There was a brief burst of optimism after Barack Obama’s reelection that Democrats and Republicans would finally go the grownup route and avert the so-called fiscal cliff.
Hopes brightened again when John Boehner moved off his no-new-taxes-ever stance, agreeing to boost rates on millionaires, and Obama raised the income threshold on those who would be affected to $400,000 from $250,000. At last it seemed that rationality would prevail in Washington.
Instead, we have Harry Reid accusing John Boehner of running a “dictatorship” and the House speaker shooting back that the Democratic majority leader “should talk less and legislate more.”
Welcome back to Washington, the country’s biggest day-care center.
The capital’s politicians seem wedded to acting in their own self-interest, rather than the national interest, even as we barrel toward a fiscal train wreck.
The pundits have long overestimated the willingness of the two sides to get something done, which is why the country is three days from sliding off the much-ballyhooed cliff. As an added bonus, Treasury Secretary Tim Geithner now says the government will bump up against its debt ceiling as well on Dec. 31—an oddly timed announcement that seemed designed to ratchet up pressure on the GOP.
So America is facing deep spending cuts, a big tax hike for everyone, the expiration of extended unemployment insurance, and, just possibly, the specter of a government default for the second time in 17 months. Happy New Year.
Even with Obama having cut short his Hawaii vacation to return to the White House, the chances of a last-minute, kick-the-can deal still appear slim, if only because the minutes are ticking down. The president’s decision to summon congressional leaders to a meeting Friday doesn’t much change that.
So why are we in this mess? Remember when the late, unlamented supercommittee came up with a poison pill deemed so harsh that Washington would have to find a way to avoid swallowing it by the end of 2012?
For starters, the Republicans are utterly disorganized. Boehner doesn’t have the backing of his caucus, at least on fiscal matters. It’s awfully hard for the administration to strike a deal with a leader who has few followers.
Were it up to Boehner, a throwback to the country-club Republican era, he would have struck a semi-grand bargain with the president by now. For the Ohio congressman to agree to hike taxes on those earning more than a million bucks—a level once proposed by Chuck Schumer—was a milestone.
Yes, Boehner was demanding more spending cuts, but the two sides seemed to be approaching split-the-difference territory.
But Boehner couldn’t close the gap because he is saddled with a large Tea Party faction that detests compromise and has a near-religious fervor against raising taxes. This became painfully apparent when the speaker couldn’t even round up enough support to vote on his own Plan B. That plan never made much sense, because he was asking his members to commit symbolic suicide: going on record as supporting tax increases for a bill that had no chance of passing the Senate.
America is facing deep spending cuts, a big tax hike for everyone, the expiration of extended unemployment insurance and, just possibly, the specter of a government default for the second time in 17 months.
The president, too, bears some responsibility here. While he campaigned on raising taxes on the rich, and therefore can claim a mandate on that front, he made no serious effort to reach a compromise on spending cuts. Under pressure from his left flank, Obama resisted getting specific about cutting the budget, especially Medicare, knowing full well that Boehner needed such cuts for political cover.
For Obama, going over the cliff was never such a terrible outcome. For once he had the upper hand; once taxes go up on everyone, the Republicans will be under even greater pressure to capitulate in January and accept his tax hike for the wealthy to spare the other 98 percent.
On a purely political level, Obama is winning. In the latest Gallup poll, 54 percent of those surveyed approve of his handling of the cliff talks. That’s compared to 34 percent for Reid and an abysmal 26 percent for Boehner.
On the other hand, 68 percent said they want to see their leaders compromise on principles and beliefs to get a deal by Jan. 1.
The White House could be playing with fire here. A few weeks of tax hikes, if reversed by Congress next month, isn’t going to tank the economy.
But you never know how the markets will react, especially with Geithner’s new warning about breaching the debt ceiling.
That’s a risk that country seems about to take. The message from inside the Beltway: see you on the other side of the cliff.