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'Plan B' Broken Down

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  • Description

    Wall Street Journal deputy editor Dan Henninger weighs in on 'Plan B.'

  • Duration 3:26
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Clancy.

Well I think plan B will will hold -- Connell -- Let's talk about the million dollars John Boehner is proposing it seems to meet this helps us understand what's going on I'm actually gonna try to bring a new perspective to the fiscally -- sorry -- this is all these are not economists debating economic theory these are politicians and what these politicians are trying to do is -- each other up.

For the congressional elections in 2014.

-- I can explain.

With the Democrats been trying to do is get the Republicans to agree to raising the rates on.

The upper bracket people.

If they were to do that it would basically eviscerate the Republican brand which is that we do not raise tax rate they don't care what the rate what the level -- yourself but their proposal is to go forward with tax reform which would lower rates for everybody reduced reductions.

That's what Republicans want to run on.

If they agree to tax rates for people around to have increases around 200 carpet -- thousand dollars.

Then the Democrats could say you're no different than anyone else you're just like gossip what you guys stand for.

What John Boehner is trying to do with that million dollar limit is basically take that problem off the table and I think he actually is succeeding with that.

Which is why it's going to be very hard for the Democrats to agree to that million dollar figure but as Rick said after passes even if it does in the house and after that it doesn't seem like it's going.

Very far it's not going to go very far because the other side of it is the spending down and -- sequester in the Democrats is kind of -- it.

Part of the -- fiscal clip that.

Hasn't got as much attention as it deserves.

The Democrats are very much set against reducing spending that is becoming -- and a lot of Republicans in the house are committed.

To cutting spending and this is I think the area where there -- them.

Most trouble agreeing even if they get past some of these tax issues.

Has not been saying united tickets mentioned this a few times -- last however long we've been talking about this if you look at interest rates -- say we bring up at ten year yield just see where it is.

That they're real movement on this the real solution to the problem long term which we all know has to happen.

Will not happen there it is just under one point 8% -- -- that number is a lot higher until there's no.

No other options that they're forced into it by market forces say hey you need to move on this interest rates are skyrocketing can't borrow money for next to nothing and.

And it all race is a question of what is the point of all that's -- yeah exactly and I would say -- -- -- point is to get economic growth in the United States.

Well above 2% it's been around -- for the past three years we need at least three if not more is -- -- that is happening in Washington right now going to contributes not right it's not not at all feel so at this point and he just being realistic about and a lot of small come up what's -- you just make the most of that move on because there's nothing else.

What do you say let's go over the cliff because I would like to see that's -- -- I would take you sequestered yeah like because it would -- the United States can reduce spending for once it's the hardest thing for politicians to do.

If the market saw that the federal government actually was going to reduce spending.

I think would have a not very positive affect your real life consequences of that -- -- or we could.

I don't think -- reduces spending and off there would have been immaterial really material effect on the economy -- Dan thanks Zollars all right thank you conference stuff.

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