Skip to comments.Here's a Hunch: Obama doesn’t want a deal to avoid the fiscal cliff
Posted on 11/18/2012 5:08:01 PM PST by SeekAndFind
Everyone came away from the initial summit meeting between Obama, Boehner and Reid with big smiles and a public air of confidence that Friday's kumbaya moment would lead to The Big Deal. Call me a cynic, but I'm still not buying it. Yesterday, AP touched on a part of this story, tossing out some ideas about how everyone --- particularly Democrats ... might walk away with relatively clean hands if no deal is reached on the fiscal cliff this year. It's all true, but for some of us there's a bit more to the story. The Democrats, for their part, seem to have plenty to gain and not much to lose.
Some Democrats are pushing an unorthodox idea for coping with the "fiscal cliff" Let the government go over, temporarily at least, to give their party more bargaining leverage for changes later on.
The idea has plenty of skeptics, and the White House regards it frostily. But it illustrates the wide range of early negotiating positions being staked out by Republicans and Democrats as lawmakers gathered Tuesday for their first post-election talks on how to avoid the looming package of steep tax hikes and program cuts.
But why would this work for Barack Obama? Because – as we learned the hard way on election day – he can watch the polls with the best of them. And if this train goes off the rails he has reason to believe that he won’t be left holding the bag.
A new poll by Hart Research’s Geoff Garin, conducted for Americans for Tax Fairness a group that wants the Bush-era tax cuts to end for those who earn more than $250,000 found that a majority of voters cited changing the tax system as a key factor in their votes, and that the majority broke for President Barack Obama.
The survey also found that Democrats have changed the landscape on an issue that has eluded them for years taxes. The survey found that most want the Bush-era cuts on top earners to expire, but that Republicans will shoulder blame if all of the Bush cuts, including those on the middle class, expire because a deal can’t be reached.
Basically, this works out to a win-win for Obama. Yes, he could look like the great peacemaker and try to strike some sort of grand bargain with Boehner. And if he did, he would likely get some of what he and the Democratic majority want in exchange for taking a slightly less than maximum raise on taxes for the most wealthy. But why?
If he takes a very hard line and forces the showdown to a collapse in discussions, several potentially positive (for him) results are baked into the cake. He can claim that Republicans refused a “balanced approach” and it’s their fault that everyone’s taxes went up. He then has the Democrats force a vote on a bill to only lower taxes on the middle class and the poor and just dares the GOP to vote against it. (They won’t.) At this point he has the tax / revenue increase he promised without giving up a single thing. Now the negotiations start anew to talk about “spending cuts” but the GOP’s major bargaining chip is gone. Obama gets to put up a far more shallow version of cuts, and if the Republicans don’t like it, they can choose to reject the deal and just let the deficit continue to skyrocket.
What Republican in their right mind could go for this? Perhaps more than we might think.
The Republican Party took the rap for the debt ceiling and is under suspicion for the fiscal cliff. A new Washington Post-Pew Research poll has 53 percent of Americans ready to blame Republicans if America actually goes over the edge and only 29 percent planning to point fingers at President Barack Obama.
Understanding this, thoughtful Republicans are feeling freer to risk the tea partiers wrath and cooperate with Democrats. The teams may disagree on much, but at least theyre now playing in the same ballpark.
How does that work? Fairly simple. Just as I’ve been saying since earlier this year, if you needed congressional action to raise taxes it would never happen. But in this case, to raise tax rates all you need is for Congress to do nothing. And when you need nothing done, there’s no better crack team than Congress. And once the taxes are up, even the GOP reps who have signed the Norquist pledge are free to sign a bill that lowers taxes… even if that doesn’t apply to the wealthy. They get to remain covered on their voting record in their home districts and blame the fallout on the Democrats.
Here’s the part where I reveal my secret strategy of how the GOP can thwart this plan and come out on top.
Hang on… there’s somebody at the door.
A bar chart I saw indicated a larger portion of taxes than cuts. Can those tools in DC ever make real cut in spending?
If the Republicans were smart they’d agree to a deal on the “fiscal cliff” only as part of an overall budget agreement submitted by the White House to Congress for this fiscal year.
Put the onus SQUARE on the White House for this.
I kept refreshing my browser but the writer has not yet come back to finish the article.
