The lines are now set for the battle over the fiscal cliff. The fiscal cliff, which is a combination of expiring lower tax rates and automatic cuts to government spending, largely focused on the military, is set to cripple our economy come January 2013.
Already, Senate Minority Leader Sen. Mitch McConnell (R-KY) has said he will not stand for tax hikes. So has House Speaker John Boehner (R-OH). If we are to avoid the fiscal cliff – which was designed by Obama to hurt defense spending as a leverage to force Republicans to raise taxes – Obama will have to agree not to raise taxes.
Now Obama has fired back, suggesting that he will allow the economy to fly off the fiscal cliff, Thelma and Louise style, should Congress not cave and allow him to raise taxes on every individual and small business filing as an individual earning over $250,000 per year. His threat is simple: either punish the job creators, or he’ll let the automatic tax expirations punish them. Either way, the economy loses.
Obama stood up in front of a cheering throng in the White House, flanked by Joe Biden and backdropped by a carefully-selected cross-section of the American public for photo op purposes. Then he spelled it out. Read his lips: tax hikes.
“As I said on Tuesday night, the American people voted for action, not politics as usual.” Obama said he wasn’t “wedded to every detail of my plan … but I refuse to accept any approach that isn’t balanced. I’m not going to ask students and seniors and middle class to pay down the entire deficit while people like me, making over $250,000 aren’t asked to pay a dime more in taxes.”
Obama claimed that a majority of Americans agree with raising taxes, as his election showed. He said that included Democrats, independents (false, as they went for Romney) and a lot of Republicans (even more false). Then he attacked Congress. “If Congress fails to come to agreement … everybody’s taxes will automatically go up on January 1. Everybody’s, including the 98% of Americans who make less than $250,000. That makes no sense.”
Obama said “we shouldn’t need long negotiations or drama to solve that part of the problem … Let’s not wait. Even as we’re negotiating a broader package, let’s extend the middle class tax cuts. That one step would give millions of families, 98% of Americans, and 97% of small businesses, the certainty that they need going into the new year. It would immediately take a huge chunk of the economic uncertainty off the table.” The goal of this gambit: separate out tax rates in an attempt to play class warfare.
Obama then declared war on Congress. Obama said, “All we need is action from the House. I’ve got the pen, ready to sign the bill right away.”
“On Tuesday, they said loud and clear, they won’t tolerate dysfunction, they won’t tolerate politicians who treat compromise as a dirty word … most of all, they want action,” Obama concluded.
Obama took no questions. In fact, he reportedly stationed the media so far back in the room that nobody could even shout questions.
Obama doesn’t want questions. Because the American people are only interested in compromise if the result of compromise moves America forward. And President Obama will be solely to blame if no such compromise takes place.