Climax of the Fiscal Cliff: Act I

Climax of the Fiscal Cliff: Act I

This afternoon, at 3pm EST, the five principal players in the tragi-comedic tele-play, “The Fiscal Cliff“, meet at the White House to begin the final maneuvering ahead of Monday’s midnight deadline. The four Congressional Leaders and President Obama will initiate an elaborate public display of negotiating. Comic relief supporting actor, Joe Biden, will be somewhere in the wings. With the near-certainty of going over the “cliff” looming, the next four days will be about posturing to minimize blame. 

This is the first meeting between Obama and the four Leaders in six weeks. That tells you how serious Obama is about these negotiations. He never really made an attempt to avert the “cliff,” but took every necessary action to avoid getting blamed for going over the cliff. It’s possible, but unlikely, that talks over the next four days will result in a short-term patch to most of the “cliff” consequences. But, this patch would be at most 2-3 months, running into a fight to raise the debt ceiling. 

In advance of a weekend of theater, let’s review the cast of characters and their roles in the talks. 

President Obama. The President isn’t particularly interested in getting a deal. When we go over the cliff, he gets deep cuts in Defense spending and a bucket of new tax revenue. He understands that his compliant media will blame his opponents for any negative consequences of going over the “cliff”, so he has little political risk.  Once we’ve passed the cliff, he can pivot from arguing to raise taxes on the wealthy to campaigning for a broad middle class tax cut. He could be almost Reagan-esque. 

What Obama does want, however, is a hike in the debt ceiling. The statutory limit on government borrowing is the only thing that stands in the way of his vision of an ever-expanding government. He needs an increase in, or even elimination of, the debt ceiling by sometime in March. Everything he does in the “cliff” talks is designed to increase his leverage in the debt ceiling fight. To Obama, “The Fiscal Cliff” is Summer Stock and he has his eyes on Broadway. 

Speaker Boehner. The titular leader of the GOP in DC, Speaker Boehner is desperate for any kind of deal. Boehner is a consummate legislator. That’s a neutral statement, not a judgement. He is preternaturally wired to cut a deal. He would like “the deal” to be based largely on conservative principles, but he won’t let any specific principle sacrifice “the deal.” Like most in the DC GOP, Boehner cowers to the media, rather than rebel against it. He is the weak link in the negotiating chain for conservatives. 

Boehner’s principal goal going into the weekend is to preserve his power. His “Plan B” gamble back-fired, both in the media and within his caucus. There are questions about his leadership and his strategic ability to advance the party’s interests. While no challenger has publicly stepped forward to challenge Boehner for the Speakership, the growing movement to conduct the election by secret ballot makes him vulnerable. Boehner simply wants to survive the weekend without another misstep and get reelected Speaker on January 3rd. 

House Minority Leader Pelosi. Who?

Senate Majority Leader Reid. Reid’s principal goal–every day and at all times–is to preserve his majority in the Senate. His shifting positions on issues makes Mitt Romney look like Winston Churchill. He has been for and against abortion, guns, spending cuts, filibuster reform, wars and tax cuts. In 2014, Democrats in the Senate face another near-death experience, when they will be forced to defend far more seats than the GOP. They will be defending seats in 14 slight-to-deep red states. He will not allow any vote on any bill that could jeopardize these members. Remember that Reid hasn’t allowed a vote on a budget in four years, encompassing two election cycles where Democrats were vulnerable. He will attempt to be open to a deal without every getting around to offering one. 

Senate Minority Leader McConnell. As they say on the Hill, McConnell is “in cycle,” meaning he is up for reelection in 2014. He isn’t so much worried about the general election–Ashley Judd, seriously?–as he is about a primary. In 2010, insurgent Rand Paul defeated his hand-picked choice to replace the retiring Jim Bunning. Rand’s victory casts a shadow over McConnell and will likely convert him into a stalwart champion of conservative principles. Almost none of his members up for reelection in 2014 are vulnerable in the general election, but could be weak against a robust primary challenge. As a result, a sizable chunk of the GOP caucus in the Senate, including Leader McConnell, will likely reject any “deal.”

This is our cast of characters. This afternoon is Act I. I’ll cover the three other Acts as they unfold over the weekend. But, I would get your skis ready, because we are going over the cliff. 

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