Obama believes that if we go into the abyss, he can paint the Republican Party as having imperiled the economy and imposed tax increases on the middle class, just to spare America’s top 2 percent from a modest increase in its contribution to debt reduction.
And Obama has a hole card.
If those tax hikes hit Jan. 1, he will be able to posture as the rescuer of the 98 percent by proposing to the new Congress an Obama tax cut that restores the Bush rates for all couples earning less than $250,000.
He will also be able to dictate to Boehner & Co. the tax rate on estates, dividends and capital gains that he will accept or not accept. The Bush tax cuts would be replaced by the Obama tax cuts, as the GOP is cursed from coast to coast for taking us over the cliff.
Obama believes he will then be seen as pulling the nation out of the pit into which the GOP had plunged it, simply to spare its fat cats a needed haircut.
In “Rules for Radicals,” the Alinsky rulebook and Obama playbook, the first rule is, “Power is not only what you have, but what an opponent thinks you have.”
Clearly, many Republicans think that if they do not yield, Obama will let the country go over the cliff, blame them and portray himself credibly as the man who saved the nation from Republican intransigence over a small tax hike for the rich that most Americans support.
Yet Obama is not without risk here. As America heads toward the cliff, there could be panic selling of stocks, bonds and assets to avoid higher taxes on interest, dividends and capital gains in 2013. The economy could tank. Obama could become the Democrats’ Herbert Hoover.
As for John Boehner, he must know that if he yields too much, his caucus will rebel and his speakership will be at an end.
What to do?
Forget the deal. Walk away from the talks with Geithner. Pass an extension of the payroll tax cut, and send it to Harry Reid. Pass the Bush tax cuts, and send them to Harry Reid and say:
“Harry, you are going to have to pass this extension of the tax cuts, or kill them, or send us a counteroffer. Do nothing, and you, not we, will take America over the cliff.”
When Sen. Edmund Ross rose to cast the decisive vote in the impeachment trial of President Andrew Johnson, he said, “I looked down into my own political grave.”
Reviled by the radicals of his era, Ross yet made it into JFK’s “Profiles in Courage.” We are at such a moment.
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