From the moment that President Obama finally engaged himself in the fiscal cliff talks it was apparent that he had a well thought out plan that would either force the hand of Republican lawmakers to concede to White House demands or be faced with the blame for taking the economy over the fiscal cliff.
At the same time Treasury Secretary Timothy Geithner was presenting the White House’s proposal for averting the fiscal cliff to Democratic and Republican leaders, the President hit the campaign trail. Just as he did to gain re-election, the President’s plan was to seize the power of both the main stream and social media to influence Americans.
The message
What can be viewed as no more than strategic posturing, President Obama spoke before several hand selected groups of supporters, and of course a full complement of news reporters, repeating time and again his goal to ensure that taxes do not go up for 98 percent of Americans and 97 percent of small businesses while emphasizing that Republicans were more concerned in protecting the wealthiest two percent of wage earners. Clearly, this message was and continues to be sent in an effort to lead the public away from the bigger issues such as the $16 trillion, and growing, national debt and the desire of the White House to increase spending without offering anything realistic in the way of spending cuts.
Democrats want taxes to go up
Whether through a deal struck with Republicans or the automatic tax increases that will result from the loss of the Bush era tax cuts, if we go over the fiscal cliff, the bottom line is the Democrats want revenue to offset at least a portion of their increased spending.
In regards to new revenue, one of the key points of contention between the White House and Republican lawmakers has been President Obama’s insistence on a tax increase for those that earn more than $250,000 annually which the President later pushed up to $400,000.
Although the President’s targeting of the wealthy has been a deal stopper with House Republicans, in a good faith effort to avert a tax increase on the majority of wage earners, on Tuesday Speaker of the House John Boehner proposed his ‘Plan B’ which did include a tax increase on those earning more than $1 million annually. However, with ‘Plan B’ failing to gather enough support to pass a House vote, it should be crystal clear to the White House that House Republicans simply are not interested in handing out any amount of new revenue to band aid the government’s out of control spending.
While addressing the press this morning, Speaker Boehner once again emphasized that “we have a spending problem” and it appears that he and his Republican counterparts will not fold to the pressures of the looming fiscal cliff that would allow the White House to once again avoid addressing this problem.
Simply unable to admit that the government spending is out of control, President Obama seems willing to do anything to prevent having to touch entitlements and it looks as though he is going to get that opportunity. Having failed to gain support for his ‘Plan B’, Speaker Boehner told the media that his last offer, presented to the White House, was his “best and final” offer and now it is up to the President to act.
How will it all end
With each second that ticks off of the clock lawmakers are less and less likely to be able to reach a deal that would prevent going off the fiscal cliff and likely push the economy back into decline. As the Obama administration is already doing little to improve the vitality of the nation’s economy, a small step backwards in exchange for the revenues gained from the expiration of the Bush era tax cuts and avoiding entitlement reform seems to be an acceptable trade off to President Obama.
If we do in fact go over the fiscal cliff the liberal media will play critic and certainly lay blame on Republicans. In the short term the White House will enjoy all the negative media the Republicans will receive however, in the end President Obama is going to have to take ownership of an economic downturn that will be felt though the world economy, a downturn that most assuredly could have been avoided had the President demonstrated strong leadership and the will to work towards real fiscal reform.
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