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Tax Hikes are Off the Table? Really?

BEGIN TRANSCRIPT

RUSH: Let's go to Mitch McConnell, sound bite number one.  This is yesterday on This Week with George Stephanopoulos, who said, "Look, the deadlines are approaching.  I think the president has said he's willing to engage in more discussions over the sequester and the government shutdown, but that would also include new revenue.  You say the tax debate's over."

MCCONNELL:  Oh, yeah, the tax -- the revenue -- the tax issue is finished, over, completed.  That's behind us.  Now the question is what are we gonna do about the biggest problem confronting our country and our future, and that's our spending addiction.  It's time to confront it.  The president surely knows that.  I mean, he has mentioned it both publicly and privately.

STEPHANOPOULOS:  Are you saying that any discussion of revenue is completely off the table going forward?  You will not accept any new revenues in any new deal?

MCCONNELL:  Yeah, absolutely.  The tax issue is behind us.

RUSH:  Now, is this not loaded?  Let's take this in order.  Here McConnell says, "Okay, the tax deal's done."  Now, this is what the Republicans think, folks.  We talked about this last week.  Give up a core issue, go along with tax increases, takes it off the table, now that focuses everybody on spending.  The media's gonna go after Obama on spending, "Okay, Barack, the Republicans gave in, now it's time for you to."  They think that's what's gonna happen.  It's not gonna happen.  We're not through with tax increases.  The Democrats are promising more.  They're salivating for more.  Now, where does this notion that taxes are off the table come from?  Listen to George Will during the roundtable yesterday with George Stephanopoulos.

WILL: People will look back on this deal as where liberalism passed an apogee and went into decline for the following reason: 172 House Democrats voted to make the Bush rates permanent for all but 1/2 of 1% of American taxpayers. What that means is -- is that they can no longer tax the middle class. You cannot fund the state that liberals want, the entitlement state, without taxing the middle class at least, and now you've given up that with the locking in as permanent law the Bush tax rates. That's off the table.

RUSH: Okay, so that's the prevailing wisdom. But the reason why the Republicans think that new "revenues" are finished is for this very reason: The Bush tax rates, which were set to expire, are now locked in, in perpetuity. And those are tax rates on the middle class. And they didn't go up. They didn't go down, but they stayed the same. Now, it is true that you can't fund a welfare state without taxing the middle class. You just can't do it. We're proving it.

We've been proving it the last four years and we're gonna prove it for as long as this circumstance survives. You just can't fund it. The tax increases are the rich are gonna raise about $60 billion a year, and Obama already gave away ten billion of that for Sandy relief, Hurricane Sandy. So we're down to $50 billion this year from the tax increase on the rich. That can't pay for the welfare state. So they're thinking, "Well, we got the Democrats to agree: No tax increase on the middle class. That wasn't a toughie."

The Democrats are all for the notion they're not going to raise taxes on the middle class. But if the Democrats ever get the House of Representatives back, this is all out the window, and everybody should understand this. Just because this year they locked in tax rates for the middle class and made them so-called permanent... They're "permanent" until they're changed. And what'll change them is a Democrat House with a Democrat president. Everybody ought to know that that is what's gonna happen if the Democrats win the House in 2014 or any other time.

But plenty of other taxes are gonna go up. Payroll tax, Medicare tax, Obamacare. There are gonna be plenty of taxes go up on the middle class. However, Stephen Moore is writing for the Wall Street Journal. He's part of the editorial board there. He did a sit-down with Boehner, and this is quite illuminating. Boehner told Stephen Moore that he was shell-shocked in there talking to Obama. Because every time Boehner... This is what he said. Every time he told Obama (paraphrased), "We got a spending problem," Obama would reject it.

He'd say, "No, we don't. Our deficit's not because of spending. Our deficit is because of out-of-control health care in this country, and I fixed that." Boehner was insistent that Obama was insistent that we don't have a spending problem and we never have had one. The only reason we're running deficits, and the only reason we have a national debt, is because of our health care being out of whack -- which Obama has now fixed. And that's it. And Boehner said he was stunned and he didn't know what to do. He didn't know how to react to that.

Which proves my point.