Oh well, I think Boehner's got himself stuck between a rock and a hard place.
Obama and his party are preparing for election 2014. Objective = Win control of the House.
That's a shame too. I believe the ONLY reason election 2012 was a no win for republicans was because of VOTER FRAUD. I still think the post 2008 trend would have continued (ie 2010, Wisconsin) in 2014. John Boehner could very well change that trend.
There would probably be less damage to the republican party if Nancy Pelosi had control now. Either way, they're going to get what they want.
I, for one, am getting sick and tired of saying "John Boehner needs to go". We may have to write off any gains in 2014 THANKS to John Boehner.
To avoid blame. If the Republicans don’t manage to avoid blame on this - Oh Boy!
To agree to ANY tax hikes is suicidal, and the GOP-e is no different than the Dem's....they will NOT cut spending in any meaningful way, but will agree that "future cuts" are on the table (more realistically, realistic spending cuts will not happen until we go broke and cannot get anyone to lend more money to the USA, and the Dollar becomes worthless paper).
the first question to ask is,
who wins by doing nothing.
The title of this article says it all. Obama doesn’t want a solution to the “fiscal cliff”. What he really wants is the chaos that results from an economic collapse.
The Republicans need to hang tight and fight tough against any effort to brand them as the cause of an economic collapse. Any tax increases will be hung around their necks like a cursed albatross but no tax increase at this point will save the nation.
The deficit, no matter how much the Democrats try to shift the blame, belongs to BHO2. He brought it on and he alone owns it.
This Republican dominated House of Representatives must continue to try to do the people’s business honorably. If nothing else, it will not be their fault that the economy collapses - this is the Democratic Party’s economy.
BHO2 is following the Cloward-Piven plan to collapse the system, and out of the resulting chaos establish communism. That is why he has armed certain governmental departments.
Get ready for a civil war, folks!
RE: Can those tools in DC ever make real cut in spending?
We don’t even have to cut spending or raise taxes.
There is already a law proposed by then Rep. Connie Mack called the PENNY PLAN. This plan is supported by Senators Rand Paul and Jim DeMint.
H.R. 1848, would cut one-penny-out-of-every dollar actually spent by the federal government from year-to-year for the next six years, from FY 2012-FY 2017. Beginning in FY 2018, there would be a budget cap of 18% of GDP (the average federal revenue as a percentage of GDP over the past 30 years). And by FY 2019 America would finally have a balanced budget that is, assuming revenues naturally increase from the current 14.8% of GDP to 18% of GDP by 2019, after which the budget would be in surplus.
There is an automatic spending cut trigger under Mr. Macks plan one he came up with well before the trigger used in the recently passed national debt ceiling bill. If congress failed to enact a budget implementing the one-percent-actual-spending cut required under Mr. Macks measure, then there would be automatic, across-the-board actual cuts in all federal programs to meet the one percent reduction, and that means all: in defense, Social Security, Medicare, Food Stamps, defense and national security spending, everything.
Mr. Macks plan may seem draconian to some. It would cut the accumulated budget deficits by an estimated $7.5 trillion over ten years more than three times the amount achieved by the debt ceiling deal congress approved last Tuesday.
But it actually has a rather modest impact on reducing our total national debt. It wont be until 8 years from now that the budget will be in balance and the national debt starts getting paid down.
And I guarantee you — No one will starve and Grandma will still get the healthcare she is used to.
RE: the first question to ask is,
who wins by doing nothing.
If Congress and Obama does nothing TAX PAYERS LOSE. The Bush tax cuts EXPIRES in January 2013 and ALL TAXES in ALL TAX BRACKETS GO UP AUTOMATICALLY.
I agree the GOP has screwed this up bad.
By selling out American and siding with foreigners, the GOP picked the wrong side.
Now the GOP is sitting there holding onto minority stakes in a bunch of Chinese companies - and Obama is poised to lead America.
How screwed up is that?
of course. this is the easy way to destroy everyone’s wealth all at once.
I agree. The GOP will be dog meat with its base if they raise taxes and the economy will tank. The GOP should ride this thing right over the cliff and take the heat. They have 2 years to recover from the blame and will be in the drivers seat to force the necessary cuts. I figured out my tax nut at the increased rate and will be thrilled to pay it while I watch all the hypocrites feel the pain.
