Fiscal Cliff Afterthoughts

Members of the GOP are licking their wounds today and plotting their next move, to stage an economic coup to overthrow the government of the United States of America. I’ll explain that statement in a moment.

The House passed the deal crafted by the Senate to avert going over the fiscal cliff, and House Republicans are whining and pining that there were no spending cuts. This is a win for the American people, President Obama and the Democrats. The House passed the Senate version of the fiscal cliff bill (257/167) after much wrangling and, as usual, brinksmanship. President Obama gets middle class tax cuts for Americans (a higher income threshold than he campaigned on — up to $400k for individuals/$450k for families), and gets a tax rate increase to Clinton-era rates (39.6%). Spending cuts are delayed for two months.  Unemp­­­­­loyment benefits are secured for an additional year. ­­Let’s face it, the President had most of the leverage here – he won re-election! In the end, Congress did what Obama wanted in the near term, ensuring that middle class tax cuts were extended.

Republicans finally caved because they ran out of time, and simply could not be seen as the Party that caused middle class taxes to increase. They also did not want to be perceived as destabilizing the still-fragile economic recovery. Public opinion polls were not on the side of the Republicans. Most polls indicated that Republicans would be blamed if we went off the cliff. Wall Street simply wanted a deal for the sake of stability, and as a result, markets are up.

But, the next stage of this austerity fight comes in two months when spending cuts must be negotiated with the 113th Congress, and the debt ceiling must be increased. The GOP is promising to hold the debt ceiling hostage again, hence my comments on the coming Republican economic coup. In preemptive opposition, Obama is promising that the debt ceiling will not be on the table. We’ll see. Because the majority of House Republicans of the 112th Congress hated the Senate’s version of the fiscal cliff bill, there is no doubt in my mind that Republicans will attempt to exact political revenge by holding the debt ceiling hostage in 2013. In 2011, GOP obstinacy regarding raising the debt ceiling caused the first downgrade of the U.S. credit rating in history.

If Republicans hate the fiscal cliff deal, the Republican House has no one to blame but itself. Speaker John Boehner had no control of his caucus, clearly demonstrated an inability to negotiate a deal (he essentially had no followers in his caucus) and then offered a bogus plan B solution that he couldn’t even bring to a vote. When Boehner failed, he kicked negotiations over to the Senate for resolution. McConnell made the deal with Biden, and now the House is blaming the Senate for a bad deal? Amazing!

On a related note, Mitch McConnell’s inability to work with Harry Reid or the President is notable. My guess is that President Obama will utilize Vice President Joe Biden to deal with recalcitrant Republicans like McConnell going forward. Racial hatred for President Obama was apparent during the Presidential campaign, and I believe it also played a role during fiscal cliff negotiations. David Gregory’s question to President Obama on Meet the Press regarding Obama’s accountability relevant to fiscal cliff negotiations gave opportunity for President Obama to detail his record. Once more, Obama essentially bent over backward, and came more than half way in order to make a deal (at one point Social Security was on the table) much to the dismay of many Democrats. Obama’s record in negotiating the fiscal cliff has been one of reason, but House Republicans are not reasonable. David Gregory asked the President, “What is it about you, Mr. President, that you think is so hard to say yes to?” Obama replies, “That’s something you’re probably going to have to ask them [Republicans]…” The answer is obvious to me, but Mr. Obama will not articulate it. Republicans simply will not cooperate with the first black President of the United States due to their racial hatred for black people, specifically, black people in power.

I recently tweeted that Republicans are not interested in reducing the deficit. In fact, they create deficits. The only time Republicans care about the deficit is when Democrats are in the White House. Republicans are more interested in destroying the Obama legacy. They lost the 2012 election, but they will not go quietly into the night. If they stage another economic coup, and hold the debt ceiling hostage, it will be to the detriment of the GOP and the American people. I am more concerned for the latter. Some are saying that Republicans will have more leverage when it comes time to increase the debt ceiling. The Republicans will have no more leverage than they did during the fiscal cliff negotiations. The American people want Congress to work together and to cooperate with the President. After all, the majority re-elected Barack Obama.

L. Jackson/01.02.2013

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