Obama Calls GOP's "Fiscal Cliff" Bluff

by John M. Curtis
(310) 204-8700

Copyright Dec. 6, 2012
All Rights Reserved.                                         

           Cashing in on some political capital from his Nov. 6 landslide election, President Barack Obama stiffened his bargaining stance to GOP Republicans calling for no more taxes and entitlement reform.  Held hostage by GOP party boss Grover Norquist’s “No Tax Pledge” fanatics in the House, Obama has told Republicans there won’t be any compromise on raising taxes three percent on individuals earning over $250,000 a year.  Beyond the “fiscal cliff,” Barack sees the GOP House blocking raising the debt ceiling, something Aug. 5, 2011 that caused S&P to downgrade U.S. debt.  With the economy teetering on a double-dip recession, the U.S. economy can’t afford more acrimony between Democrats and Republicans.  When S&P downgraded U.S. credit, they cited Washington’s gridlock, where partisan wrangling supercedes doing what’s right for the economy and nation.

            Damage from Hurricane Sandy along the East coast caused a precipitous drop in employment, anticipating Labor Department report to add only 118,000 private sector jobs, compared with October’s 171,000.  With Hostess Brands Inc. going broke and laying off 18,000 bakery workers and truck drivers and CitiGroup announcing today 11,000 layoff in 2013, the economy can’t take a another downgrade.  Calling the “fiscal cliff” talks a “stalemate” Dec. 3, House Speaker John Boehner (R-Ohio) said the talks are “frozen.”  While Boehner and his GOP no-tax fanatics blame the president, reliable national polls show the public on the president’s side.  Since winning an Electoral College landslide Nov. 6, Republicans have lashed out at the president in one of the most egregious cases of sour grapes.  Sen. John McCain (R-Ariz.) led the charge, making a mountain-out-of-a-molehill over Benghazi.

              Realizing that they’ve played a losing hand on increasing taxes three-percent on the rich, the GOP now turns to the next place to blackmail the president:  The debt ceiling.  Knowing that S&P already downgraded U.S. credit last year, the GOP knows they can’t place the gridlock game over the nation’s debt.  “I will not play that game,” said Obama, referring to the GOP’s next attempt to exact concessions on Medicare, Medicaid and Social Security.  “We are not going to play that game next year.  We’ve got to break that habit before it starts,” said Barack, while trying to get a realistic deal on the “fiscal cliff.”  Most economists believe that increasing taxes on the Middle Class would stall an already sluggish economy in 2013.  House Minority leader Nancy Pelosi (D-Calif.) sees the GOP softening on its hardnosed stand defending Norquist’s obsolete “No Tax Pledge.”

             When asked why they oppose a three percent tax increase on the rich, Boehner and his no tax friends insist that any tax increase causes a loss of jobs.  No reputable economist can show how increasing taxes only three percent on the rich will hurt anyone, let alone cost jobs.  Instead of playing obstructionist, the GOP House should try to help self-employed businesses with one employee or more to get exempted from Obama’s anticipated three percent tax hike on wealthy taxpayers.  “If we can take the middle-income tax cuts off the table, then we end the hostage taking that the Republicans have been engaged in,” said Pelosi, concerned that the GOP’s next move is to block increasing the debt limit.  “We’re not going to do that unless you give tax cuts to the wealthy.  I think that clears the debate to find areas of agreement as we go forward,” putting on her rose-colored glasses.

            Given the angry mob mentality on the Hill, it’s doubtful that either party will see eye-to-eye anytime soon.  Like its emphasis on banning abortion and gay marriage, the GOP platform has become irrelevant to mainstream voters.  Boehner and Senate Minority Leader Mitch McConnell (R-Kt.) often talk of how tax increases kill jobs.  They still subscribe along with Party faithful to Supply Side Economics, a failed theory that tax cuts increase jobs and cause the economy to boom.  While tax cuts are a necessary part of a stimulus package, they don’t automatically lead to balanced budgets and booming economies.  Instead of following the advice of Party elders like former President George H.W. Bush, the GOP stubborn placates Party boss Grover Norquist’s “No Tax Pledge.”  GOP officials know that to fund the many important government programs, including defense, taxpayers must pay their fair share.

            Obama’s decisive victory Nov. 6 gave him the political capital to implement his economic program.  Instead of kicking-and-screaming about the election, the GOP should give the president his due with his economic fix.  Former GOP candidate Mitt Romney and his running mate Rep. Paul Ryan (R-Wis.) made their best pitch but lost the election.  Instead of crying of spilt milk, House GOP members should work with president to give him the revenue he needs to run the government and nation’s important programs, including defense and entitlements.  Republicans have tried to bully Obama into slashing entitlements, like Medicare, Medicaid and Social Security, to preserve Bush-era tax cuts for wealthy taxpayers.  Holding the debt limit hostage to coerce entitlement reform also won’t fly with the White House.  No one—Democrats or Republicans—benefits from another downgrade to U.S. credit.

 John M. Curtis writes politically neutral commentary analyzing spin in national and global news.  He's editor of OnlineColumnist.com.and author of Dodging the Bullet and Operation Charisma.

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