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

Randy_Marsh

Office cat
Really? I agree you do not talk about gold and investments and not wanting to pay taxes. You call people racist, Teabaggers, fascist ect ect. Despise the rich as you say "Make them pay but keep my taxes the same" and hold everyone who disagrees with you as a enemy of the state that your god should be allowed to kill. If thats no division i do not know what is.

the office cat

Wow! Take a coupla days to move the gold, make the donations, plan the celebrations and look what happens.
1. Yeah. I'll call out a racist whenever I read one. But race is not only about color.
2. When one spouts Tea Party philosophies and call themselves Patriots (which the originals never called themselves) I merely point it out. And even though 'teabagger' ruined a perfectly good word, it's very appropriate - especially when they tell people who disagree that the First Amendment does not extend to them.
3. Check the definition of 'fascist'.
4. I don't despise the rich. God knows we need them. But I don't believe that my effective tax rate should be half that of the 98%.
5. And that last comment about "your God should be allowed to kill" is slander with malice and if the Moderator doesn't remove it I will take the action necessary. (And I CAN afford the battle).

Randy_Marsh

fas·cism
[fash-iz-uh m] Show IPA

noun
1.
( sometimes initial capital letter ) a governmental system led by a dictator having complete power, forcibly suppressing opposition and criticism, regimenting all industry, commerce, etc., and emphasizing an aggressive nationalism and often racism.

2.
( sometimes initial capital letter ) the philosophy, principles, or methods of fascism.

3.
( initial capital letter ) a fascist movement, especially the one established by Mussolini in Italy 1922–43.
Who wants to circumvent the constitution and checks and balances to create a all powerful dictator with no rules and a huge centralized government? Cheer on sheep, You are creating the exact thing you rally against. So are you going to forcibly oppresse differenting opinions now? Read the definition.

goofus

.

the office cat

POINT.

coasterfan

Many Republicans are living in a fantasy world in which they can ignore all evidence that their economic ideas don't help the economy, and don't help anyone except the ultra-rich. They ignore the fact that their party lost the election, and somehow think that their minority viewpoint should trump that of the majority. Each day, a few more GOP congressmen defect, yet the local yokels still rant as if their party is holding all the trump cards. Amazing...

2cents

Not a huge gap Coaster, like many like to beleive!

http://en.wikipedia.org/wiki/Uni...

The Big Dog's back

It was a blowout victory for Obama cents.

goofus

We the people of this great country pride ourselves in our compassion. Those people that weren't getting Obozo gifts merely gave O a second chance due to the inherent compassion we all have. In baseball you get three strikes and in california felons get three chances so why shouldn't the felon in the white house get at least one more chance judging by the recent election!!!!!

shucks

@goofus

That was a goofy post.

"We the people of this great country pride ourselves in our compassion"...(Not the GOP or the wealthy).

"Those people that weren't getting Obozo gifts merely gave O a second chance due to the inherent compassion we all have"...Really? The 2%ers and the wealthy voted Obama in? (ridiculous)

"felon in the white house "...(You dont know squat)

goofus

Deary me, sad so very sad, imagine a free thinking human being who has shunned a group of people as having no compassion without any ascertainable proof. If 4 shizzle says it, it has to be true. Wasn't it a republican president who has done more for the progress of halting aids. Just this past aids day he was remembered as the american president that has done more for the poor in africa than any other!!!!!
His name was G.W. Bush.
Felon on my part was a little harsh, one has to be convicted first and his day might come, but he is a lawyer!!!

shucks

mr. goofus

Are you new to this planet?

goofus

Sad response, so very sad. Brainwashed in liberalism and reared in the shallow end of the gene pool.

shucks

gee that hurt. NOT!

goofus

Sorry, wasn't meant to hurt, just illuminate to the other readers your true personality.

shucks

You're not sorry, it didn't hurt (pity you to think so) and Im sure the other readers have you figured out also.

