Anti-tax activist Grover Norquist is once again leading the conservative charge, urging Republican lawmakers to stand firm against President Obama's insistence that a tax hike for the rich be included in any deal to slash the deficit and avoid going over the fiscal cliff. Treasury Secretary Tim Geithner says there will be no agreement without a tax-rate hike for the richest 2 percent of Americans, who make more than $250,000 a year. And while Obama doesn't want to go over the cliff, he's willing to do so if Republicans don't budge, administration officials tell Mother Jones. Economists say doing that, and allowing a series of automatic tax increases and spending cuts to take effect starting Jan. 1, would suck $600 billion out of the economy and trigger another recession. Why would Obama take that risk? Here, four reasons he might be willing to gamble:
1. Obama holds all the cards
The president simply has no reason to cave if Republicans dig in their heels, says Greg Sargent at The Washington Post. All of the Bush-era tax cuts will expire at year's end if Congress does nothing. Once that happens, "Dems can come back and move to pass just the middle class tax cuts, challenging Republicans to vote against renewing them," while leaving the wealthy's breaks to die separately. The GOP's only options will be giving Obama what he wants or voting against tax cuts for 98 percent of the population. Advantage, Obama.
2. Focusing on the rich gives him cover to raise everyone's taxes
"Obama doesn't seem to know much about economics," says Steven Hayward at Power Line, "but he certainly knows that taxing the rich alone won't begin to resolve the deficit." He's going to have to push through sweeping taxes on the vast middle class, because that's where "the real money" is. All this huffing and puffing about getting the rich to pay more "has always been a liberal cover for raising taxes on everyone." Politically, Obama "actually wants to go over the fiscal cliff," because he wants to be able to "slam the middle class, and blame it on Republicans."
3. Americans are ready to blame Republicans for this crisis
If we go flying into the abyss, says Joan McCarter at Daily Kos, 53 percent of Americans will blame Republicans, while just 29 percent will point the finger at Obama. So if we do go over the cliff, Republicans will be in a worse bargaining position than ever. Winning concessions out of House Republicans in the new Congress will be easier after they've faced the public's anger over this "lame-duck failure."
4. He's underestimating the Tea Party
"Despite the mainstream media's constant vilification of the Tea Party," says Roger Pilon at Politico, "the movement remains a potent, albeit uneven, force in American politics." Obama doesn't see that, nor do his Democratic colleagues or the establishment Republicans preparing to cave to his demands. Obama's fans in the press portray "the 'fiscal cliff' as a tragedy to be avoided only by raising taxes on the wealthiest Americans." Our "demagogue-in-chief" is fooling himself, though. The only way to reverse our economic slide is, and always will be, to grow the economy, and Tea Partiers still have the strength to make Obama and the Republicans who kill jobs by raising taxes "pay the price" next election day.