Fiscal cliff: Barack Obama's trap for Republicans

US President Barack Obama (28 Dec) President Obama's purpose is political, not fiscal

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America's reckless politicians may still take the country over the cliff into an uncertain land where recession looms.

But President Obama has sprung his trap. The Republicans are in a corner - over a barrel - although perilously unaware of their plight. Before the election, during the election and since his victory, he has insisted the rich must pay a little more in taxes. It is a policy that appeals to his party but doesn't really make much of an economic impact. But its purpose is political, not fiscal.

He has announced his fallback position. If there is no bipartisan deal by the leaders of the Senate, he will get Democrats to introduce a minimalist bill. It would be, Mr Obama said in his weekly address, an "up-or-down vote on a basic package that protects the middle class from an income tax hike, extends vital unemployment insurance for Americans looking for a job, and lays the groundwork for future progress on more economic growth and deficit reduction".

If Republicans vote it down, they will be directly voting to bring in a tax rise on "ordinary Americans".

I'll say it again. Republicans are voting for a tax rise on most people.

It is a powerful incentive to reach a better deal. Some Republicans will glory in sticking to their principles and know the folks back home may agree with them - the rich should have tax cuts too, that it is a matter of principle.

But enough may realise that Mr Obama is manoeuvring to stick their party in aspic and stop them changing in the wake of their defeat in November. He would stick a label on them that would brand them not only out of touch, but so fanatically wedded to the demands of the rich that they are unconcerned about the damage they could do to their country and its people.

It could turn out differently, but I suspect the Republicans are either about to cave in or to lose the blame game.

Mark Mardell Article written by Mark Mardell Mark Mardell Presenter, The World This Weekend

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  • rate this

    Comment number 328.

    Austerity anyone? Americans at some point is going to come to turns that pain is just around the corner, that's when the Chinese become the number one economy.

    The irony of all this is that the great US of A was slating the EU for it's hesitancy dealing with the Euro and Greece etc..

  • rate this

    Comment number 327.

    Ah another reference to that demon 'Obamacare' That perennial American grump about the concept of a health free for all. For decades that most Christian of societies America has had the warm glow of satisfaction watching those poor to afford health care, not now!! Of course its probably caused your fiscal cliff, lets face it you blame it for everything else.

  • Comment number 326.

    All this user's posts have been removed.Why?

  • rate this

    Comment number 325.

    Should one enter into a fiscal trap or avoid it?. Were the traps setter's intentions benevolent?

  • rate this

    Comment number 324.

    305:Just because a Democrat is for a plan does not mean that a Republican is against it.
    --- ---
    Actually yes. That was the strategy after the President was elected in 2008. They reached agreement on the milk cliff 4 hrs ago, the bill won't be voted before Jan 1. $8gal milk immediately after. Ranchers here in Nebraska now realise who the party they voted for represents (Grover Norquist, not them).

  • rate this

    Comment number 323.

    I will be happy with a couple of days floating in the air then "Cut taxes for those earning 250k and under and let all the cuts to military spending go into effect with no reduction in personnel
    Enough of the unsustainable expense of protecting the EU from Extremists when that is the pervue of the UN
    The USA middle class has suffered long enough
    from military expenditures overseas & not US soil

  • rate this

    Comment number 322.

    #319 Dana Blankenhorn
    I agree. There will be no vote this year on any fiscal cliff package.

  • rate this

    Comment number 321.

    "The public wants the truth". Well, here it is. The fiscal cliff is a catchphrase invented for media consumption. It has no medium or long-term meaning or effect. It's main influence is on the volatility of the stock market. Anybody with half a brain and a few stocks could easily make 15% with no risk over this week, by which time a genuine compromise will be reached. That's the truth of it!

  • rate this

    Comment number 320.

    Mark Mardell has mastered the art of self-deception. The only trap Obama has sprung, was for the American people, when he promised us what we cannot pay for, such as Obama Care! We have heard the lie before that increasing the taxes on the rich would pay for Obama care, and yet half of us face new taxes in 2013 under Obama Care. Tell me, where are the Democrat's spending cuts? Always mañana!

  • rate this

    Comment number 319.

    The House won't vote for the President's bill. Boehner won't schedule a vote that would put his party's head in the noose. And McConnell would filibuster such a bill in the Senate.

    There will be no votes, and both sides will point fingers at one another. Then they'll do a deal later in the week that "cuts taxes" -- remember "the cliff" is deficit reduction, higher taxes, less spending.

  • rate this

    Comment number 318.

    I gather there is now no expectation of any fiscal cliff package being placed before the Senate today. They are going to sleep on it and see if they can bring anything forward to the Senate at 11:00 tomorrow (local time).

  • rate this

    Comment number 317.

    #305 - That was in the good old days when the political parties were actually representing the people
    Now the GOP has been taken over by extreme factions that form a minority that presumes to dictate to the majority

    Not unlike the Extreme Politicians in Egypt co-opting the hope for democracy with denial of equal rights for all!

    Different names and context

    But Extremists that represent the few!

  • rate this

    Comment number 316.

    More "unbiased" commentary from the Comrades at BBC.

    The previous head of BBC went to the New York Times;

    how unexpected was that.

  • rate this

    Comment number 315.

    #304 Obama is absolutely right - he's asking a very small minority of very wealthy American's
    He is wrong because he does understand the economy but what about the riaises he just gave to govt workers what about them paying their fair share like their salaries cut at least in half.Where is their sacrfice?

  • Comment number 314.

    All this user's posts have been removed.Why?

  • rate this

    Comment number 313.

    Dubya Bush produced a $5 TRILLION DEFICIT. Why shouldn't the rich pay for it?

  • rate this

    Comment number 312.

    our media blames 'both sides" Not true. The Democrats have tried to deal with the GOP. The GOP won't budge from not raising taxes on the wealthiest top%. The "both sides are to blame", is confusing the public. we need to know the truth, instead of media that wants to Seem unbiased..

  • rate this

    Comment number 311.

    #306 - The U$A economy is very dynamic & is capable of recovering from the devastation of the banks & the GOP Extremists
    It is simply a matter of dealing with them for two more years & then voting them out!
    We have managed to survive & grow a little for the past two that the
    House has been deadlocked by these extreme GOP factions

    Two more years is unnecessary suffering for the majority

    Go U$A !

  • rate this

    Comment number 310.

    The republicans have refused to co-operate with president Obama on Anything! They put politics over the good of the nation
    and it's people.
    All of our media say "both sides are to blame"This is false. The Democrats have done all of the moving and the republicans refuse to move at all from their pandering to the wealthiest 2%.
    Our media is confusing people blaming "both sides". the GOP is nuts.

  • rate this

    Comment number 309.

    At least the Americans do not have the Albatros of the EU strung round their necks. Britain will n ot recover finantially while the EU takes Billions of Pounds and gives nothing back except more immigration. Britian pays more net into the dying EU than than even Germany, that is why Rumpy is worried about us leaving.


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