From the Thursday edition of the Morning Jolt:
Obama Deals With the Fiscal Cliff with the Only Tool He Knows: Campaign Rallies
In light of this . . .
President Barack Obama plans to make a public case this week for his strategy for dealing with the looming fiscal cliff, traveling to the Philadelphia suburbs Friday as he pressures Republicans to allow tax increases on the wealthy while extending tax cuts for families earning $250,000 or less.
The White House said Tuesday that the president intends to hold a series of events to build support for his approach to avoid across-the-board tax increases and steep spending cuts in defense and domestic programs. Obama will meet with small business owners at the White House on Tuesday and with middle-class families on Wednesday.
The president will visit the Rodon Group on 2800 Sterling Drive in Hatfield. The president’s visit will cap a week of public outreach as the White House and congressional leaders negotiate a way to avoid the tax increases and spending cuts scheduled to take effect Jan. 1. The trip will mark Obama’s first public event outside the nation’s capital since winning re-election.
. . . I’m not sure Obama really understands negotiating.
So, for the sake of argument, let’s assume that Obama’s rallies for the “balanced approach” — a.k.a. tax hikes, defense cuts, and the slightest of deck-chair rearrangement on entitlements — are a phenomenal success. Let’s assume he gets a decent number of tuned-in Americans — beyond his usual diehard supporters — to call in to Congress. Let’s assume that those folks don’t live in districts with House Democrats who are already aligned with the president’s view on this.
(Notice that Obama is attempting to sway House Republicans by heading to a district represented by a Democrat, Rep. Allyson Schwartz.)
Those Obama fans will be calling the offices of House Republicans who are:
1) Safely reelected in a year when President Obama won nearly 65 million votes nationwide, thus looking pretty darn safe for a low-turnout midterm election in 2014, and thus unlikely to lose their seats anytime in the next few cycles;
2) Defeated in this year’s elections, and thus free to vote however they like, not caring what those constituents are demanding; or
3) Retiring, and thus free to vote however they like, not caring what those constituents are demanding.
Obama doesn’t seem to realize that the time he had leverage with the House Republicans was before these elections, when they might have felt some pressure to “get something done” and demonstrate that they can tackle tough problems like debt and entitlements. President Obama now has much, much less leverage than he did before the elections, and all of the rallies in the world aren’t going to change that.
What is Obama going to do, denounce Republicans for not acquiescing to his agenda? He’s been doing that for four years. What, is he going to put the GOP brand in the toilet? It’s already there!
If you’re a House Republican, what incentive do you have to give ground on tax increases that you think will be damaging to the country? The only significant one is the conclusion that going over the fiscal cliff will inflict worse damage on the economy. And that’s a pretty big one, but it may or may not be worth violating the Grover Norquist pledge, infuriating the base, and giving a diehard, no-holds-barred opponent in the White House exactly what he wants.
Here’s Keith Hennessey, arguing that economic reality will force Obama to accept a deal much less to his liking than he’s letting on:
If there is no bill, the U.S. economy will probably dip into recession for much/most/all of 2013, and it’s impossible to predict whether such a recession would be short-lived.
A 2013 recession would be terrible for the country and terrible for the Obama Presidency. It would limit the President’s options across his entire policy agenda, economic and non-economic. And it could define and dominate his entire second term.
President Obama believes #1 and #2, and therefore avoiding the risk of triggering a recession with his veto is an even higher policy priority than his fiscal policy goal.
The President wants to get things done. He cares more about his own chances for policy success (across the entire breadth of his agenda, whenever he figures out what it is) than he cares about relative political blame. A scenario in which Republicans get most of the blame for a veto-triggered recession is still a loser for him if it means he can’t accomplish his second term goals.
Here’s Erskine Bowles, arguing we have a two-in-three chance of going over the cliff:
Erskine Bowles, co-chairman of the bipartisan Simpson-Bowles commission assembled by the White House to deal with the national debt, said he believes that there’s only a one-in-three probability that Congress will reach an agreement on the so-called fiscal cliff before the Dec. 31 deadline.
“We have a real crisis, and I think it would be insane to reach the fiscal cliff, but I think that there’s only a one-third probability of Congress getting something done before Dec. 31,” Bowles said. “You all know what it means if we don’t, if we go over the cliff — I think you’ll see economic growth slowed by as much as 3 to 5 percent. That’s obviously enough to put us back into a recession.”
Bowles was a bit more upbeat about the chances for a deal after the deadline passes.
“I’m certain we’ll get it done in the lame duck” session of Congress, he said. “I think it’s about one third that we’ll go over the cliff and people will come to their senses pretty quickly. But I think the real problem is if we go over the cliff and we don’t do anything immediately, and that’s also a one-third probability.”
Ed Morrissey looks at a new Washington Post poll on Americans’ views of dealing with the fiscal cliff and is left groaning at the scope and scale of the denial:
The only broad consensus for action is the populist tax-hike option which will solve less than 10% of the problem, and two-thirds won’t even take a basic step like mildly indexing retirement eligibility to life expectancy in order to reduce costs in the biggest fiscal train wreck of the federal budget.
If we could trade marginal tax-rate increases for real cuts in spending and actual entitlement reform that would end the long-term problems in Medicare, Medicaid, and Social Security, I’d take that trade, if somewhat reluctantly. This poll shows that Americans still have not come to grips with the scope and size of the problem . . . or even basic math.
I heard this anecdote from Jonah, and Marc Thiessen summarizes it: “After he was defeated for re-election in 1989, New York Mayor Ed Koch was asked if he would ever run for office again. ’No,’ Koch replied. ’The people have spoken . . . and they must be punished.’”
Look, America, this year, you knew which candidate was the candidate of bigger government and higher taxes and which candidate was the candidate of smaller government and lower taxes. You voted for the tax-hike guy. Now all of our taxes will go up in January, because Republicans refuse to play along with the charade that our fiscal house can be put in order just by taxing “the rich.”
Think of the coming double-dip recession as a grand, national teachable moment.