Analysis: Obama could risk going over 'cliff'

It may be just a bluff or a bargaining ploy, but the White House is signaling that President Barack Obama is willing to let the country go over the "fiscal cliff," a hard-line negotiating strategy aimed at winning concessions from Republicans on taxes.
Associated Press
Dec 5, 2012

If Washington really does fail to avert the looming series of tax hikes and spending cuts, the White House will portray Republicans as the culprits for insisting on protecting tax cuts for the wealthy, an effort the administration is laying the groundwork for now.

"This is a choice of the Republican Party," said Dan Pfeiffer, White House communications director. "If they are willing to do higher rates on the wealthy, there's a lot we can talk about. And if they are not, then they'll push us over the cliff."

But going over the cliff also would be full of risk for a president fresh off re-election and facing at least two more years of divided government.

Ending the year without a deal could roil financial markets and dent consumer confidence just as the economy is strengthening. It could make it harder for Obama to get Republican help on his second-term priorities like overhauling the immigration system and the nation's tax code, or in getting potential Cabinet replacements confirmed.

And it would signal to the country that the president's campaign prediction that the GOP "fever" would break following his re-election was a pipe dream.

House Speaker John Boehner says Obama is playing a risky game. "If the president really wants to avoid sending the economy over the fiscal cliff, he has done nothing to demonstrate it," the speaker said.

White House advisers say the president wants to avoid going into next year without a tax and spending deal, a scenario they say would hurt the economy. Obama, addressing business leaders Wednesday, said the White House and Republicans could reach an agreement "in about a week" if the GOP drops its opposition to raising taxes on families making more than $250,000 a year.

"If we can get the leadership on the Republican side to take that framework, to acknowledge that reality, than the numbers actually aren't that far apart," Obama said.

But with few public signs that Republicans are close to taking that step, administration officials are hardening their warning that Obama willing to risk going over the cliff.

Of course, the White House warning could be a bluff, offered in the belief that Republicans are unlikely to back down on taxes unless they believe Obama is willing to go over the cliff.

The White House says Obama's firm stand on tax rate increases for the wealthiest 2 percent of Americans is driven by economics. The debt-saddled country can't afford to continue with the George W. Bush-era tax cuts, the president and his advisers argue.

Obama has made that case to Republicans before only to back down in the final stages of negotiations. But this time around, the president and his team believe they hold the political leverage.

There is some evidence to bolster that notion. Taxes were a centerpiece of the presidential campaign, with Obama running on a pledge to end the Bush tax cuts for the wealthiest Americans and return their rates to where they were in the 1990s, when the economy was thriving.

Exit polls showed that 60 percent of voters supported that position, an even higher percentage than backed Obama's re-election.

A new poll also suggests a majority of Americans would blame Republicans if the government goes over the fiscal cliff. Just 27 percent of those surveyed said they would blame Obama, compared with 53 percent who said they would point the finger at the GOP, according to the Washington Post-Pew Research Center Poll.

Seeking to cement those impressions, the White House is casting Republicans as willing to forgo tax cuts for the middle class in order to protect lower rates for wealthier Americans. Rates for all income earners will go up at the end of the year if both sides can't reach a deal.

In turn, Republicans say Obama is acting like a stubborn partisan who will put the economy in peril in order to get his way.

"My sense is the White House wants to go over the cliff," said Tony Fratto, a former Treasury and White House official under President George W. Bush. "That may be the only way they get rates they want."

Going over the cliff could mark a new low in the relationship between the president and congressional Republicans. While the contentious debates earlier in Obama's first term over funding the government and raising the nation's borrowing limit went right up to the edge, both sides were always able to reach a deal.

As Obama ran for re-election, he sought to assure voters weary of Washington's bickering that things would be better if he won a second term.

Speaking to supporters in June, he said, "I believe that if we're successful in this election — when we're successful in this election — that the fever may break."

"My hope, my expectation, is that after the election, now that it turns out that the goal of beating Obama doesn't make much sense because I'm not running again, that we can start getting some cooperation again," he added optimistically.

(This is an AP News analysis.)

Comments

the office cat

Point?

the office cat

donut... finally someone understands.

Contango

@ 2cents:

As I've written many times: Public union employee pension trusts like giants Calpers and Calstrs invest billions of dollars with hedge funds, private equity and directly overseas.

Where's the outcry?

http://www.calpers.ca.gov/eip-do...

http://www.calpers.ca.gov/index....

http://www.calpers.ca.gov/index....

2cents

C, your links are not working?

Contango

@ 2cents:

Working on my end. Start with the search?

http://www.google.com/search?sou...

2cents

Right click then open works.

The Big Dog's back

So what?

the office cat

Point?

KURTje

Moderators have removed this comment because it contained Personal attacks (including: name calling, presumption of guilt or guilt by association, insensitivity, or picking fights).

verdict

Moderators have removed this comment because it contained Personal information and Libel and defamation.

The Big Dog's back

Why didn't you elect Ron Paul in 2000? or 2004?

the office cat

good question...

Randy_Marsh

We libertarians were out voted by frick, Now that Frack is in office they seem to think they are better. The joke here is the dems think they elected a god when even the republicans didnt worship bush.

the office cat

Republicans still are worshiping at the St. Ron shrine. Notice no retired Republican presidents were at the Convention or utilized in the campaign?

goofus

point?

mikel

not more than 20 minutes ago i was in the grocery store. the girl in front of me buys an ice cream pie and 2 snickers candy bars with her ohio directions card.

as long as that can continue to happen i hope that the gop never agrees to any deal with the man who occupies the white house!

The Big Dog's back

Are you really that jealous?

tk

No ice cream or candy for the poor?

the office cat

"Let them eat cake."

mikel

not on taxpayer money. you see, then the fat slobs will start having health problems that the taxpayer will have to pay for.

the office cat

What was in your basket?

goofus

point?

mikel

milk, that i paid for with MY money that I EARNED.

2cents

I bought ice cream 30 min ago. They never take their EBT receipts so I started collecting them from the machines to write off as overhaed :)

the office cat

So Republican Fraud is okay?

2cents

LOL, where is the real fraud?

https://www.youtube.com/watch?v=...

jon491

Everyone should watch THIS!

the office cat

Meeeowwwwwrrr!
This is better than catnip!

Randy_Marsh

Office cat
Of course it is to a Obama supporter, They seem to love dividing people, Running up debts, Blaming everyone but themselves and praying to a man made god. Just think, The tax rates will rise and you will have to pay for once. When it happends we will know who to blame.

the office cat

Oh! Oh! Throw me more!!! You need to read your posts! I'm not dividing anyone. I'm not predicting doom and gloom. We are suggesting greater equality in access to the American Dream. You don't hear us talking about our gold and our invetments and our reluctance to pay a bit more for all our bounty.

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