Revenue. Is he the only republican . I dont care how we do it. Raising tax rates hurt the economy. Lets just go over the [ bleep ] cliff. If they do not make this deal on tax rates for the top 2 , then theyre going away. I just hope this doesnt become a game of chicken. I will not play that game. It goes into february and march. Public opinion is on their side. When we have to raise the debt ceiling. I will not play that game. This is about gaining maximum leverage. Weve gone through this before. Some republicans believe that will give them more leverage. Its government at the brink all the time. These guys are not serious about negotiating. The next 72 hours are critical. I think were going over the cliff. Lets just go over the [ bleep ] cliff. Lets go over the cliff. At least for a few seconds it will feel like were flying. With 26 days to go until america goes off the fiscal curb, the house of representatives chose to end their congressional business for the week today to enjoy a long weekend at home, but john boehner stayed behind and spoke by phone this afternoon to president obama. It was their first conversation in a week. Also, this afternoon treasury secretary tim geithner said this on cnbc. When it comes to raising taxes on the wealthy, those making more than 250,000, if republicans do not agree to that, is the administration prepared to go over the fiscal cliff . Absolutely. Again, theres no prospect to an agreement that doesnt involve the rates going up on the top 2 . The New York Times reports that senior Republican Leadership aides are contemplating a fallback position on a fiscal deal. They could foresee taking up and passing legislation this month to extend the tax cuts for the middle class and then resume the bitter fight over spending and taxes as the nation approaches the next hard deadline. Its statutory Borrowing Limit which could be reached in late january or february. Speaking to a business roundtable, president obama responded to that idea this way. If congress in any way suggests that theyre going to tie negotiations to debt ceiling votes and take us to the brink of default once again, as part of a budget negotiation, which by the way we have never done in our history until we did this it last year, i will not play that game. John boehner and house Republican Leadership met with Small Business owners today to talk about the fiscal cliff, raising tax rates on the richest americans for them is still off the table. The revenues on the table are coming from, guess who . The rich. There are ways to limit deductions, close loopholes, and have the same people pay more of their money to the federal government without raising tax rates, which we believe will harm our economy. If the president doesnt agree with our proposal and our outline, i think hes got an obligation to send one to the congress. A plan that can pass both chambers of congress. Joining me now is former vermont governor howard dean and msnbcs krystal ball. Governor dean, our treasury secretary is a very careful speaker. When asked if theyre prepared to go off the cliff, his first word was absolutely. There was nothing, nothing could be more clear that this Administration Means what they say about getting what they want at this point. Yeah. The only problem is this is a little initially going to team like heresy, the truth is Everybody Needs to pay more taxes, not just the rich. Thats a good start. We wont get out of the problem to raise taxes across the board to go back to what bill clinton had in his taxes. If we dont do that, the problem is pressure is on spending even more. I think we need to make the defense cuts. We want to minimize Human Services cuts. The best way to do that is go back to clinton era taxes. I actually have mixed feelings about striking a deal where the rich folks pay more taxes. I think they should pay more taxes, but i actually think going off clithe cliff is a bet solution than just charging people who make a lot of money what they were paying when bill clinton was president. The clinton tax rates worked well, and when you look at where we really are today, although the democrats are playing really tough on these top tax rates, they have conceded about 75 of the tax debate to republicans by agreeing with them on all of the other rates. That is true, aalthough there is a matter of timing. You know, i think part of what you have to look at here is its really hrepublicans who force this conversation about having deficit reduction right now. We shouldnt have deficit reduction right now. We should focus on jobs and employment and continued stimulus for the economy, which i was really happy about the president at least had some of that in his plan. Then you ask yourself, okay, what could you do in terms of reducing the deficit that would be the least damaging, and what economists say and what makes common sense is people at the top end of the income scale, who can afford to pay a little more, thats the place where we can raise the rates now and not have a Major Economic impact. So i take the governors point, and i agree with it. We probably are going to if were going to continue to make the promises and keep the promises that i think are so important and most progressives do, we probably need to raise taxes on a lot of people. Its a question of timing of when to make those choices. The Rush Limbaugh showed us today how difficult it is for john boehner and eric cantor to make the moves theyve already made. Lets listen to what rush said. What we got today was a seminar on how to surrender. Obama is going to get what he wants. Were using his language. Were now calling new taxes revenues. We have accepted the premise that new