Watch out, folks, this could get bumpy.
With the release Monday of a proposal, or something approximating one, from House Republican leaders on a way to avert the "
There are many flaws with the proposal House Speaker
And much of the projected savings from budget cuts comes from unspecified program cuts — as if all federal spending were created equal — and from increasing the eligibility age for
On the plus side, it does dispense with the notion that deficit reduction should center on a radical restructuring of Medicare and Medicaid, and it suggests that Republicans are willing to accept real revenue increases, not the fantasy increases they have previously insisted would spring from a growing economy. And Rep.
Given the reality of the situation — on Jan. 1, tax rates on everyone are going up if nothing gets done — and the recent suggestion by some Republican lawmakers that the party should just pass tax cuts for the middle class now and worry about the rest later, Mr. Boehner's proposal might seem like so much political throat-clearing before the two sides get down to some earnest, smoke-filled-room deal making.
But there is one big problem here, and it is the same one that drove the debt ceiling debacle of 2011. Mr. Boehner may find he has little room for honest negotiation with President
The reality is that President Obama's bargaining position only strengthens on the other side of the cliff. His goal of higher tax rates for the rich would then automatically become law, and his desire to maintain lower tax rates for the rest of the nation would be next to impossible for Republicans to oppose. The president could also likely limit the immediate damage from the across-the-board spending cuts due to take place in the new year until a broader deal could be negotiated.
There is, however, real risk that even a brief fall over the cliff could roil financial markets, sap business and consumer confidence and send the economy back into recession. For that reason, the president must still put forward a good faith effort to strike a deal before Jan. 1. But he shouldn't accept anything close to what Mr. Boehner is proposing.