Reports that Biden, taking up the fiscal cliff baton, is on the point of
giving away the store have sparked deep depression in the left-side twittersphere this morning, leading me to this acid flashback:
And on cue, we have
this from Senator Tom Harkin this morning:
December 31st, 2012 11:13 AM ET
Washington (CNN) - Sen. Tom
Harkin, a veteran Democrat and a leading liberal voice, told CNN Monday
that he and other Democrats may try to block the fiscal cliff deal
that's being furiously negotiated ahead of the year-end deadline.
"They think Republicans may object? We may object," Harkin told CNN.
The Iowa Democrat said he and other progressives are furious about any
suggestion of raising the household income threshold to $450,000 for tax
cut extensions. President Barack Obama campaigned on a promise to raise
rates on households making more than $250,000 a year.
Unless the Dem negotiators have a few rabbits in the hat, as in
December 2010 (e.g., higher taxes on investment income kicking in at a lower threshold, high income deduction limits, payroll tax cut extension, EITC, expanded child tax credit and college tuition credits made permanent, debt ceiling deal), calling a halt would be a good thing. But as I
worried on Saturday, Dems will lose their leverage if they're the ones seen as scotching a deal. Though Chuck Todd raises my hopes for some cover:
@chucktodd
Just spinning wheels, I guess. I remain torn between hope that any deal that emerges prior to midnight will be better than expected and fear that Obama & co. will give away the store, as Obama was apparently prepared to do in July 2011.
Greg Sargent just now conveys the apparent WH thinking: if they do go over, the House can quickly pass a bill to cut taxes on income below 5 or $600,000, undercutting any Dem pressure to set the threshold lower, and they'd probably get some House Dems, and they'd certainly get some Senate Dems. All the pressure then would be on Harry Reid.
ReplyDeleteIn that scenario, though, the Dems could still run a hard bargain, loading up perhaps with several more of their priorities--like some real stimulus--than they could get in a deal today. In addition, post-cliff they will still have some nice estate and dividend tax cuts to bargain with.
I think the Dems are underestimating their post-cliff bargaining power.