There is little question that the money needed to reduce the deficit enough to avoid the fiscal cliff can be found without raising tax rates on upper income Americans. President Obama insists there will be no deal unless this is done. Republicans aren’t budging, demanding to raise revenues by closing loopholes and scaling back deductions while making serious cuts to entitlements.
But Obama campaigned on almost nothing. His main platform was the personal destruction of Mitt Romney. One of the few policy ideas he did promulgate was raising taxes on people who are the highest earners. If he gives that up, then his campaign – he – are truly not about anything.
And so he continues to insist on a rate increase. Republicans have resisted, and if they change course, they will have caved to Obama.
Republicans were not sent to Washington in 2010 to raise tax rates. Doing so would spur division and wounds within the Party that would not easily heal.
According to Charles Krauthammer, Obama’s true aim is not less than destroying the GOP.
Well, that may be part of it, but Obama will not cave on this after his victory. The question is whether Republicans will give him a fig leaf and allow taxes on high earners to rise by a small amount – not quite back to the Clinton-era levels Obama wants.
Republicans have a lot of leverage, as I’ve written. But they cannot move Obama on this, because otherwise Obama is nothing. What they should do is offer to raise rates by the smallest amount imaginable, offering him the tiniest fig leaf to cover his nakedness on deficit reduction. A tax increase is a tax increase, after all, whether you do it through rate adjustments or ending deductions. And it won’t destroy the Republican Party.
Not giving Obama a small rate increase would plunge the nation over the cliff, resulting in a second recession and massive pain for the country.
Meanwhile, Republicans should insist on far-reaching cuts to entitlements that Obama has resisted. Because they have strong hand, with Obama dreading a recession, they’ll get it. And they should make sure much of the tax rate
But to send the country into the abyss over a tiny increase in rates is unacceptable.
I believe in the end this is what will happen. I don’t think we’re going over the cliff, not for any length of time. But, really, who knows?