With the House Republican leadership sticking to its plans to push through a Plan B tax and spending bill today, it’s an open question as to whether House Speaker John Boehner is really bluffing about his proposal as the party’s final answer to the White House in the fiscal cliff negotiations. Considering that there is no chance that the Democrats will allow the GOP plan to pass in the Senate and that reportedly even the staffs of the two sides are not talking, right now it is entirely possible that the standoff will result in there being no deal in place prior to the Christmas holiday next week. Or is it?
There are many observers in Washington and around the nation who are convinced that Plan B is merely an elaborate bluff designed to smoke more concessions out of an administration that for all of the president’s bluster is as desperate to avoid the ruinous tax increases and spending cuts that a failure to make a deal will bring as any Republican. But considering the enormous difficulty that Boehner is having in lining up the 218 votes from his own caucus that he will need to pass his legislation, imagining him going back to Republicans in the next couple of weeks to ask for their support for what is certain to be an even more unpalatable compromise deal seems a stretch. That means that it is entirely possible that Boehner and Majority Leader Eric Cantor mean what they say about putting off any further efforts to resolve the crisis until January. In other words, like it or not, both parties may actually be heading over the fiscal cliff with Plan B.
All along it has been President Obama rather than Boehner who has sounded like the side most ready to go to the brink. With polls showing the public blaming Republicans for the impasse and a second term already won, the president appeared to believe that he had the whip hand in any negotiation. Indeed, up until the last week when he offered to raise taxes only on those making more than $400,000 rather than $250,000, Obama had showed no sign of being willing to budge. After that, most pundits assumed that there would be further movement from both sides that would create a deal that would be somewhere between $400,000 and the $1 million income mark that Boehner has offered. But if the speaker had come to believe that there would be no more concessions from a president who thought he could bludgeon his opponents by further grandstanding and delegitimization of their position, then perhaps he came to the conclusion that it was time for him to shut down the talks and make the White House sweat.
Republicans are aware that they will be blamed in the short term for allowing an across-the-board tax increase and the impact this will have on the economy. But they also understand that any hopes for a successful second term for the president hinge on a deal that might boost the chances of a genuine recovery for the nation rather than the anemic revival it has experienced under Obama. This may be emboldening Boehner to think that it is he, and not the man who was just re-elected president, who is in control of the talks.
In doing so, Boehner may have put the ball back into the Democrats’ court. But it’s not easy to see how the GOP leadership team will sell a deal in which the president came closer to their position if they’re having such a hard time putting across Plan B.
If the end result of all this maneuvering is that no deal will be reached, it must be said that this is a disaster for the country. Allowing taxes to rise for all taxpayers is not just wrong (indeed, Republican hardliners are right when they say that any increase on anyone, no matter how rich, isn’t going to help the economy or do much to balance the budget), it will harm the nation’s economic health. The defense cuts that will result from such a failure will also be ruinous for national security. But Boehner may be counting on President Obama being more fearful of this than a Republican Party that may think it has nothing left to lose after their November defeat. Unless the president jumps first in the next couple of days in this game of chicken the two are playing, the fiscal cliff doomsday scenario may come to pass.
It makes some sense to all join hands and go over this "fiscal cliff" together. Taxing "the rich" (possibly to even extortionate levels not currently on the table) is not going to put more than a dent in the deficit…it's political catnip for the simple minded but, by itself, is futile. n nBesides, FAIRNESS requires that all contribute…especially ALL those who benefited from the "Bush" tax changes. So let the rates go back to where they were for everyone. Let all those tax "credits" that result in refunds (to people who never even paid federal income tax) expire. Restore the FICA payroll taxes which are endangering solvency of the Social Security trust funds. End the Unemployment Comp that never ends and encourages people to remain unemployed or work under the table. n nSince BALANCE is the other mantra de jour, if they can't agree on other equivalent spending cuts, let the sequestration go forward. It's a meat axe approach but better than nothing in cutting spending. The Congress can just refuse to spend any proceeds from the tax increases which can then flow automatically to debt reduction rather than increased government spending.
If Boehner passes anything in the House, it takes it out of Obama's hands — because any bill can be changed, every single word, in the Senate by Reid and sent back to the House to resolve the differences. I don't expect Reid to do so — at first — but as a piece of paper he can write what he wants on just sits there, he might choose to do so. If not, I think something will be done in retrospect in January. Right now, today, and for a few days, everyone is maneuvering to get the other side blamed (in fact, I truly believe Obama wants that more than anything, since he's only a community organizer all the way down to the bone).