I don’t think the government is going over the fiscal cliff. That is, I believe Republicans and President Obama will reach a deal on tax increases and spending cuts that will avert cuts that everyone agrees will harm the economy and undermine national security.
The signal comes in this paragraph in a Washington Post article running today. It notes that in Wednesday’s press conference, Obama said he was sticking with his insistence that the Bush tax rates for the wealthy go up. But what he craftily omitted is by how much they have to go up.
But in a break with the position he took on the campaign trail, Obama said he would not insist on drawing “red lines” around 39.6 percent, the rate in effect for top earners during the Clinton administration. Democrats familiar with White House thinking said Obama is willing to set the top rate somewhat lower — around 37 percent or 38 percent — as long as the overall burden grows for families earning more than $250,000 a year.
That will have to be the locus of a deal. Obama was right about one thing in his press conference – every voter knew what his position was on taxes. In a campaign mostly bereft of ideas, the one Obama was clear about was that he wanted to raise income tax rates on the rich. He cannot possibly back off this demand.
Republicans can claim a victory if they keep him from restoring the old Clinton-era rate.
I’ve seen many of these cliff hangers in my years covering Washington. They always include lots of posturing, grievous handwringing about “How can we possibly let this happen?” and then at the last very moment, a deal.
What’s more, the holidays are coming. Everyone is tired, and everybody wants their holiday. I mean it, these things really matter for lawmakers, and everyone else in Washington. John McCain lamented to me a couple of years ago that protracted budget negotiations had “ruined Christmas.”
I felt the same way, having to cover the damn thing, and I’m Jewish.