Is Obama blinking here? Or is he trying to kill whatever deal gets struck?
My read all along has been that he reaches Democrat Nirvana just by doing nothing before the new year. Taxes go up, defense gets slashed to the bone, entitlements remain mostly untouched. He even has the media systematically failing to report that sequestration was his own White House’s idea to begin with. After we go over the cliff, he’ll have more leverage to force the Republicans to cut taxes on the middle class back to the 2012 level, and gets to pretend that they’re the Obama tax cuts, not the Bush tax cuts. He has had to pretend to negotiate in good faith at this point, but maybe Vice President Biden is making the mistake of actually doing that and now Obama is looking at the possibility that some sort of deal could actually happen.
So there is or was a deal on the tax side of the fiscal cliff, according to Robert Costa at NRO. That tentative deal moves the rate hike up to the $400,000 level for individuals and $450,000 for couples, permanently patched the AMT and a couple other things. McConnell and Biden struck the deal, after sidelining Reid and allowing Obama time to write another speech. It did not address spending. Then at 1:30 eastern, President Obama came out and delivered a little speech that may have scuttled even that deal.
The scuttling may have been intentional. At the height of tense negotiations on the last day before we all pitch over the cliff, Obama punched Republicans in the face with a warning that he’ll circle back to tax hikes again: “If Republicans think I will finish the job of deficit reduction through spending cuts alone … then they’ve got another thing coming.” That’s what he said this afternoon, while McConnell and Biden are hammering out some kind of micro deal that’s not going to be popular with anyone. With no spending cuts, it’s not even a very serious deal. Obama is either a terrible negotiator or he isn’t interested in striking a deal. Liberals in the Democrat caucus opposed moving the tax rate hike an inch above $250,000 and are threatening to walk away. Such an act would have left Obama without a party and without the total victory he could get by simply going over the cliff. But if he enrages Republican enough that they walk away, well, we’re back to him getting everything he wants and then blaming Republicans for all the downsides. Maybe Biden is looking at his own 2016 future now that he’s center stage, and sees a deal working in his favor long term? Beats me, honestly. But if he and Obama are not really on the same page, it puts the GOP’s own divisions in some perspective.
But the deal isn’t scuttled entirely yet. It just doesn’t do very much. We have a spending problem, driven by mad entitlement spending. The deal doesn’t address that. It just moves the tax rates around. And liberals like Tom Harkin aren’t even on board with that much, at least publicly.