The Fiscal Cliff Deal: Reax

Jan 1 2013 @ 12:40pm

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Greg Ip wishes there had been a Grand Bargain:

Permanently replacing the sequester and raising the debt ceiling will require intensive new negotiations likely to begin as soon as the tax deal is signed into law. Yet the last few months have shown the two key players to be incapable of making those sorts of deals. It’s telling that both Mr Obama and Mr Boehner were on the sidelines as the final deal was worked out between Mitch McConnell, the Republican minority leader in the senate, and Mr Biden, a former senator.

Scott Galupo sizes up the Senate bill:

On its face, the deal is a victory for the White House and Democrats in Congress. They didn’t get the revenue they’d been seeking—they’ll get about $600 billion, well short of the $1.2 billion compromise nearly reached with House Speaker John Boehner—but they gave up virtually nothing in spending and extended unemployment insurance for a year without offsetting the $30 billion pricetag. The key, as uneasy liberals have noted, is what it will mean for debt-ceiling negotiations. With taxes off the table, will the focus henceforth be squarely on cutting spending, as Republicans insist? Or will Obama extract more revenue for any cuts he agrees to, as he insisted in a press conference Monday?

Noam Scheiber worries that the deal will embolden Republicans:

If Obama will cave even when he’s got all the leverage, when won’t he cave? Never, the Republicans will assume. If Obama’s too scared to stop bargaining and let the public decide who’s right in this instance, when the polls appear to back him, then he must think our position is more popular than he lets on. Suffice it to say, these are not sentiments you want at the front of Republicans’ mind as they prepare to shake him down over the debt limit in another two months. The White House continues to maintain that it simply won't negotiate over the limit. After this deal, why would any Republican ever believe this? I certainly don’t, and I desperately want to.

Krugman agrees:

[W]hy the bad taste in progressives’ mouths? It has less to do with where Obama ended up than with how he got there. He kept drawing lines in the sand, then erasing them and retreating to a new position. And his evident desire to have a deal before hitting the essentially innocuous fiscal cliff bodes very badly for the confrontation looming in a few weeks over the debt ceiling.

Chait echoes:

I expect instead that his willingness to bargain away his strongest leverage, and the central theme of his reelection, will make the next rounds harder, and embolden Republicans further. I suspect he will wish he had ripped off the Band-Aid all at once, holding firm on tax cuts and daring House Republicans to defy public opinion.

Ryan Lizza sees things differently:

Obama approached this phase of the fiscal wars as the fight over revenue and (seemingly) has reached a reasonable compromise. With a slew of previously temporary pieces of the tax code now locked in, the White House insists it will go into the next phase of negotiations with a stronger hand. Republicans will be stripped of the political power of calling for tax cuts, and instead will be in the unpopular position of mostly insisting on cuts to Medicare and Social Security, which they are often loathe to actually detail. And their response if Obama won’t reduce benefits to the two most popular government programs? They will allow the United States to default and perhaps plunge the world economy into recession.

Josh Marshall's perspective:

For all of you trying to figure out what the unseen force is that prompted President Obama to take this deal now rather than simply go over the cliff and be in an even better position post-cliff, I think I have a good answer for you. All the arguments about Obama caving and being a bad negotiator and all the rest leave out one simple and fairly sufficient factor — Obama really wants a deal. That means more than it sounds like it means. He doesn’t want a deal at all costs. That greatly overstates it. But a deal to some real degree for the sake of finding common ground and having a deal is a big consideration for him. That’s not my personal disposition or the way I meet the world. But it is his. And once you get that, the storyline starts to make more sense.

And Douthat reframes the debate:

Is a Democratic Party that shies away from raising taxes on the $250,000-a-year earner (or the $399,999-a-year earner, for that matter) in 2013 — when those increases are happeningly automatically! — really going to find it easier to raise taxes on families making $110,000 in 2017 or 2021? Color me skeptical: The lesson of these negotiations seems to be that Democrats are still skittish about anything that ever-so-remotely resembles a middle class tax increase, let alone the much larger tax increases (which would eventually have to hit people making well below $100,000 as well) that their philosophy of government ultimately demands.