President Obama Wimps Out on Fiscal Cliff Negotiations
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This president continues to disappoint, even after being elected for a second term. His spineless negotiating skills have become quite apparent as he caves in to republican leadership once again, and gets very little in return.
With the fiscal cliff deadline fast approaching, President Obama is softening his stance on taxes.
Win McNamee/Getty Images
Ryu Spaeth of The Week says that in the aftermath of President Obama’s lopsided victory in the presidential election, there was a general consensus that he held a winning hand as he began negotiating a budget deal with the GOP to avoid going over the fiscal cliff. Obama campaigned on a pledge to raise taxes on households making more than $250,000 a year. A majority of Americans support that position. And Republicans were painted into a corner: If they didn’t accept Obama’s position, all the Bush tax cuts would expire at the end of the year, drastically raising taxes on all Americans. If the GOP blocked Obama, the thinking went, voters would blame Republicans for raising everyone’s tax bill in order to protect the rich.
Obama was so firm on the $250,000 threshold that he reportedly told Speaker John Boehner (R-Ohio) that it was not even a part of the negotiations. “I get that for free,” he said, referring to $800 billion in revenue that the tax hike on America’s rich would generate. And yet, with the midnight deadline fast approaching, it appears that Obama has dropped his hardline stance on taxes. According to Politico, Vice President Joe Biden and Senate Minority Leader Mitch McConnell are hammering out a last-minute deal that would raise taxes on households with more than $450,000 in annual income, and individuals with $400,000.
That’s not a lot of revenue. Indeed, as Jonathan Chait at New Yorknotes, “the $250,000 a year threshold was too high to begin with.” Now, in exchange for raising the threshold to $450,000, Republicans reportedly may agree to extend unemployment benefit insurance for two million out-of-work Americans. The fiscal cliff’s automatic spending cuts would presumably be punted to another date (possibly setting up — ugh — yet another fiscal cliff scenario).
In other words, it looks like all Democrats will get are the unemployment benefits, which are temporary, and a tax rate hike on less than 1 percent of Americans.
What does the GOP get? A possibly permanent extension of almost all the Bush tax cuts. And a lot of leverage for future negotiations: Early next year, Congress will debate whether to raise the debt ceiling, and at that point Obama will not hold any cards. With the U.S. at risk of defaulting on its debt, Obama will come under immense pressure from Republicans to match a “dollar of spending cuts for every dollar of debt-ceiling increase,” says Ezra Klein at The Washington Post.
The Obama administration has drawn a line in the sand on the debt ceiling, saying raising it is not up for negotiation. But what Republican will believe him after he caved on taxes? After he exchanged his strongest negotiating position in years for a trickle of revenue? Unsurprisingly, liberals are furious. “Suddenly that sinking feeling, the sense that you’ve got a leader you can count on to wimp out when it matters, is back,” says Paul Krugman at The New York Times.
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RickRay
January 1, 2013 at 9:51 am
As the old song says; “Que sera, sera, whatever will be will be. The future’s not ours to see; que sera, sera.” So sad, but the GOP are glad.
Michael John Scott
January 1, 2013 at 9:58 am
Doris Day….wonderful movie.
Les Carpenter
January 1, 2013 at 10:19 am
It’s called kicking the can down the road. Nothing new, same old same old.
The oligarchs continue to hold the cards. Sooner or later American partisans on both sides will realize they are being played, one against the other.
The irony of it all.
Michael John Scott
January 1, 2013 at 12:04 pm
Very true and well said Les. It makes me sad, all of this. We should throw every one of the bums out.
Bill Formby
January 1, 2013 at 1:14 pm
Well, isn’t this sot=rt of odd. We wail and gnash our teeth at the entrenched Republicans who spent the entire first four years making no compromises. When the POTUS finally gets them to a compromises now he is a wimp. He gets the first tax increase from the Repubs in 20 years and yes, it is an imperfect deal. There are still issues to work out, absolutely. But, there was actually a compromise and something actually got done. The major thing is can they continue by getting other things done despite the fact that there is no way to please everyone. There will always be something that both sides will not like.
Les Carpenter
January 1, 2013 at 4:09 pm
Now, THAT was well said Bill. Comprise is after all very effective when properly thought out and executed. Our founders understood this quite well.
Tao Speaks
January 1, 2013 at 9:41 pm
I agree with Bill, I mean we haven’t raised taxes in 20 years and lets be honest, we still think, both Republicans and Democrats along the lines of supply side economics and talk about “job creators.”
Like Obamacare, this whole fiscal cliff thing is a nightmare, but the reality is our government and nation is very dysfunctional and its probably the best we can do.
That is the really sad part, we are at a crossroads, and this is as good as it gets?
I am not sure what Obama could have done differently….I mean besides the Republicans and the Tea Party, all the big money is sitting on the other side of the table. All Obama has on his side is “We The People…”