It is the summer of 2011 all over again. In January we will have President Obama in the White House, a Republican-controlled majority and a Democratic majority in the Senate with many red state Democrats up for reelection in the next cycle. Speaker of the House John Boehner (R-Ohio) is open to tax reform that generates more revenue but not rate increases. The president goes in front of the press to say he is open to a compromise and wants the rich to pay a little more but stops short of insisting on a rate hike.
Today The Post reports on the president’s appearance:
“I’m open to compromise. I’m open to new ideas. I’m committed to solving our fiscal challenges,” Obama said. But he held the line on raising taxes on the wealthy.
“We can’t just cut our way to prosperity,” Obama said. “If we’re serious about reducing the deficit, we have to combine spending cuts with revenue, and that means asking the wealthiest Americans to pay a little more in taxes.” . . .
Republicans say they are willing to entertain new tax revenue but will not allow rates to rise on upper-income earners, as is scheduled to happen at the end of the year. Notably, Obama did not say rates must rise on upper-income Americans — only that they must pay more in taxes — leaving room for a potential compromise.
This is precisely where we were about 15 months ago when the grand bargain on precisely these terms broke down. It may shock dim reporters or confuse Democratic spinners, but this is nothing new. The only thing that has changed is that the president has the experience of seeing a grand bargain of historic proportions slip through his grasp. He and Boehner know precisely where the deal is to be had — where they were when Obama upped the ante on taxes and the grand bargain crumbled.
The political alignment is not unlike what it was in 2011. The president and Boehner want a deal. Senate Democrats from red states who will face voters in 2014 don’t want to send the country over the fiscal cliff or be tagged as tax hikers. Senate House members and safe blue state Senate Democrats would just as soon demand a tax rate hike, let the country go over the cliff and blame Republicans. What is different today, however, is that the president really has no interest in getting pushed around by unrealistic liberals in his party. They might have to stand for reelection, but he doesn’t and it must pain him to realize the grand bargain got away last time.
As for Senate Republicans they already passed the revenue-raising Rubicon in the supercommittee when Sen. Pat Toomey (R-Pa.) put a deal on the table that would have increased revenue without tax hikes.
There will be a Kabuki dance when everyone comes to the White House next week for a meeting on the fiscal cliff. But that said, the opportunity for a deal is very much there just as it was more than a year ago. The only question is whether the president has the nerve and skill to grab it this time.