The author forgets that the Senate will plead for a deal to avoid the cliff. They are beholden to interest groups like defense contractors that won’t like the cuts. The House needs to be on record as agreeable to holding votes on specific legislation while holding firm privately on the key issues (avoiding tax hikes). If the legislation doesn’t come in time, so be it. But my guess is that the Senate will make sure some does and will be willing to give in on some key issues.
Why should the GOP do exactly what the kenyan wants? He wants to drive the bus over the cliff and blame the GOP.
Barry wants all the Bush Tax Cuts to expire so he can ride to the rescue in January with the Obama Tax Cuts plan. He will be free to pick and winners and loses then.
It’s far better for 2014 for the GOP to agree now to the Obama Tax Increase plan on the “rich” and let it crash the economy.
Here’s a Hunch: The private sector is pushed over the fiscal cliff no matter what, it’s the Democrats plan.
Raise taxes, cut the military, cut the deficit. Its win win win for Obama.
Most likely he'll leave our Navy at sea with nowhere to go and no money.
That right there could be a serious error of historic proportions. Think of the US Navy with no funds, and it's dinner time ~ I really don't think tens of thousands of crew members on Aircraft carriers loaded to the gunnals with nukes are going to starve to death just because the President left their hiring agency broke.
That's where the future begins ~ the world's most powerful naval force goes rogue ~ and I really can't predict how that will go down ~ could be rather peaceful.
Many folks imagine the Arabs to have come roaring out of Arabia ripping and snorting and converting by the sword. There was probably some of that, but in the initial military phase they showed up with boxes of gold coin stored up in Petra and bought Byzantine armies and navies ~ they had not been paid in nearly a century!
So, who buys the American navy ~ will it be the wealthy Arab oil sheikhs, or the Chinese? And if the Chinese will it be the Big China Chinese or the Overseas Chinese?.
I'm sure Goobama hasn't thought this through very well ~
if this drags into next year,
any tax cuts could be made retroactive
to Jan 1st, or any other date,
thus lowering the urgency of immediate action.
Dopey GOP will get and take the blame.
“My Mama done tole me
To bring back a rabbit”.
Well, we do know that one of his goals is to raise taxes; so, why would he not want to go over the cliff. He gets what he wants (higher taxes), and he doesn't have to do anything. As a bonus, he gets to blame the Republicans for not accepting his plan for "taxes on the wealthy".
It's a two-fer for him.
Who didn’t know this? Collapse is the goal, and voters mostly liked the idea. The literate ones anyway.
“If the Republicans were smart”...... they would not have been doumb enough to stick with the position of protecting tax rates for the rich and stuck with talking about repairing the economy with something besides Trickle Down.
Used to call them GOPe, now a better will be GOPd (for dummy).
Now the only way they can go is to refuse to go along and refuse to do any more Continuing Resolutions on that old tired budget from 2008. Even if the dems are able to mud the GOP with some of this, in two years the whole world can change and the sheeple will have forgotten 2012 Fiscal Cliff.
All spending bills originate in the House. Send them the Penny plan or the Ryan budget, and be done til the other side responds. Let Reid and 0bama submit their own plan, something to reconcile.
There will be nothing and 0bama will veto the only plan. And the Fiscal Cliff happens.
What else can Boehner do? At this point, Boehner is negotiating with himself.
His goal is to convert the U.S. to Euro-style world socialism under control of unelected "masters" at the U.N. The only way he can "solve" the financial crisis he created is to increase taxes tremendously and starve the military. I'm now convinced the Republicans in Congress don't have the brains or the will to stop him. They'll just reshuffle the deck and declare a new game.
I hate to say it, I think there was fraud, but I also believe Christians did not want to vote for a Mormon, it’s a shame, but I believe it to be true, too many missing voters this time, they just didn’t show up.
They’re dead ~ islame ~ dead. People who voted in 2008 for McCain showed up to vote for Romney but a fair percent of them were dead!
Gains? Are you serious? Now the rats know they can steal in broad daylight without even a whimper the only seats the GOP will take will be what they are allowed.
Exactly! It's over folks. Time to get behind the Allen Wests of the country or don't bother to raise anymore money for the party. Fool us once shame on us, fool us twice and they'd be facing charges (if they were a business and not a political party).