revenues will result in greater tax receipts Going Forward. They must feel so squished, so defeated, so universally disliked. Governor dean, theyre still far apart, democrats and republicans, but its worth pointing out how far the democrats have moved since the election it to where they are today. They left that Rush Limbaugh thinking far behind. Its a good thing, because Rush Limbaugh is nowhere near the mainstream of the American People. Im also worried about the defense cuts. I think we need to make the cuts. We havent cut the Defense Budget much in the last 30 years. They just ordered new uniforms for their chauffeurs for the top brass. You know, this is going to be a lost opportunity if theres too much compromising going on here. Im going to stick to my position wed be off going over the cliff, the curb. Its a slope and not a cliff. I take krystals point as a good point. You have to pick your time. The europeans are done too much with austerity. I think we can afford to do this, and we ought to make the down payment. The cliff doesnt fix the deficit, but it really does make a downpayment and gets defense cuts for the first time. You know damn well the defense wont get cut if they make a deal on this. In the New York Post today a conservative columnist wrote the trut is every way you look at it, the gop is trapped. Republican politicians will save and give the president most of of what he wants. The only real question is when. The answer is probably at the worst possible time when theyve done even more damage to the partys brand. It seems to me from the perspective he doesnt specify the worst possible time will be after they drive the thing off the cliff. If theyre going to do this, they should do it before christmas and go home. I think youre right. Weve seen tom cole and others starting to say, you know what, guys . Maybe we should go along with the obama plan to extend the rates for the middle class and deal with the rest after the new year. That probably is their best play at this point, because thats such a damaging political point. People understand that republicans are holding the middle class tax cuts hostage in order to fight for tax cuts for this very small percent of the population, and thats politically devastating. If you look at the position boehners in, its remarkable in a way that hes already admitted that we have to raise revenues on the wealthiest individuals, and that hasnt come without a price. You already see on the right between that and his movements of some Committee Members assignments that there is a mini rebellion starting on the right. The hash tag fireboehner is taking off. This is something he has to watch. The compromise is not his initial starting position, which is already unacceptable to people like jim demint and others. Governor dean, if you looked at this from the republican perspective and you go with what horowitzs presumption theyre going to cave on rates at some point and go along with it, would you advise them politically the sooner the better . Get this off the doorstep. They need to do that. Had they not taken such extreme positions mitt romney might have done a lot better. I think the president is in command here. Theyre not going to beat him on this one. Theyll make themselves look bad. I think they do, and if i were them i would do what boehner is talking about. Heres the other problem, though. If boehner is not going to get the 60 or 70 tea party people, so he has to get some democrats. I dont think he can get democrats if they do Something Like try to raise the age of medicare or Something Like that. Eligibility for medicare. That is a nogo zone for any reasonable, respectable democrat. This is not even. Even if boehner caves, he cant bring his caucus with him. He has to deal with nancy pelosi one way or another. Howard dean and krystal ball, thank you both for joining me tonight. Thanks. Coming up, there is a Sleeping Giant in the tax policy issues facing the president and congress, and no one is talking about it yet. Another republican is taking shots at mitt romney, and this time of all people its paul ryan. And also coming up, marijuana, marriage, hillary clinton, seceding from the union and gangham style are all in the rewrite. Ier. Well, having a ton of locations doesnt hurt. And a santa to boot [ chuckles ] right, baby. Oh, sir. That is a customer. Oh. 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And washington is turning to gangham style politics, and thats in the rewrite. How did i do with that . It was good. It was good. What is your new fancy title at the show . Digital producer. And the people are americanizing this pronunciation, and its wrong. Whats the wrong pronunciation. Gangham. You didnt say it that way, which is good. I said it the right way . You said it the right way. Stand by. Well have to do more of this in the show. Just like an officer helps a captain explore the universe, zeebox helps you discover what shows are most popular, where the biggest buzz is, or what the stars are watching now. Download zeebox free, and let your tv go where its never gone before. announcer when subaru owners look in the mirror, they see more than themselves. So we celebrate our yearend with the share the love event. Get a great deal on a new subaru and 250 dollars goes to your choice of five charities. By the end of this, our fifth year, our total can reach almost 25 million dollars. Its a nice reflection on us all. Now through january 2nd. If we want to improve our schools. What should we invest in . Maybe New Buildings . What about updated equipment . They can help, but recent research shows. Nothing transforms schools like investing in advanced teacher education. Lets build a strong foundation. Lets invest in our teachers so they can inspire our students. Lets solve this. The fascination with taxes i paid i find to be very smallminlded compared to the broad issues that we face, but i did go back and look at my taxes. Over the past ten years i never paid less than 13 . I think the most recent year is 13. 