With the deadline for the fiscal cliff talks just two days away, President Obama took to Meet the Press on Sunday to reiterate his view that average Americans will blame the GOP if we end up going over the cliff. Simultaneously, top Republicans are admitting that they have lost the battle on taxes and are focusing on reaching a deal.
The president stated that after a certain point, “if folks can’t say ‘yes’ to good offers, then I also have an obligation to the American people to make sure that the entire burden of deficit reduction doesn’t fall on seniors who are relying on Medicare.”
He warned that Republicans were putting the economic recovery at risk, and that if “we haven't seen the kind of deficit reduction that we could have had had the Republicans been willing to take the deal that I gave them, if they say that people's taxes have gone up, which means consumer spending is going to be depressed,” then Americans will blame Republicans.
Continuing, Obama was clear on his stance that any deficit reduction package has to remain a mixture of tax increases on the very wealthy and moderate reductions in cuts. He noted that “the offers I’ve made [to the GOP] have been so fair that a lot of Democrats get mad at me … I offered to make some significant changes to our entitlement programs,” while “the way [Republicans are] behaving is that their only priority is making sure that tax breaks for the wealthiest Americans are protected."
Ending the Bush tax breaks for the wealthiest Americans is extremely popular and could raise nearly $950 billion over ten years, according to the. Americans support ending tax cuts for those making over $250,000 by a 46% to 35% plurality. Raise that cutoff point higher, to Obama’s counter-offer of $400,000, and that increases to a landslide 52% to 31% support.
If the Senate is unable to construct a deal which is able to pass Congress, then the White House will go to its own backup plan, relying on Senate Majority Leader Harry Reid (D-Nev.) to introduce a bill extending tax cuts on all Americans except those making more than $250,000 on Monday morning, hours before the deadline. The president appears to have calculated that most Republicans will be unwilling to stall that package, lest they do significant political damage to themselves.
While the president was reluctant to state with any certainty that a deal would happen in time to avert automatic cuts, Senator Lindsey Graham (R-S.C.) was already doing damage control for such an agreement in friendly territory. Speaking to the Republican base on Fox News Sunday, he said chances of a deal in the next 48 hours were “exceedingly good” and admitted that Obama had won. Graham also began to reposition Republicans for a subsequent fight on the debt ceiling. “This deal won’t affect our debt situation, it will be a political victory for the president and I hope we’ll have the courage of our convictions when it comes time to raise the debt ceiling to fight for what we believe as Republicans, but hats off to the president, he won,” Graham said.
Graham’s concession is a clear sign that, at least for the traditional Beltway insider wing of the party, the fight is over. They will play ball. Whether or not they can corral the votes for such a deal is another story entirely, and one which may have serious ramifications upon the House leadership. After a series of debacles Thursday’s disastrous cancellation of the Plan B vote, Boehner’s speakership hangs in the balance. Without a deal, polling shows Americans are exceptionally likely to blame Republicans for the ensuing chaos. Twenty-seven percent of Americans blame Republicans in Congress if we go over the cliff, opposed to 16% who blame Obama and a mere 6% who blame Congressional Democrats, according to a recent Reuters/Ipsos poll on Thursday.
The country now faces two possibilities, both of which benefit Obama. The first is that we get a balanced deal, with somewhat less in spending reductions than desired by Republicans, but with serious reductions to entitlement and defense spending. Quibble over the details all you want, but the packages under consideration are closer to Obama’s proposal than anything the GOP desires. Blame that on Plan B.
The second is that Republicans remain recalcitrant, and we go over the cliff. The new Congress, as well as the various White House agencies, have various tricks to forestall the impacts of the immediate spending cuts: The cliff will not be a plunge so much as a slow-motion train wreck, hitting some households (such as those that rely on unemployment insurance extensions) hard beginning in early February and peaking next year when Americans pay their 2013 tax bills. The double contraction of middle-income tax hikes and spending cuts could stall growth and begin another recession. That scenario is bad for the country, but even worse for Republicans, who will be blamed for putting political grandstanding above doing their jobs for not reaching a deal with the White House. And in any scenario in which we go off the cliff, the worst will likely be tempered by successive deals and short-term fixes before Congress agrees on a new deficit-reduction package by February, by which time the GOP will have already taken a significant hit to their reputation.
Hats off to the president, indeed. No matter which way this goes, the president has just scored a major political victory and embarrassed the GOP. Will this set the stage for the country’s outlook to improve in 2013?