touched in this deal. Warren Buffett will still pay a smaller income tax rate than his secretary, because Warren Buffett will not see a tax increase on his assets. Nor will Jeffrey Immelt at GE. Nor will any of the people who are asset wealthy in Hollywood.
Asset wealth was untouched.
Asset wealth, in fact, had some carve-outs!
Asset wealth was left entirely alone. Hedge fund people -- big-time investors and people who've already made it and derive most of their income from the value of their assets and the income that that throws off -- were not touched. But the income wealthy, those who have what they have by virtue of being paid by somebody? You got socked. You got socked to the point that you're never gonna be able to accrue wealth, and that has been the point.
The whole point of the income tax is to prevent the acquisition of wealth. But the asset wealthy... Have you ever heard of "carried interest"? Have you heard that discussed much in the past? Probably not. Carried interest is how hedge funds -- and it's a very complicated thing. But the simplest way to explain carried interest is it's income that's taxed at the capital gains rate, which is now 20%. That is 1/2 of the new income tax top bracket rate of 39.6% or 40%.
That's a huge difference. Cap gains went from 15 to 20%. That is the increase that the asset wealthy are going to see. Now, when Obama talks about raising taxes on "the rich," that's who people think he's talking about, the Warren Buffett's and the Bill Gateses, and I'm telling you: They're not touched, and the hedge fund people are not touched, and the Wall Street people are not touched. Neither party, by the way, wants to touch 'em because these are the people that donate to political campaigns and both parties.
These are the people that bundle campaign donations.
These are the people that go out and fund-raise as well as donate.
The asset wealthy got away scot-free, other than the 5% increase in the capital gains rate. And here's Obama fulfilling this illusion that the rich just had it handed to 'em. Well, the income rich did just have it handed to 'em, but they are not the wealthy, and they are not the people Obama wants the low-information voter to think he's talking about. The people who aren't "paying their fair share," if you want to look at it that way... I happen to hate that expression, because I think it's bogus.
But since that's the language of the day, I will use it.
The people that Obama talks about that are not paying their fair share still aren't; and the people who are already paying the vast majority of the tax burden are now paying more of it. It's ridiculous what has been agreed to here. It is absolutely unbelievable. And here's Obama now claiming that the sole reason we have an economic morass and an economic problem is because we've had all these tax cuts for the rich, and the Republicans have confessed that he's right about that.
By agreeing to raise the taxes on the income rich, Obama got his confession.
Here's more of Obama before we go to the break...
OBAMA: I believe that there's further unnecessary spending in government that we can eliminate.
OBAMA: But we can't simply cut our way to prosperity. Cutting spending has to go hand in hand with further reforms to our tax code so that the wealthiest corporations and individuals can't take advantage of loopholes and deductions that aren't available to most Americans.
RUSH: Well --
OBAMA: And we can't --
RUSH: Stop the tape!
OBAMA: -- keep on cutting things --
RUSH: Look, folks. If you really want to believe him on this, go start asking anybody about the carried-interest loophole, which was untouched. You will quickly learn (you don't have to learn; I'm telling you) that everything Obama's saying here is bogus. There aren't going to be any spending cuts. The Republicans are not going to have any new leverage.
The media is not going to pressure Obama into cutting spending now because the Republicans bit the bullet and raised taxes. There isn't gonna be any of that. The Republicans keep throwing away aspects of their core beliefs under this silly belief that that's how we'll get things done. "We'll finally get to what matters! We'll get this tax business off the table, and now we can focus on spending."
RUSH: We haven't fixed anything. We have not solved anything. There is nothing that this country faces -- no serious consequence -- that was dealt with in this most recent agreement. All there is is a continuing collapse of this great country, a collapse of the economic system, a collapse of the political system. We've got politicians in both parties running around slapping themselves on the back.
"Oh, what a great deal!"
Everything's a crisis down to the last minute, and we solve nothing. We didn't deal with one fundamental problem. Not one fundamental problem facing this country has been dealt with. We've papered over a bunch of problems. We've kicked the can down the road by engaging in showbiz, theatrics, political theatrics. Nothing was done of any substance whatsoever -- other than by Obama, who is succeeding in his warped desire to transform this country.
I was in Hawaii on vacation, and I'm watching this. After the Republicans agreed to raise taxes on the rich, Obama goes to the Eisenhower Executive Office Building for a pep rally -- a campaign rally complete with supporters -- to applaud the rich getting stuck with all this again. American citizens, workers, producers -- people that hire other people, job creators -- were being punished. The illusion was that they were now, finally, gonna pay their "fair share."
They were being punished, is what was happening. And Obama was leading a pep rally of low-information Obama supporters applauding the punishment of fellow Americans for the crime of succeeding and not paying enough to the government. See, the Republicans go, "Okay, well, we'll -- we'll -- we'll -- we'll concede! We'll confess. Our tax cuts on the rich have been the problem all along." So the collapse continues. Fixing nothing continues. The transformation of the country into something nobody's gonna recognize, it continues.
RUSH: Now, the president of the United States, it was reported by Fox News' Ed Henry last week, after the Republicans agreed to raise taxes on the rich, Ed Henry says that Obama is calling getting the Republicans to break its tax pledge, "one of the most consequential policy achievements of the last 20 years." Don't doubt me. From the first moment I mentioned the theory that what Obama was seeking was a Republican confession, a Republican concession, Republicans agreeing with him that tax cuts for the rich starting with Reagan through Bush really led to the problems that we have today economically, and that that's what Obama was really wanting the Republicans to agree to. That was his political aim, to be able to get the Republicans to confess.