6 or Something Like that. 13 . You know who would hate that . You know who would hate that mitt romney paid only 13 in income taxes . The guy who beat mitt romneys father in the campaign for president in 1968, right wing reactionary Richard Nixon. Thats right. Republican Richard Nixon who was as conservative as republicans got in those days hated the idea that rich people got away with paying little or no income taxes. He introduced a bill that would create a minimum tax that rich people would have to pay even if they had the giant package of deductions and loopholes like romney that got their Tax Liability down to zero. They had to pay something. The nixon idea was theres a basic minimum to pay no matter what their deductions say. The idea was called the alternative minimum tax, and Richard Nixon signed it into law in 1969 saying a large number of highincome persons who paid little or no federal income taxes will now bear a fairer share of the tax burden through enactment of a minimum income tax comparable to the proposal i submitted to the congress which closes the loopholes that permitted much of this tax avoidance. The trouble with the amt, which is now 43 years old, is unlike regular income tax brackets it hasnt been indexed for inflation. As it holds its position in the tax code, it starts to affect more and more taxpayers as incomes rise with inflation over time. Congress has historically fixed this will little problem one year at a time. Not surprisingly this congress has not yet gotten around to fixing the amt for tax year 2012 and the amt fix is now the Sleeping Giant in the fiscal cliff budget negotiations that as of this hour are still focused entirely on income tax rates. There is much more that congress has to solve than income tax rates including the amt, medicare spending, medicaid, and possibly Social Security. Joining me to talk about the things that congress is not yet talking about but will soon be talking about, joey reed and chris hayes. Chris, the amt has a deadline to it that is sharper than anything else in here, because these 2012 tax returns going to have to be calculated with either this new version of the amt or the fixed version, and that is the difference between it affects it adds tens of millions of people getting bitten by this thing. I know that the insiders are more worried about that actually getting fixed than the cliff at this point. Yeah. When i started covering capitol hill in washington, there were two things that people talked about, which was the amt patch and the dock fix. Everyone is like where are we on the amt fix. They adjust the payments and do this thing with the amt. We were asking early on, is there a way . This seems like a strange way to legislation the things. When you look at the difference between the baseline, which is current law and policy, aa lot is the wedge between those two things. Theres an assumption every year it will get fixed. The big question after the debt ceiling is the assumption things get fixed because they have in the past, is that now a tenable or plausible assumption Going Forward because we have entered New Territory in the postdebt ceiling era. It will affect 28 Million People if they dont fix it. The reason they dont fix them longterm is it budgetarily costs a massive amount of money to do it. Its ridiculous. Its the reason bushs tax cuts had this tenyear sunset on it. In the budget windows, it goes on forever. They couldnt afford it. They do this year to year. But this is going to be Everything Else you can fix retro actively. Trying to unwind this amt problem if you dont have it fixed by new years eve or in the first couple of days of january, it becomes a nightmare. Yeah, and for people who do their own taxes, can you imagine the Software Makers to reconfigure how to do it. You cant do anything. Its insane. When nixon signed this it was based on a report that 155 people didnt pay taxes. A small number of people created these things. These are people making 200,000 or more which was astronomical money back then. Republicans and conservative it is dont believe in the amt, but they like to keep it around. When they had chrome of congress during the bush era, they could have gotten rid of it. They keep it around because it up happens to be a tax that falls more heavily on blue states. The amt basically doesnt allow you to deduct for things like your state income taxes and hits states with high property taxes and high income taxes hard, so youre talking california, connecticut, new york. Its like the obama don or closet. And orrin hatch made that point this year, a republican senator. He said the amt hurts them more than us. They dont have to worry about it. They think thats their leverage. I want to think about other things discussed once we get past the tax rates, and i want to hear listen to president obama today talking about smflt other things, the spending cuts that are involved and what theyre dealing with here. I think theres a recognition that maybe they can accept some rate increases as long as its combined with serious entitlement reform and additional spending cuts. If we can get the leadership on the republican side to take that framework, to acknowledge that reality, then the numbers actually arent that far apart. Another way of putting this is, we can probably solve this in about a week