25% of the evangelical vote went to Obama. If they have no problem voting for a Muslim they'd have no problem voting for a Mormon.
Obviously Romney did not get specific enough to win over the Christian votes (if what you say is true). I got my stats from an evangelical TV program who was quoting World Net Daily.
One percent cuts in the face of base line budget increases is far more radical than it looks on its face. I like it, but I doubt that it will move forward without a crisis. Like a bond rating downgrade or three.
Obama will get his tax increase while not giving up a single penny in spending even thought he says he will. AND, the media will carry his water on this issue. Republicans need to call Obama’s bluff, challenge the media to report the facts and face the inevitable cliff - we have already gone over it - and make Obama eat it.
If they're tired enough, they'll up and deal - and then let themselves be primaried off to the old pasture.
Republicans are terrified. So they took the House just to give in on Obama’s demands because they are scared they will get the blame for a bad Obama economy?
I never thought that Republicans (apparent) position that no one no matter how rich they are can have to pay another dime in taxes or the economy ‘Falls off a cliff’. But now they have made this their #1 rule and they are finding it is not going well.
So here we are. GWB was POTUS for eight years and he got the blame for the bad economy in his second term but if the economy goes bad under POTUS O then the Republican House gets the blame instead. Obama is the man of plastic. He gets the blame for nothing.
Bohners idea of playing this poker game is to say ‘I cant get my members to vote for...”
If Bohner caves and taxes go up on the rich and the economy doesn't tank as Republicans spent 4 years claiming it would then no one will ever believe them again. Now if they do go up because Republicans give in (which will probably happen) and the economy tanks then Rs better figure out a way to disown their involvement in it or it wont be useful to them.
Federal taxes are <16% of GDP. Haven't been that low since 1950. Under Reagan the tax bite averaged 18.2% of GDP (17.3% was the lowest in any single year).
There won't be any real cut in spending until the welfare programs (SS and medicare/medicaid) are reformed. I see zero chance of that happening with baby boomers poised to retire with next to no savings. Housing market looks poised to take another leg down with FHA delinquencies on the rise, so consider that 'nest egg' too rotten to eat.
Save, save, save. And protect those savings in unleveraged assets, not dollars or homes.
Why would he want a deal? He and his government get much more tax dollars by letting it all expire and they can blame it on the Republicans.
Very simple solution here. Let the automatic spending cuts expire without doing anything. and forget about entitlements for now. Why give that to Obama?
So lets say Rs give in under pressure the tax increases on the rich after holding out a bit and making a fuss about it , and then the automatic spending cuts go into effect too.
Will that be enough to put the country back into recession? If so (and I don't know if it is) then what will Obama’s big win on tax increases buy Dems? What will be the lesson for the country? What will Republicans make it?
"See we tried to warn you" ?
Duh, the Fiscal Cliff was Obama’s idea! Of course he does not want to solve it!
All taxes, only cuts to Defense=GOP ‘compromise’
” Republicans are terrified.”
ALWAYS....every day, on every issue.
1) Why we lost the election
2) Why we lose on everything else.
” Very simple solution here. Let the automatic spending cuts expire without doing anything. and forget about entitlements for now. Why give that to Obama?”
Maybe what we need to offer is one stop amnesty centers where they can pick up their green cards, sign up for food stamps and Obama-care, register their kids for school or free college, apply for citizenship and register to vote. All in Spanish with Spanish-English interpreters (for those who cant read Spanish either)
I bet Republicans could out-Santa Obama! Then they will vote for 'tax cuts for the rich'
You see any flaws in this plan?
WRT "fiscal cliff negotiations," the GOP can cave on tax cuts in exchange for spending cuts that won't happen, and then Charlie Brown will say that Lucy moved the football they would have kicked beautifully if Dems had not played that dirty trick.
WRT amnesty, they don't even need Lucy to move the football. The GOP (including those brilliant GOP advisers on TV and radio) will happily promise to "secure the border, never do it again, get Hispanic votes," etc., with a straight face.
Paul Krugman: “Raise top tax rate to 91%”
” Yet in the 1950s incomes in the top bracket faced a marginal tax rate of 91, thats right, 91 percent, “
Bare-faced LIE. Back then, you could deduct everything except AIR!