And I can tell you, I was not named, but many conservative commentators inside the Beltway pooh-poohed that theory and mocked it and laughed at it, and yet the president now has twice confirmed it. He goes to the pep rally at the Eisenhower Executive Office Building and leads a pep rally applauding the punishment of the so-called rich. Their taxes go up. They're being punished. That's what the low-information voter thinks. That's why he's applauding. It's their fault. Now we're finally gonna get the economy moving. Now we're gonna get the deficit down. Now we're gonna get the debt down. The rich are gonna pay their fair share for the first time in a long time, and Obama did it, and the Republicans admitted it. That's what was at stake here, and that's what's happened.
It will still be pooh-poohed and mocked and laughed at, but the president himself said one of the most consequential policy achievements of the last couple of decades was getting the Republicans to break its tax pledge, getting the Republicans to give up on this notion of low taxes. And Obama's not through. Obama has cut a video, ladies and gentlemen, a video distributed by his reelection campaign, which has no reason to exist anymore. Obama is not running for reelection, but the campaign still exists. They're still raising money, and they're still spending money, and Obama has cut a video. And in this video Obama reiterates his belief that the wealthiest Americans aren't paying their fair share.
This video is running today. After the deal, after tax increases for the rich, Obama has a video running, the wealthy still aren't paying their fair share of taxes. And in this video, Obama outlines a second-term agenda ranging from environmental policy to gun control to immigration. He starts the video by celebrating the tax increases, making our tax code more progressive than it's been in decades. Obviously still more to do, says the president, when it comes to reducing our debt, and "I'm willing to do more as long as we do it in a balanced way that doesn't put all the burden on seniors or students or middle-class families."
What do we call this deal that just happened anyway? I don't even know what this deal is called. It's not the debt limit deal. That's coming up in February where we'll cave again. Fiscal cliff deal. That's right. Fiscal cliff deal. I thought the fiscal cliff protected the middle class. I thought the fiscal cliff protected seniors and students. But, no, they need more protecting. See, the fact of the matter is that those people's taxes are going up, too. The temporary payroll tax cut did not make the cut. And so people are going to see, on average, a thousand dollars taken out of their paychecks this year because the payroll tax cut expired.
So there's already a middle class tax increase there, and there will be more. But Obama's not through raising taxes. The understated point here is that what is taking place is an attack on individuals, particularly younger people, younger people who seek to acquire wealth. That's been part of the American dream for as long as there has been an America, wanting to improve your lot in life, wanting to improve your standard of living for you and your family. Parents have always wanted their kids to do better than they did. That's been part of this thing called the American dream, and acquiring wealth has been part of it. But now that stinks.
The desire for wealth is now filthy. To want wealth is immoral, is unjust, because wealth has been the problem, don't you see. Wealth, people doing well, that's been the problem all along. That's what Obama believes and that's what he's succeeding in persuading a lot of people to agree with him. Young people have always sought to acquire wealth, but you can't acquire wealth without income. Taxing income, as Obama is doing and wants to do even more, is aimed at harming those who haven't yet acquired much wealth but want to. Your kids. Maybe even you.
RUSH: Back to the audio sound bites. Here's Obama, this is yesterday. This is on the website. I mean, Obama's got a video, a campaign video. I mentioned it earlier. The Obama campaign is producing videos saying we're not through raising taxes. He's doing pep rallies. His voters, his supporters are showing up to cheer tax increases on the rich. In effect, they're cheering other people being punished by the government. That's what is happening. That's what Obama wants the perception to be, people cheering the government punishing other citizens.
So here's a portion of what Obama was discussing, and now that he has gotten his Republican confession, that tax cuts for the rich led to all these problems. And, make no mistake, that is what happened in the fiscal cliff deal. The Republicans, as far as Obama's concerned, they admitted it, by agreeing for the first time in 20 years to get rid of their promise never to raise taxes. By throwing that away, that's a major achievement Obama says he got. He got them to admit culpability in the economic problem. Now that he's got that, he has declared that there will be no spending cuts without tax increases in the future. Here's what he said.
OBAMA: Just recently, Republicans in Congress said they'd never agree to raise tax rates on the wealthiest Americans. We've now raised those rates permanently, making our tax code more progressive than it's been in decades. Obviously there's still more to do when it comes to reducing our debt. And I'm willing to do more, as long as we do it in a balanced way that doesn't put all the burden on seniors or students or middle-class families. But also asks the wealthiest Americans to contribute and pay their fair share.
RUSH: Wait a minute. I thought they already did. I thought the fiscal cliff deal -- what is this? He's just recycling it. Even after tax rates on the rich went up, we gotta do it again. The wealthiest Americans must contribute and pay their fair share. I guess even this latest increase, that's not enough. So in this video, to his supporters on his campaign website, Obama is assuring his voters that he's gonna go after more. He says, "Just recently Republicans in Congress said they would never agree to raise tax rates on the wealthiest. Well, we've now raised those rates permanently." He got his confession from them. He got them to confess and now he's telling us there's going to be more. And there aren't going to be any spending cuts. By the way, of those in the middle class, here's Peter Orszag, this is Obama's former management budget director. He's one of the architects of Obamacare. He was on CNBC this morning.
ORSZAG: It's like we passed the midterm, the final exam's coming up. It's a pass. Lots of good things, a permanent AMT fix. I'm actually worried -- this is outside the, you know, political conventional wisdom, but I'm worried that we've now locked into a revenue base by making even the middle class tax cuts permanent. That doesn't really work in 2020, but that wasn't ever going to be any different, so it's a pass.
RUSH: Orszag is saying, I'm not crazy about this deal because it doesn't raise taxes on the middle class. It locks in tax rates. We're gonna need taxes from the middle class. What Orszag is saying is, your turn is next. You're coming. You in the middle class think that only the rich are getting punished, but you're next 'cause you have the money.