Obama Won’t Budge on Tax Reform Fiscal Cliff Here We Come

President Obama plans to play hardball when it comes to raising taxes on the wealthy, according to White House spokesmen, and is willing to let the country go over the “fiscal cliff” if Republican lawmakers don’t cooperate.

“This is a choice of the Republican Party,” White House communications director Dan Pfeiffer told the Associated Press. “If they are willing to do higher rates on the wealthy, there’s a lot we can talk about. And if they are not, then they’ll push us over the cliff.”

If a solution is not agreed upon by Dec. 31, and a series of tax hikes and spending cuts take effect in 2013—likely sending the economy into another recession—the White House plans to point the finger at the GOP for its insistence on protecting tax cuts for American families earning more than $250,000 a year.

House Speaker John Boehner (R-Ohio) says Obama jeopardizing Americans’ financial security.

“If the president really wants to avoid sending the economy over the fiscal cliff, he has done nothing to demonstrate it,” he said.

Obama, however, is willing to negotiate other terms of the deal, if Republicans will drop their opposition to raising taxes on the wealthiest 2 percent of Americans.. He said an agreement could be reached “in about a week” if such a concession was made.

“If we can get the leadership on the Republican side to take that framework, to acknowledge that reality, than the numbers actually aren’t that far apart,” Obama told business leaders Dec. 5.
The president holds the political advantage in the scenario. Much of the president’s successful election campaign centered on taxes, and Obama pledged to end Bush tax cuts on wealthy Americans, returning rates to 1990s’ levels. Exit polls indicated 60 percent of voters supported his position. A new Washington Post-Pew Research Center Poll shows 53 percent of Americans surveyed would blame the GOP if the government falls off the fiscal cliff, while only 27 percent would blame Obama.

“The fact of the matter is, the president has an absolute principle that he’s not going to abandon, which is that rates are going up on top earners,” White House press secretary Jay Carney said in a Dec. 5 briefing. The president’s team “is very engaged in this process. But here’s what we’re not going to do: We’re not going to negotiate against ourselves. We’re not going to take the flat refusal of Republicans to acknowledge what will happen, which is that rates will go up on top earner, as an incentive to negotiate against ourselves.”

Republican opinion may be starting to sway from Boehner’s stance to a middle ground that would accommodate the President’s view. Senator Bob Corker (R-Tenn.) told reporters his fellow Republicans are starting to see the benefits of giving in to Obama on tax rates to the GOP can negotiate for other priorities, such as cuts in “entitlement” programs such as Medicare.

“If the House were to give that to him, where does the discussion go?” Corker said. “It goes to entitlements, which is where it ought to be in the first place. I’m hearing whispers of a light going off in some people’s minds.”

Bloomberg reported Dec. 5 several dozen Republicans joined a bipartisan effort to break the impasse between Obama and Boehner by signing a letter calling for an exploration of “all options” on taxes and entitlement programs. Rep. Mike Simpson (R-Idaho) said he would accept higher tax rates for couples earning more than $500,000 per year in exchange for spending cuts on entitlement programs such as Medicare.

“It’s pretty obvious Obama won the election, and he promised he was going to raise taxes on the wealthiest,” Simpson said. “What Republicans said is ‘We’ve got to have entitlement reform.’
“There’s enough sane people left to get it done,” he added.

Likewise, Rep. Kay Granger (R-Texas) has endorsed Rep. Tom Cole’s (R-Okla.) call to extend tax cuts for middle class earnings, calling it the “right thing to do.”