Commentary Magazine


Must GOP Bow to Obama’s Fiscal Demands?

With the president’s election victory still fresh in their minds, Democrats are assuming that Tuesday’s results mean that Congressional Republicans are bound to bow to their demands for tax increases. Such sentiments are understandable given the Democrats’ clear victory in the presidential contest as well as their gains in Congress. Having campaigned on a platform of raising taxes on the wealthy, there may be little reason to assume President Obama is going to back down on his demands and, as many liberals have already pointed out, he’s going to be bitterly criticized if he does compromise on his soak-the-rich approach. Yet though Republicans may still be shell shocked by the election returns, there is no reason for them to cave in on their principles just because the president and his media cheering section expect them to.

House Speaker John Boehner sounded an appropriate note, albeit one that was pure political boilerplate, when he said yesterday, “Mr. President, this is your moment. We’re ready to be led — not as Democrats or Republicans, but as Americans. We want you to lead, not as a liberal or a conservative, but as president of the United States of America.” But his airy rhetoric contains a kernel of truth. If the country is to avoid going over the fiscal cliff in the next month, and avoid the terrible consequences that would result from a failure to reach a budget deal, it is going to require the kind of presidential leadership and ability to compromise that Obama has never been willing to provide in his first four years in office. The question before the country is not so much the one that liberals have been asking about Republicans simply waving the white flag as it is whether the president can actually bargain in good faith and get a deal.

Ever since last year’s debt ceiling crisis that set in motion the events that could lead to an automatic tax increase and sequestration of funds that would require massive across-the-board budget cuts for vital services and national defense, both the president and his antagonists have acted as if they had nothing to lose by going to the brink. In particular, the president’s strategy has seemed to revolve around an effort to drive the GOP leaders in the House away from a deal so as to be able to use their refusal to bow to his dictates as a political talking point. Obama’s model was the 1995 government shutdown in which President Clinton managed to outmaneuver then House Speaker Newt Gingrich into a corner and make him take the blame for the problem.

Boehner and Majority Leader Eric Cantor managed to avoid being fitted for the Gingrich clown suits but no deal was ever struck that they — or their caucus — could live with. But most observers seem to think that after the president’s re-election they have no choice but to give in on the extension of the Bush tax cuts. Congress’s reputation is in tatters and it stands to reason that the GOP would prefer to avoid not only the catastrophic cuts and taxes that a failure to make a deal would entail but the blame for the economic distress that would ensue.

However, the House Republicans aren’t the only ones feeling some pressure.

Most Democrats may be strutting this week and engaging in triumphalist rhetoric about their ability to dominate the country’s politics for the foreseeable future. But the president understands that a budget standoff could trigger an economic downturn that could cripple the start of his second term and set in motion a train of events that will make the next four years a nightmare for the country and for him. Though Republicans don’t want to be the scapegoats for a budget meltdown, the president needs a deal far more than they do.

But in order to get one, the president is going to have to eschew the sort of high-handed approach to Congress that has been the pattern for his first term. While that worked politically for him, it also served to give Boehner less room to negotiate since the president infuriated the GOP caucus and helped make it easier for them to dig in their heels and oppose a compromise. If the president wants Boehner to give him a deal, that will mean sitting down and asking for more revenue in ways that the GOP can live with–such as closing loopholes and deductions, but not confiscatory tax policies that will cripple economic growth.

For two years, President Obama has refused to take this deal, since it was in his political interest to portray Boehner and the GOP Congress as extremists. But though his supporters don’t seem to realize it, his political interests now lie in a policy that requires him to avoid the class warfare rhetoric and tactics designed to demonize Republicans he has employed in past negotiations.

The president needs to negotiate and take the deal Boehner is offering him with modifications that will allow him to save face. Doing so is good for the country and for his prospects for a second term that isn’t as awful as those of most of his predecessors.

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