These guys don't know what they're up against with Obama. They still don't know who he is. They still don't know what he's about, and they still make the mistake of assuming he's telling them the truth. Does anybody really believe that Obama really believes we don't have spending problem? He knows we got a spending problem. It's a problem he enjoys. It's a problem he wants. He wants to spend more! I don't believe Obama's sitting around in the cover of darkness telling himself that he's a big spender. Democrats spend big on the big welfare state. That's how they empire themselves.

You know the drill. But Boehner made it clear that Obama would not ever admit even one time that we have a spending problem, which also illustrates my theory (espoused numerous times in recent months) that there's nothing in common with these two. The Democrats and Republicans have no common ground. There's no way to fashion a bipartisan agreement because there's nothing we have in common. Boehner says, and the Republicans say, that our problems are spending. Obama says: "No, we don't have a spending problem. It's health care and I fixed that."

So there simply is no common ground. Now, this idea settled in that the tax rates on the middle class are locked in. They were temporary -- and they were. They were temporary under Bush but now they've been made permanent, and it is true: The middle class still is, in an aggregate sense, where all the money in the country is. That's where all the money is in the economy. The rich do not hold all the money. Now, low-information voters don't believe me when I say this if they're listening, and they certainly don't understand it.

Most people in this country who vote, a majority of them, believe the rich have all the money. The middle class think they all used to be rich at some point, and when they weren't looking the rich stole all their money. They believe this. I mean, it's what they've been told. It's just like African-Americans today can be convinced that they are still slaves. Jamie Foxx does it every day. Samuel L. Jackson, the Reverend Jackson, try to make the case that there's sill slavery in this country. Well, the middle class is made to believe every day that one point they were rich, but the rich came along and screwed them out of everything and the rich have all the money.

They don't. The middle class still the greatest contention of wealth on an aggregate basis, and if you're not going to raise taxes on them then you're not gonna be able to pay for the welfare state, and we're not gonna have a welfare state that's growing. We have one now. If it's gonna continue to expand, it's gonna be unfunded. But this idea that there aren't gonna be any new taxes, that they're off the table? I think the Republicans really believe that this. I said last week, "How many core beliefs are we going to throw away in hopes that we'll get down to what's really important?"

And that was one of the things that inspired or motivated the Republicans to agree with Obama on the fiscal cliff deal. "Okay, let's just give them the tax hikes. Let's get the taxes off the table!" Bill Kristol said, "Get the taxes off the table. Get the taxes off the table." They did it, and they think the taxes are off the table. And now all we got to look at is spending. He says it's a big problem. The president doesn't think that's a problem. There is not a spending problem. He told Boehner that. The idea of Boehner... Boehner also said he didn't know what to do. I'm paraphrasing.

Boehner said he was shell-shocked; he didn't know how to react. That is itself quite illustrating.

BREAK TRANSCRIPT

RUSH:  Yesterday on the Meet the Press... Cookie you don't need to go get the bite. I don't need the bite.) David Gregory, the host on Meet the Press, asked somebody... They were talking about the fiscal cliff deal, and David Gregory said to somebody (summarized), "Well, look, could we have really spared ourselves a lot of trouble in the economy if the Republicans would have just agreed a year ago to raise taxes on the rich? 

"If they were gonna do it, could we have helped ourselves by raising taxes on the rich a year ago?"  And you'd have to say so. Using the thinking that the Republicans engaged in to go along with raising taxes on the rich, you got to say so.  If raising taxes on the rich is good, if it's something that's gonna help, they should have done it sooner, right?  They should have done it sooner and maybe should have done it bigger. 

See, this is the problem the Republicans have created for themselves. 

And now taxes are "off the table." (chuckling)  Wait 'til you hear Democrat sound bites on that. 

BREAK TRANSCRIPT

RUSH: I want to go back, Mitch McConnell was on ABC's This Week yesterday.  And he said that with the fiscal cliff deal, that the tax issue's finished, it's over. They got that taken care of. That's off the table now.

MCCONNELL:  Oh, yeah, the tax -- the revenue -- the tax issue is finished, over, completed.  That's behind us.  Now the question is what are we gonna do about the biggest problem confronting our country and our future, and that's our spending addiction.  It's time to confront it.  The president surely knows that.  I mean, he has mentioned it both publicly and privately.

