Some leading liberals and Dems are hoping the White House — if the fiscal talks break down — will prove willing to let us all go over the fiscal cliff and let all the Bush tax cuts expire. That way Dems could return in 2013 and pass the tax cuts for those under $250,000 again — the Obama tax cuts for the middle class! — while leaving taxes on the rich at Clinton-era levels.
So it raised some eyebrows on the left when the Associated Press reported, almost in passing, that the White House regards this idea “frostily.” If true, this would be a big deal, because it would mean the White House is nixing one of its key endgame options.
On reflection, however, I’m not too worried about this — yet. Here’s why: If the White House were open to going over the fiscal cliff, it would be folly for it to signal it publicly. The White House needs to publicly suggest it isn’t really open to the idea.
If the White House publicly signaled openness to it, that would risk squandering its leverage. One key reason the White House has the advantage in this battle is that the election’s outcome — an endorsement of a mix of tax hikes and spending cuts — is putting pressure on Republicans to drop their opposition to tax increases, or be perceived as deaf to the will of the people. If the White House blithely declares it is ready to go over the cliff, that allows Republicans to argue that Obama isn’t serious about reaching a compromise, perhaps allowing them to evade some of the blame if we do go over it. The prospect of bearing that blame has to be weighing heavily on GOP leaders.
What's more, it’s one thing for Senate Democrats and liberal commentators to publicly endorse the idea of going over the cliff. It’s quite another for the White House to do so, since (unlike Senate Dems and high profile liberals) it is the primary negotiator in the fiscal cliff talks. And after all, the White House is not giving away the leverage the option of going over the cliff gives it by not confirming publicly that it’s willing to take that step.
None of this means Obama is in fact willing to go over the cliff if necessary. He may not be. I hope the White House is willing to take that plunge if the only choices are that or a bad deal. But we may have to wait until that actually happens to learn what the White House is or isn’t willing to do.