Tag Archives: United States public debt

Steering clear of the cliff

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Joshua Green wonders what might have been, had President Obama been willing to maximize his leverage from the fiscal cliff:

Even before the deal was settled, many liberals were outraged at how much he was willing to concede to avoid going over the cliff — an event for which every poll showed Republicans would be blamed. Most Republicans were terrified at the prospect.

Nonetheless, Obama agreed to raise income tax rates only on households making $450,000 or more; establish a generous inheritance tax exemption; and lightly tax dividends and capital gains. The income-tax threshold alone sacrifices $200 billion compared with what he had once insisted on. But the revenue sacrificed isn’t terribly important.

What is important is that Obama yielded on resolving the budget deadlines, the most consequential being the need to raise the debt limit. Already, Republicans are threatening default without deep cuts in return. Had Obama been willing to go over the cliff, they probably wouldn’t be, since the public would be furiously blaming them. By pulling back, Obama passed up a chance to “break the fever” (as he likes to put it) that afflicts the Republican Party and led it to oppose nearly all that he has done during his presidency.

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Why Democrats are so confident about the fiscal cliff

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It’s all about the numbers:

A majority of Americans say that if the country goes over the fiscal cliff on Dec. 31, congressional Republicans should bear the brunt of the blame, according to a new Washington Post-Pew Research Center poll, the latest sign that the GOP faces a perilous path on the issue between now and the end of the year.

While 53 percent of those surveyed say the GOP would (and should) lose the fiscal cliff blame game, just 27 percent say President Obama would be deserving of more of the blame. Roughly one in 10 (12 percent) volunteer that both sides would be equally to blame.

Kevin Drum can’t get over how lopsided these figures are:

The Post site has a tool that lets you look at various demographic subgroups, and it turns out that everyone would blame Republicans. I figured maybe old people would blame Obama instead. Nope. Southerners? Nope. White people? Nope? High-income people? Nope. Literally the only group that didn’t blame Republicans was….Republicans.

Politically speaking, President Obama’s main job is to keep things this way. Republicans pay a price for their anti-tax jihad only if the public blames them for the ensuing catastrophe. But if Obama sticks to reasonable asks—modest tax increases, modest spending cuts, and a debt ceiling increase—and pounds away at Republican intransigence, these numbers aren’t likely to shift much.