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Danger, Cliff Ahead: Republicans Have More to Lose This Time

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GOP Pushes for Higher Spending

The other part of the fiscal cliff is spending cuts, which were authorized by the very Republicans who now warn against them. The 2011 fight over extending the Debt Ceiling was resolved with a compromise. Democrats and Republicans would agree to draconian cuts in defense and entitlement spending, which was intended to force a “supercommittee” of Republicans and Democrats to forge a deficit-reduction plan.

The supercommittee ended up deadlocked, with Republicans refusing to consider any tax increases to balance the budget. This meant the “sequestration” cuts suddenly became law, effective in 2013.

Republicans have reacted with panic, as the most immediate impact would be to defense spending. The entitlement cuts were structured to reduce compensation to providers, but not impact health care for people receiving federal care.

This has an asymmetric impact. While Democrats don’t support the sequestration cuts in Medicare, they can live with them, and many Democrats in Congress are quite fine with cutting Defense. Republicans, meanwhile, are forced to abandon their claimed opposition to the deficit, and acknowledge that cutting government spending could adversely impact the economy.

For Democrats, then, this is another case where they hold the leverage. Republicans are desperate to avoid the cuts in defense spending that they voted for.

Republicans also lose their biggest hammer if the cuts do go into effect, even temporarily. Republicans have threatened to refuse to extend the debt ceiling again, which would force yet another crisis over government funding. If the tax cuts are not renewed and spending cuts go into effect, however, the debt ceiling vote will be pushed back.

A “Grand Bargain” in the Works?

Since the Republicans hold such a weak hand, there’s every indication that they will seek to work with the Obama Administration to pass a deficit-reduction plan that both parties can support. Republicans know that some tax increases are all-but-inevitable; the question becomes whether they can compromise with Democrats to limit those increases, and perhaps win concessions on spending.

Any bipartisan compromise is likely to disappoint partisans on both sides, but that doesn’t necessarily mean it’s a bad idea. There is no question that the deficit is large, and that it will need to be addressed at some point. The main question is whether we can balance the budget sensibly, without harming the economic recovery, and without doing so on the backs of the poor, sick and elderly.

While it’s entirely possible that Republicans will continue to be implacably opposed to President Obama, they are at a decided disadvantage going into these negotiations. If nothing is done, we will go over the fiscal cliff — but that is likely to harm Republicans politically far more than Democrats, something the GOP is well aware of.

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5:47PM PST on Dec 23, 2012

Anne P. thanks for the info about Robert L. Borosage's article analyzing the "Fiscal cliff". Obama is certainly clear that he has 2 years before another election. I'm sure he is going to use all the leverage he has to get the most important legislation passed asap.

12:43PM PST on Nov 30, 2012

Elizabeth, I don't think there's any reason to worry, the republicans are, and have always been, committed to doing NOTHING that would move the country forward. Please remember, the house republicans have the WORST approval record in modern history as they refuse to get off their dead asses yet again and carry on with the business of governing that they were supposedly elected to do.

It's all very interesting, because republicans are the ones that passed bush tax cuts and got us into multiple wars without paying for them, or has this been forgotten? In terms of taking responsibility, why don't the republicans take responsibility for CRASHING THE US ECONOMY???

Yet ANOTHER example of living in that 'alternate universe' where REALITY CANNOT, AND WILL NOT, penetrate . . . .

5:15AM PST on Nov 28, 2012

I would like to see republicans abstain from this vote, let democrats pass the tax hike and then take FULL responsibility when the economy continues to stagnate - or spiral down further.
Maybe, MAYBE then BO will take responsibility for this failed economy.

12:11PM PST on Nov 17, 2012

Charles T. - Under your analysis no president has EVER had anything more than a "narrow" popular win.

11:38AM PST on Nov 17, 2012

only a totally partisan blind individual could claim that Repubs were in more trouble with this fiscal cliff coming up...

In case you have forgotten, the recent election gave the President a small plurality (only of the less than 65% who bothered to vote that is) in which those who voted for a 3d party or Repubs actually made up slightly over half of total votes cast. We have the a virtual even split and to claim otherwise is ignoring reality.

Some polls indicate perhaps support for tax increases on the "rich" but none of them do so in the context of the responders understanding who ALREADY pays the vast bulk of Federal income taxes.

Tax increases as Obama said himself when he was running for President SHOULDN'T be raised at all during bad economic times which maybe he forgot that we are currently in. Unemployment is very high for almost 4 years after the "ending" of a recession and economic growth is not much better with signs of slippage. Europe is in recession now and China is struggling...raising any taxes at this time is insanity...

One can claim only Repubs are in danger but after such an election we just got over-you all might want to remember another president in the virtually same circumstances....Bush II. Dems have failed to do anything in 4 years about the economy to include passing a budget. Raising taxes/spending on the basis of a very narrow popular "win" is arrogance at it's best.

7:04AM PST on Nov 17, 2012

The "fiscal cliff" hysteria is a hoax. Americans are being tricked into supporting a "grand bargain" (translation: a "grand betrayal") whereby Social Security, Medicare and Medicaid are pillaged and essential government programs are cut, in exchange for tiny tax increases on the ultra wealthy. Don't fall for it, America! Shared sacrifice is NOT the way to go.

Please take a few minutes to read this excellent analysis by Robert L. Borosage of The Nation:

6:45PM PST on Nov 16, 2012

PS I've got to add - I'm not holding my breath!

6:44PM PST on Nov 16, 2012

Thanks for the info and opinions, Hope some of these things will happen and that Obama has enough support from the house and senate to get something done!

2:42PM PST on Nov 16, 2012

It shouldn't be called a "fiscal cliff" but an "austerity bomb."

5:38AM PST on Nov 16, 2012

Gene J. stated the case nicely. I'd add that this matter needs to be handled right away as most small businesses depend on Christmas sales for a great deal of their yearly income. If people are afraid to make purchases it is going to cripple the economy. We all need to know where we financially stand before the season begins.

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