President Obama, regardless of whether he wins reelection, is set on taking the country off the so-called fiscal cliff. He is so intent on raising taxes on those making over $250,000 a year that he is threatening to veto any legislation in the lame duck session of Congress that does not raise taxes on that group.
Republicans want to extend the Bush tax cuts for all income brackets, but Obama allies told The Washington Post Obama is ready to play hardball with Republicans if they do not relent on letting the Bush tax cuts expire for those making over $250,000 a year.
In this case, though, playing politics -- or "hardball" -- would have dire consequences for the country's economy.
If Obama and Democrats play politics by refusing to extend the Bush tax cuts for everyone, economists believe that this, along with the mandated cuts in federal spending, will send the country into another recession.
And yet, Obama and Democrats seem not to care so long as they can score political points.
The Post writes that “freed from the political and economic constraints that have tied his hands in the past” Obama may have no incentive to extend the Bush tax cuts for everyone:
If he wins reelection, Obama may finally be able to dictate the terms of a bipartisan debt-reduction deal. And if he loses to Republican Mitt Romney, Obama could make sure that tax rates rise before he hands over the keys to the White House on Inauguration Day in late January.
Republicans could undo Obama’s tax increases in January if Romney wins, but GOP aides conceded to the Post that “undoing the tax increases after the fact could prove difficult” because “once tax rates rise, any move to lower them again would increase the budget deficit, creating procedural as well as political problems.”
Obama’s threats have scared Republicans and policymakers concerned about the dire consequences that would follow if the country went off the fiscal cliff, and they are planning creative ways to potentially avoid such an event.
According to the Post, if Obama wins, “top GOP aides in both chambers say Republicans would press him to abandon his quest to raise the top rates, in exchange for a more meaningful prize — a long-sought agreement to stabilize the debt, in part with significant new tax revenue.”
Other ideas under discussion include: “a temporary surtax on millionaires along the lines of what Obama has called the ‘Buffet rule,’ and a temporary cap on the value of deductions and other tax breaks claimed by top earners, an idea backed by Obama and endorsed by Romney for taxpayers at all income levels.”
The Post also notes Republicans could even propose increasing the debt ceiling in negotiations to avoid the fiscal cliff.
Democrats, though, continue to think raising taxes on those who earn more than $250,000 is a winning issue and may be even more intent on doing so than even Obama. Senator Chuck Schumer (D-NY) said he was going to ensure Obama does not back away from his promise to let the Bush tax cuts expire for those in the top tax brackets.
“We have worked very hard to separate tax breaks for the rich from tax breaks for the middle class, on both ends of Pennsylvania Avenue,” Schumer said. "The fact that we’re winning on this issue is a sea change.”
With reckless Democrats like Obama and Schumer, the country's economic future could be even more perilous.