STEPHANOPOULOS:  Are you saying that any discussion of revenue is completely off the table going forward?  You will not accept any new revenues in any new deal?

MCCONNELL:  Yeah, absolutely.  The tax issue is behind us.

RUSH:  There you have it.  The tax issue is behind us.  And one of the reasons it's behind us is because -- and the Republicans are celebrating, by the way, I should tell you. The Republicans are celebrating because the Bush tax rates for 99% of the country are now locked in, the middle class, they're locked in.  They were permanent.  Now they're locked in.  I mean they were temporary.  Now it is said they're permanent, but of course nothing's permanent in Washington.  If we get a Democrat House, those taxes are gonna balloon, and middle class taxes are going up anyway.  I just wanted you to hear McConnell say that from the Republican standpoint, okay, cool, we did it, we got taxes off the table. 

This is why, by the way, if you're paying attention, you're seeing this, or you're hearing it.  I don't care where you look in conservative media, you are seeing, "Hey, you know what?  The Republicans actually put together a winning deal here.  They actually pulled it off.  Obama doesn't know it yet, but he got skunked."  Now, that's the extreme.  Not all in the conservative media are going that far, but National Review, Weekly Standard, the blogs are all making the case that the Republicans -- so what it means is that the conservative media inside the Beltway is tied or linked to the Republican establishment, and that's the storyline, so they're putting it out. 

And that's what McConnell's saying, "Oh yeah, tax issue, done. We won that. We got tax rates for the middle class locked in. Obama wanted to raise 'em." Obama never wanted to raise middle class taxes, not openly like this.  They can tell themselves this. If it makes 'em feel better they can go ahead, but going over the cliff, the taxes woulda gone up because the rates would have expired, then Obama would have been the first guy proposing middle-class tax cuts.  I guarantee you that outside of conservative media, Obama's getting all the credit for this.  The Republicans aren't. 

Anyway, I'm distracting even myself.  The point here, as you heard McConnell, "Taxes are done, it's over, no more tax.  We got that off the table."  It's another reason why the Republicans are being said to have really gotten the best they could out of this. Yeah, got a core belief off the table here, a core belief off the table there, and now we can get down to talking about spending.  Except Obama doesn't think we've got a spending problem.  He told John Boehner -- this is in a Stephen Moore column at the Wall Street Journal.  Every time Boehner told Obama we got a spending problem, Obama said, "No, we don't and I'm tired of hearing about it."  Boehner quotes Obama as saying, (paraphrasing) "We don't have a spending problem.  I'm tired of hearing about it.  The reason that we're in debt is because of health care costs, and I fixed that with Obamacare." 

So no common ground. There's not gonna be any spending reductions here.  You can hope and dream, it isn't gonna happen.  But I just want you to hear some Democrats talking about taxes, since the Republicans are convinced that's done.  Oh, yeah, tax issue is behind us.  First up, Barack Obama, Saturday morning, White House YouTube channel.

OBAMA:  For the first time in two decades, we raised taxes on the wealthiest 2% of Americans in a bipartisan way, while preventing a middle class tax hike that could have thrown our economy back into recession.  But all this was just one step in the broader effort to grow our economy and shrink our deficits.  The wealthiest individuals and the biggest corporations shouldn't be able to take advantage of loopholes and deductions that aren't available to most Americans.

RUSH:  Okay.  So they got the Republicans to confess and to concede that tax cuts for the rich were the problem.  And we fixed that in a bipartisan way.  But we're not through on the rich because now we gotta go after their deductions and loopholes.  But, wait, Republicans say taxes are off the table.  What's gonna happen when Obama comes back and says we gotta close some of these loopholes?  I guarantee you what's gonna happen.  Every time Obama and the Democrats say "jump" when it comes to tax increases on the rich, the Republicans will.  Now that they've got it behind 'em.  Okay, so that's Obama, gonna go after the loopholes, then gonna go after deductions.  Here is Senator Dick "Turban" from Illinois on CNN yesterday.  Candy Crowley said, "Let me ask you about money to be saved in tax reform, because if the government saves money in tax reform, that means somebody's taxes go up.  Do you think taxes have been raised enough on the wealthy?"

