In 'cliff' talks, Obama on brink of disaster

White House/Pete Souza

President Barack Obama walks with Chief of Staff Jack Lew on the Colonnade of the White House, Nov. 21, 2012.

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  • Right now, Republicans are running scared in the “fiscal cliff” standoff – and Democrats know it. @MarcThiessen

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  • Going over the fiscal cliff would likely cause a new recession, which would be a disaster for President Obama.

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  • Democrats are making the classic Washington mistake of believing their own spin on the fiscal cliff.

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Right now, Republicans are running scared in the “fiscal cliff” standoff — and Democrats know it. As Sen. Charles Schumer (D-N.Y.) crowed last week: “You can smell the winds. When so many Republicans say, ‘Hey, we’re going to have to give in to the Democrats,’ that’s how it works around here.”

Congressional Republicans need to buck up — Obama and the Democrats are overplaying their hand.

The Democrats think they are in a win-win situation. If they bully Republicans into agreeing to raise tax rates before the end of the year, they win — because Democrats get both their new revenue and the self-destruction of the GOP brand as the party of low taxes. If Republicans refuse to cave, Democrats are convinced they still win — because tax rates on the wealthy go up automatically Jan. 1, and they can blame Republicans for any tax increases on the middle class.

This is a major miscalculation. First, their ability to blame the GOP depends on their ability to convince Americans that Republican intransigence is to blame for any failure to reach a year-end deal. But right now, only Democrats are saying they want to go over the cliff. Some — including Schumer and Sen. Patty Murray — are saying so in plain English. With his offer to the GOP last week, President Obama effectively joined the Democratic chorus for fiscal cliff-diving.

The Post wrote that Obama’s “offer lacks any concessions to Republicans.” That’s not true. Obama’s demand that Republicans approve to $1.6 trillion in higher taxes, pass $50 billion in new stimulus spending, abdicate their power over the debt ceiling and make no changes in entitlements until next year was no “offer” at all — it was a demand for unilateral surrender.

While Obama was inviting Republicans to capitulate aboard the USS Missouri, Senate Majority Leader Harry Reid and 32 other Senate Democrats signed a letter declaring, “We will oppose including Social Security cuts for future or current beneficiaries in any deficit reduction package.” Not in a year-end package, mind you, but in any package. 14 Senate Democrats wrote a letter opposing any changes to Medicare or Medicaid as well.

It will be hard for Obama and the Democrats to blame the GOP for taking us over the fiscal cliff when they are the ones cheering for going over the edge. And it will be difficult for them to blame Republicans for wanting to protect tax cuts for the rich, when House Speaker John Boehner agreed to $800 billion in higher taxes for the rich in the form of limits on deductions and loopholes.

Second, even if Democrats succeed in blaming Republicans, going off the cliff is the political equivalent of a suicide-bombing for President Obama: To damage the GOP, he has to blow himself up in the process. Going over the cliff would likely cause a new recession, which would be a disaster for Obama — killing his chances of accomplishing anything of significance for the remainder of his presidency. As Keith Hennessey, former director of the National Economic Council for President George W. Bush, points out in a Wall Street Journal op-ed, a recession would limit Obama’s policy options and “irreparably damage his second term.”

If Obama considers the self-destruction of his presidency “winning,” he’s the Charlie Sheen of American politics.

Third, once we go over the fiscal cliff and tax rates go up for every American taxpayer, we are likely to see a good old-fashioned tax revolt. When is the last time Democrats came out ahead in a tax revolt? Republicans will be able to outbid Democrats in any proposed tax cuts.

Obama thinks he has a lot more political capital than he really does. A White House official told Politico’s Mike Allen this weekend that the “President campaigned on this and won.” So what? In 2004, George W. Bush campaigned on Social Security reform and won. How far did that get him? Bush famously declared, “The people made it clear what they wanted. I earned capital in the campaign . . . and I intend to spend it.” He soon learned he had not earned as much political capital as he thought.

President Obama is about to learn a similar lesson. Exit polls show just 47 percent of the electorate would support raising taxes on the wealthy — not even a simple majority. When asked if “taxes should be raised to help cut the budget deficit,” 63 percent said “no.” And a 51 percent majority said “Government is doing too many things better left to businesses and individuals.” There is no public groundswell for massive tax increases or more government spending.

Democrats are making the classic Washington mistake of believing their own spin, when they should be heeding the drug dealer’s motto: “Don’t get high on your own supply.”

Marc A. Thiessen, a fellow with the American Enterprise Institute, writes a weekly online column for The Post.

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