Got Two Minutes to Hear the Truth on the Fiscal Cliff?
Jul 20, 2012 at 3:36 pm
My CBPP colleague Bob Greenstein explains — in under two minutes! — why, given the R’s refusal to countenance any new revenue in a budget deal, the correct strategy for D’s must be to go over the cliff. Or, more precisely, to start down the fiscal slope, ready to reverse course ASAP.
That’s not at all the way it should be. But it is the way it is.
One Response to “Got Two Minutes to Hear the Truth on the Fiscal Cliff?”
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About
Jared Bernstein’s areas of expertise include federal and state economic and fiscal policies, income inequality and mobility, trends in employment and earnings, international comparisons, and the analysis of financial and housing markets.
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Republicans have very compelling reasons to believe that Democrats will not push the envelope, but will instead compromise to the point of capitulation. They’ve done it before. That said, it matters less what Republicans believe than what Democrats actually do. Democrats have a weakness in this negotiation, and Republicans know it. That weakness? Some Democratic legislators actually care about the well-being of their most vulnerable constituents. Case in point is the pledge by the Progressive Caucus not to support healthcare reform without a public option.
The supposed countervailing weakness of the Republicans, that they care whether national war-making power will be decreased, really isn’t much of a weakness. Some Democrats are vulnerable on this issue as well — anyone see Joe Lieberman being moved by this argument? Anyone see a Republican counterpart concerned about impending cuts to, say, Food Stamps?
Finally, there is a complicated interplay between anticipated electoral success and willingness to negotiate as to the financial cliff. Whichever party seems likely to prevail in the elections ironically has a stronger incentive to compromise as to the financial cliff. They will, after all, have to deal with the aftermath of going over it. They will also take the political heat after the new year if we do go over that cliff.