If Speaker of the House John Boehner is concerned about the fiscal cliff, then he is concerned about something the government has already accepted. That compromise was made in 2011. That fight does not have to be fought again.
The Republicans will face the prospect of a recession in 2013, but it will be a bipartisan recession. The Democrats voted for this solution, and Obama accepted it. The Republicans can point to the Democrats and blame them if there is criticism of the Republicans for not doing anything to change the tax code. It will be very difficult for Democrats to blame the Republicans for intransigence, when the changes in the tax code that will automatically begin on January 1 were already voted on by Democrats.
The Democrats want to maintain the existing level of federal spending. They want to do this by extracting more wealth from the rich. There’s nothing new here. It is business as usual for Democrats. The Republicans’ resistance to the suggestion is also business as usual.
Nothing that the Congress can do is going to solve the problem of the unfunded liabilities of Medicare, Social Security, and Medicaid. It is all kabuki theater. The on-budget deficit of $1 trillion is a bad joke. The real deficit is at least 11 times larger. There is no way to solve the problem of the unfunded liabilities of the federal government, other than by some form of default. Somebody’s goose is going to get cooked. Politically, it is not clear whose goose will be cooked, but somebody’s surely will be.
So, from this time on, Republicans will blame every downturn in the economy on Obama. There will be no way, from this point on, for Obama to point the finger at Bush. If the Bush tax cuts automatically go out of existence on January 1, we will revert back to the Clinton tax program.
At that point, Obama becomes a gigantic donkey, and the Republicans’ political task will be to pin the tail of recession on Obama. He will not be able to spend the next four years complaining that it is all Bush’s fault. Once the Bush tax cuts go out of existence, the resulting recession will be all Obama’s fault. He knows it, the Republicans in Washington know it, and the Democrats in the Senate know it.
This is why Obama is not in a good bargaining position. For the next two years, and possibly four years, he will not be in a good bargaining position. The Republicans hold the hammer. All they have to do is nothing; and whatever happens, at least if it’s bad, they will get to blame on Obama and the Democrats. When the Bush tax cuts lapse, we move back into Clinton territory.
If Boehner plays his cards right, he will be in the catbird seat. “Don’t blame us.” The Democrats have control of the Senate. The Democrats have control of the White House. The tax policies were invented by Clinton. The Republicans fought the tax increases that Clinton imposed on them. So, there is no way for the Democrats to get out of the line of fire. They are going to have to grin and bear it.
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