Later Goofus

the office cat

Ah goofus: "felon...one has to be convicted first..."
I'm assuming you refer to the likes of Cheney and your beloved GW Bush who cannot leave the country because they are convicted felons to be arrested on sight.
Well, if our Democrat president tried to help the poor in Africa it would be 'proof' of his Kenyan Muslim heritage.
What kind of ascertainable would you like? GOP defeat or filibuster of VAWA, Equal Pay, extended unemployment benefits, AIDS research, breast cancer early detection... how many more? And there was that vow to 'make this a one-term president'...

Contango

"Obama’s Tax Increases Will Find the Middle Class":

http://www.bloomberg.com/news/20...

"You must love Big Brother. It is not enough to obey him, you must love him." - "Nineteen-Eighty Four"

The Big Dog's back

winnie, the election's over. You lost.

Centauri

I found something very disturbing on the internet, something that America's main stream news is not writing about. It appears that American political activists are now being poisoned to silence them. It is listed under the Economy And Society blog. The comment is about one American who fled the country and is seeking political asylum in Europe. It is an interesting read about the CIA going after American political activists. I will be researching this much further. Those who don't care where this once great nation is heading need not read the information. Those who care should read the story. There are a couple of youtube videos posted by the author also.

http://blog.heidi-barathieu-brun...

http://cleveland.indymedia.org/n...

2cents

But, But, But MR. President, you said something totally different!!!

http://www.youtube.com/watch?v=a...

Tickle me when the recession is over please

Contango

@ 2cents:

Mr. Obama is a "wordsmith." Typical for an attorney.

Remember Mr. Clinton's famous phrase?

"It depends on what the meaning of the word 'is', is."

According to the NBER, the U.S. has been out of recession since June '09.

D*mn the economy - tax hikes ahead!

Here's my take:

70% of U.S. GDP is made up of consumer spending. Approx. 30% of consumer spending is done by the rich.

Tax 'em more and GDP will decline accordingly, maybe 1-2%.

Well if GDP is only growing at about 2% (lousy), what effect do you think that will have on the economy???

2cents

(C)
I will go back after Christmas and ask the jeweler if the 60% of his lost small business customers come in this year!

the office cat

OOOPS, Contango 'ignorance alert'. CJ Roberts routinely states that thing about what 'is' is. Persons who understand the law, understand the importance of meaning and context. Go read a few 10,000 pages of judicial dicta.
I think we need to realize that the only thing trickling down is something with a strongly yellow hue.

shucks

2cents

12years of Bush tax breaks have damaged the USA

Contango

@ 4shizzle:

But according Mr. Obama, the Bush Era tax breaks for 98% of the population are OK?

Some "damage." :)

shucks

@con

The 2% ers own 98% of the wealth. Is a plutocracy OK?

Reads like damage :(

Contango

@ 4shizzle:

"The 2% ers own 98% of the wealth."

Got a "credible" source for this nonsense?

BTW: If you earn $48K annually, you are in the top 1% of income earners in the WORLD.

Americans are spoiled, rich whiners. We are a nation of "Haves" and "Have Mores."

http://en.wikipedia.org/wiki/Lis...(nominal)_per_capita

shucks

@contango

"The 2% ers own 98% of the wealth."Got a "credible" source for this nonsense?"
Google it,(could be 95%--sue me).

"BTW: If you earn $48K annually, you are in the top 1% of income earners in the WORLD."
Apples and oranges and smoke.

"Americans are spoiled, rich whiners. We are a nation of "Haves" and "Have Mores."
You like to quote statements and sound bites- do you recognize yourself?

Contango

@ 4shizzle:

Not surprised that you can’t produce any facts for your nonsense.

Even 95% is absurd.

http://articles.latimes.com/2012...

Mr. Obama has increased foreign aid spending. Guess he doesn't think that redistributing American wealth worldwide is a&o.

http://www.politifact.com/truth-...

Pages