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Posted at 11:04 AM ET, 12/03/2012

White House willing to go over fiscal cliff if absolutely necessary


Chip Somodevilla, Getty Images

David Corn has a piece up this morning arguing that John Boehner is hampered in the fiscal cliff talks by his right flank -- the House Tea Partyers who oppose compromise with the White House at any cost, just as they did during the 2011 showdowns. The difference this time is that the White House has far more leverage over Boehner than last time -- putting him in a particularly difficult spot.

This nugget, buried in Corn's piece, is a key piece of reporting:

This basic dynamic — Boehner cannot haggle freely with the president due to the intense opposition to a deal within his own ranks — has not fundamentally changed. What has changed is the president's hand. According to senior administration officials, Obama is not eager to go over the cliff, but he is willing. If no deal is reached by the end of the month, all the Bush tax cuts — for the rich and not-rich — will evaporate. Obama would then demand in early January that the new Congress immediately pass legislation to reinstate the lower tax rates for the bottom 98 percent.

I have just confirmed that this is accurate -- Obama is willing, albeit very reluctant, to go over the cliff.

If Obama is serious about this option -- and we can't know for certain until it actually happens, but it certainly looks like he is ready to do that rather than accept a bad deal that doesn't hike tax rates on the wealthy -- it is significant. As I noted here on Friday, that is key to preserving the basic imbalance of the current situation -- an imbalance that leaves Republicans with the weaker hand.

That's because the current situation is unique. If we do nothing and all the Bush tax cuts expire, Dems can come back and move to pass just the middle class tax cuts, challenging Republicans to vote against renewing them after they have expired. That would be different from what happened in 2010, when Dems held a similar vote and Republicans voted against it, because at that point, the option remained of continuing them all before they expired at the end of 2010 (which is what actually happened). That won't be the case this time: All of them will have expired. Republicans will be challenged to vote against middle class tax cuts in isolation, simply because the plan on the table does not cut taxes on the rich -- after Obama won an election vowing to raise the taxes of wealthy people.

In other words, if we do nothing, Democrats get what they want, i.e., a decoupling of the tax rates of the middle class from the tax rates of the rich. Or, as MSNBC's First Read crew puts it this morning:

Democrats and Republicans now find themselves in COMPLETELY OPPOSITE places than they were in 2011. A year ago, Republicans were the ones after their victory in the midterms who had the political winds at their back and felt like they had the mandate. Now it's the Democrats. In 2011, Republicans were the ones with more detailed plans about spending cuts (think the Ryan plan). Now it's the White House with a more detailed plan. And back then, Republicans had the leverage with the debt ceiling. But now Democrats are the ones with the leverage.

This dynamic is only made more pronounced by the White House's willingness to go over the cliff if absolutely necessary -- presuming it is real and holds.

By  |  11:04 AM ET, 12/03/2012

Tags:  barack obama, fiscal cliff, john boehner, Republicans

 
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