Republicans have sounded pessimistic notes over their bargaining power during the period leading up to the so-called fiscal cliff. Some have even called for a strategic rubber stamp of everything the Obama administration wants to do, just so responsibility falls on the heads of the president and his party — so depressed are they over their ability to hold up Obama’s agenda.
As it happens, Charles Krauthammer strenuously disagrees. In a segment on Fox News last night, Krauthammer put the terms of debate in Washington in stark, unequivocal terms.
“Look, Obama has never offered anything in public about entitlements. He always says he wants a discussion. And now he says after the Republicans give up their one issue on taxes, I’ll discuss a bargain next year. Of course he wants that, because that’ll be the time when the Republicans are defrocked, disrobed, and disarmed, and will have nothing to bargain with,” Krauthammer said. “Republicans started out…by offering a peace pipe, by saying ‘we’ll raise the revenues,’ and they just had a punch in the nose this afternoon. Any Republican who buys this is a fool.”
And what of the argument that Republicans have no leverage?
“They [Democrats] imagine that Republicans have no bargaining power today,” Krauthammer said. “I say it’s true that if Republicans resist, they’ll take the blame, and that will help Democrats in the Congress, but Obama’s never running again. He doesn’t care who gets the blame. He’s gonna be the President. He’s a lame duck. He wants a successful second term. If it starts by going over the cliff, it starts with a second recession, two million unemployed, and a wrecked second term. That’s the leverage that Republicans have over Obama.”
Video follows, courtesy of the Daily Caller:
Krauthammer’s argument certainly carries some weight. While liberals cheer over the fact that President Obama could get every liberal policy under the sun enacted simply by allowing the fiscal cliff to arrive, estimates as to what would happen if America were to actually go over the fiscal cliff have been, to put it mildly, alarming. The Washington Post’s Wonk Blog sums up the three most likely effects as “recession,” “deficit reduction” and “tax increases.” From the section on the potential for a second recession:
Analysts expect that the austerity crisis will weaken the economic recovery and quite possibly plunge the United States back into a recession. The CBO predicts that the U.S. economy will shrink by 0.5 percent in 2013, and unemployment will spike up to 9.1 percent from its current level of 7.9 percent, if no fix is passed. However, if all policies, including the payroll tax cut, are extended, the economy will grow 2.4 percent. Analysts at the Levy Economics Institute and Goldman Sachs have predicted even more dire outcomes.
So while liberals are correct that many of their preferred policies would likely kick in if the fiscal cliff is not averted, the problem is that when those policies kick in, the country will plunge back into a recession. At that point, it is likely that no amount of blaming Bush will be sufficient to avoid political fallout.