DURBAN:  There are still deductions, credits, special treatments under the tax code which ought to be looked at very carefully.  There are plenty of things within that tax code, these loopholes where people can park their money on some island offshore and not pay taxes.  These are things that need to be closed.  We can do that and use the money to reduce the deficit.

CROWLEY:  So there are other taxes that you believe that you can, however you want to put them, raise, retrieve, whatever, from the wealthy?

DURBAN:  Absolutely.

RUSH:  Yeah, taxes are off the table.  The tax issue is behind us.  We don't have a tax problem. See, the tax issue, we got that done.  Now we're gonna be talking about spending.  The Democrats haven't gotten the message.  They're still talking about raising taxes.  Now with closing loopholes.  Here's Pelosi also on Slay the Nation.

PELOSI:  No, it is not.  I mean the president had said originally he wanted $1.6 trillion in revenue.  He took it down to 1.2 as a compromise.  That is not enough on the revenue side.  We've changed the rate.  The high end tax rate, 39.6, very important step, and again, there's much more that we can do by just subjecting it to the scrutiny of what is bringing in revenue, what is creating growth.

RUSH:  Well, look, she's often totally oblivious.  She doesn't know what she's talking about.  But there is no growth, folks.  And there can't be.  Mathematically it's not possible.  You can't take all the money out of the private sector that they are taking and then have the private sector grow.  The private sector has to shrink.  And the less money, the less capital circulating in the private sector for wages, raises, investments in growing business.  Less money means less investment.  It can't grow.  And they want to take another trillion dollars.  They've got $1.2 trillion they've taken out, they think, with this latest maneuver, they want another trillion taken out of the private sector. 

Pelosi starts talking about growth at the same time, it's not possible mathematically.  But they're not through, is the point.  And if they ever get control of the House back, those middle class tax rates are going up.  The welfare state is the most important thing to them, not the middle class.  The welfare state is the number one thing.  It must grow.  It must include more people.  Santa Claus.  It must include more voters.  So Bob Schieffer said to Pelosi, "People who are listening to you this morning are gonna say that you're talking about more taxes.  You're talking about bringing in more in one way or another.  You're still talking about increasing taxes."

PELOSI:  One thing I'm not talking about is bringing in more at the expense of the middle class, at the expense of the middle class.

SCHIEFFER:  Are you, then, saying to the upper classes, "Get ready, you're going to have to pay some more. This is not the end of it."?

PELOSI:  I'm saying that's not off the table.

SCHIEFFER:  That's not off the table?

PELOSI:  That's not off the table.

RUSH:  Wait. See, Mitch McConnell:  Tax issue is finished, it's over, it's completed, it's behind us.  Now you got Pelosi and Dick Durban here and Obama talking about they're gonna get even more.  And the money they're taking is from the people who hire other people.  I got one more Pelosi bite here, and it's also Slay the Nation.  Bob Schieffer said, "Why do we go through this debt limit thing every year now?  Why do we go through all these crises, Madam Leader?  'Cause it embarrasses everybody."

PELOSI:  Well, you ask the Republicans, because we always pass the debt ceiling when President Bush was president, as he was incurring these massive debts and the Republicans weren't saying boo at the time.  If I were president, I would use the 14th Amendment, which says that the United States will always be paying --

SCHIEFFER:  You would just go ahead and do it; you wouldn't wait for Congress --

PELOSI:  I would just got do it, right.

RUSH:  Yeah, just gotta do it.  Just raise it.  To hell with Congress.  Just use the 14th Amendment and just raise the debt limit, to hell with that.  That's what Pelosi wants.  So Schieffer said, "What happened in Washington, what happened?  It simply did not use to be this way, Ms. Pelosi.  What do you think is wrong here?  What happened?  What needs to happen?"

PELOSI:  I keep saying to my Republican friends, "Take back your party, this isn't the Grand Old Party that did so many things for America, that commanded so much respect."  We need a strong Republican Party.  This is really the over-the-edge crowd.  That's the way I see it.

RUSH:  What she means is there are too many conservatives still in the party.  She doesn't want a big Republican Party.  She wants a small Republican Party made up of traditional Bob Michel type Republicans who know that their mission is to go to Washington and be losers and smile about it.  That's what she is advocating returning to. 

END TRANSCRIPT

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