What happened? Thirty-six hours ago, a fiscal cliff deal had seemed within reach. President Obama was inching toward the Republicans, offering a plan to shield those making less than $400,000 from higher marginal tax rates and suggesting entitlement cuts that were angering the progressive base. Surely, a deal would be completed soon.
And then this afternoon, a quick series of events put harried fiscal-cliff watchers into full panic mode.
House Speaker John Boehner convened one of the shortest press conferences in recent memory. Boehner uttered a 115-word statement, in which he told President Obama to support the House GOP’s Plan B—a proposal to shield everybody making under $1 million in income from higher taxes, with no spending cuts—or to forget it. Like an angry rap artist, he then dropped the mic and stormed off stage. (He’s got 99 problems, but a cliff ain’t one?) As Ben White of Politico, an obsessive fiscal-cliff follower, noted: “This is by far the strangest moment in the #fiscalcliff saga.”
As if on cue, the stock market, which had been placidly treading water for most of the day, partly on expectations that a deal was imminent, fell out of bed. Stocks closed the day down more than 1 percent.
Meanwhile, the VIX index—which is a proxy for how much investors are freaked out at any given moment—spiked by 11 percent. Once again, investors faced the prospect of markets roiled by ultimate and maximalist demands.
And suddenly, the Twitterverse was filled with fatalistic, pessimistic talk of going over the cliff—including some from people who just 36 hours ago were either convinced (or terrified) of the prospect of a deal between Obama and Boehner:
The upshot: it could be the last bit of loud posturing before a Republican capitulation. Or it could represent a true impasse. One thing is guaranteed: the fiscal cliff hostage situation will continue for at least a few more days.