The more the media covers the “fiscal cliff” fiasco, the more perspective is lost. It is really quite simple. Because the Republicans unilaterally jettisoned their trademark anti-tax stance, they will get nothing in return. The Democrats are not going to cut spending. In fact, the new tax revenues will fuel new spending, that will be leveraged into even more debt.
The pre-emptive Republican capitulation decoupled the tax issue from the spending issue, precluding any “Grand Bargain'” or even token spending cuts. The Democrats trademark stance of protecting social programs like Medicare and Social Security from cuts is intact. Thus, Obama is off the hook. He will pay no political price with his own base, nor will he feel any pressure to provide leadership in averting national bankruptcy.
Republicans, on the other hand, have crossed their own base, with nothing to show for it. The GOP, which won control of the House and came within a percent or two of capturing the presidency, now stands for nothing. It is as if McDonalds stopped selling hamburgers. Roughly half the electorate has been disenfranchised.
Just what is the obligation of politicians to keep campaign promises? The American people are realistic enough to know there is isn’t much of one. This is not the first time Republicans have discarded the tax issue in the name of deficit reduction that never came to pass. Remember, George H. W. Bush’s “read my lips” pledge. It contributed to his re-election defeat and set the party back for years.
The ‘fiscal cliff’ dispute is not about just another policy difference between politicians who are insincere only by a question of degree. The $16 trillion national debt and $60 trillion in unfunded liabilities threaten to bring down our economy, the economic engine of the entire world. If nothing is done is done, financial collapse and worldwide depression are inevitable. This is not a simple case of Republican leaders acting like politicians. It is instead their failure at a historic moment to give the country at least a chance to escape the coming nightmare.
John Boehner may have deluded himself into believing that Obama perceives the debt bomb threat, and is prepared to do something about it. Or Boehner may have believed Obama to be a conventional politician like himself who, as the deadline approached, would split the difference. Republicans are now expressing shock and outrage at Obama’s mocking comments yesterday, but what did they expect?
There has never been anything in Obama’s actions, tone or body language to suggest that he views the debt with alarm. If he did, he would not have expanded it so dramatically with annual trillion-dollar deficits, even after the 2008 financial crisis – the purported rationale – was long over.
Obama was never interested in a deal, except on his terms, and in a way where the Republicans took the political hit. It was always all or nothing, like the health care fight in Congress, from which Boehner and Company apparently learned nothing. The only question is how Republicans so easily fell into his trap.
It would be easy to attribute it to simple miscalculation. It was certainly unrealistic to hope that conceding $800 billion upfront in new “revenues” would somehow force Obama to make concessions on spending. Why would the pro-Obama media suddenly drop its bias, and put the White House on the spot?
The real problem is a clash of cultures. The Chamber of Commerce Republicans in the Congressional leadership simply do not understand Obama and the people around him. Whereas Boehner and McConnell are panicked at the prospect of disorder of going over the cliff, Obama takes the long view. The fiscal cliff is not a cliff at all but a tiny gulch compared to the accumulation of annual trillion-dollar deficits for as far as the eye can see. Obama knows that massive debt is the friend of Big Government. The debt overhang guarantees that the government will be the primary actor in the economy forever, and that is why Obama seeks its expansion.