Talking to plugged-in Republicans over the weekend, I got a couple overarching impressions. The first is a real, and not merely theatrical, pessimism that lawmakers in Washington are going to be spending Christmas with each other, and that we very well may go over the “fiscal cliff.” Republicans see in these negotiations an asymmetry of incentives. It’s not simply that President Obama has more leverage than House Republicans, or that he “holds all the cards,” or that he’s willing to go over the cliff. It’s that Obama wants to go over the cliff. He gets what he’s after with no resistance: more revenue, cuts to defense, and entitlements untouched.
Does he want millions of taxpayers to get hit with the Alternative Minimum Tax? Rates to go up on the middle- and working-class? Worse still, another recession? Of course not. But, as Bill Kristol writes, Obama knows that,
Republicans will fold with lightning speed after we go over the tax cliff on January 1. … If we go over the cliff, there won’t be damage to Obama’s chances of second-term success. Quite the contrary. What Republicans will have done is to make Democrats the party of tax cuts and Obama a president fighting for economic growth. As I say, it won’t happen. Most Republicans will go along soon after January 1 with what will now be the Democrats’ tax cutting agenda.
Which brings me to the second impression I’m getting from Republicans: they’re anxious about how the cliff battle might fracture the party. They compare hardline conservatives’ refusal to compromise, in some fashion, to the 1995 government shutdown.
They believe Obama won’t be satisfied with a favorable deal; they believe he wants to drive a stake through the heart of the Republican party.
Negotiations over the cliff are now down principally to House Speaker John Boehner and President Obama. A fly on the wall might hear something like the following exchange between the two men:
“Mr. President, we’ve put revenues on the table; we’ve compromised; it’s time for you to move toward us.”
“Mr. Speaker, I’m not sure your caucus has moved toward you. How ’bout we wait a couple more weeks?”
As I noted earlier, these are impressions. I remain stubbornly optimistic that the basic elements of a deal are in place. Can they push it through before Santa’s sleigh takes off?