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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  • Comment number 348.

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

  • rate this

    Comment number 347.

    Once again Mr. Mardell has got it wrong.

    Whatever deal could be reached between now and the first of the year would inevitably be viewed as a tax increase by the Republican Party, and it would be for the top 1 or 2 percent. If instead they can manage to wait until we are off the cliff but not yet landed, that is within the first week or two, then any vote will be a tax break. So, no deal.

  • rate this

    Comment number 346.

    It's a win win for Mr. Obama. If we "go over the cliff", he will get all the money he wants while posing as one who wishes to protect the middle class. If he gets his deal, he will accomplish his political goal of getting more tax out of the rich. His coup, however, will have been to damage the Republican party forever.

  • Comment number 345.

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

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    Comment number 344.

    Absolutely right. He wants to seal the death of the Republican party. I have seen this coming from far off. He never really wanted to negotiated since he was in a win win situation so far as he was concerned. As for the suffering we all will experience if we are pushed over this cliff, this man could care less.

  • rate this

    Comment number 343.

    What all the news media except Fox News will not tell you is Obama wants the ability from congress to raise the debt ceiling any time and every how much he wants to.

  • rate this

    Comment number 342.

    It's always great to see the brilliant economists in the BBC comments. "Deregulated banks?" The US has very regulated banks under the Federal Reserve System. It's unfathomable to think that the Federal Reserve was ignorant of all of the dealings of the bank. But instead of auditing or questioning the Fed, who's sole job is to prevent the crisis it created, we blame every other reason.

  • rate this

    Comment number 341.

    Correct. Voters will know who is responsible for their tax hikes if no deal is reached. Who would have thought - a Democrat beating Republicans at their own game? I never doubted Mr President but many under-estimate him.

  • rate this

    Comment number 340.

    The elected officials are to represent their constituencies wishes. Thus if 0.2% do not want a tax rise, what about the other 46.8% (according to Mitt) of their own party, that shall be unaffected by this tax rise?

    Thus the Republican party is a dictatorship of 0.2% not a democratic party.

  • rate this

    Comment number 339.

    The American Military is the largest in the world by a long shot, we also have a very large economy & a very skilled, innovated work force which mainly is comprised of the Middle Class that has seen flat incomes for 30 years & witnessed the GOP's reckless wars that we are still fighting
    GOP audacity to put it all on the credit card & do not forget the 2008 meltdown
    Deregulated banks & WW mkt crash

  • Comment number 338.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this

    Comment number 337.

    Remember that the budget was pretty much under control when Clinton was president. Then the Bush tax cuts were made in an attempt to buy Republican votes with borrowed money -- the numbers never did balance which is why they made the tax cuts expire after ten years -- to fake "balanced". Then Bush started two wars without telling the American public to tighten their belts and pay more taxes.

  • rate this

    Comment number 336.

    #330 : I know the stance is pretty hard line for an Ex Limey, but we are seen as the world's police force, and we simply cannot afford to keep it up! I know you are all capable of taking care of yourselves, you are proving that in Afghanistan, there are so many nations in the UN that prevent it from policing itself without the US being involved
    Why do they look to U$A?
    Big Guns and planes & ships!

  • rate this

    Comment number 335.

    Okay I have gone through and read every single comment on here. I am wondering what would have happened if the case were that we weren't giving the upper income people money to outsource jobs to other countries. Like what if the only people getting tax breaks were those that didn't outsource any production jobs? Something like: "You want the break, then you actually use it to expand our economy"

  • rate this

    Comment number 334.

    “… If Obama plays is cards right he will be president for over a decade at least.”
    Maybe he's predicting that BO, will take the US into a world conflict and remain sitting President for its duration like FDR. Weve a resident Nostradamus here

  • Comment number 333.

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

  • rate this

    Comment number 332.

    Our debt has increased by 6 trillion (that's 6 billion billion to you Brits) under Mr. Obama, with no benefit whatsoever. The course must change. Don't demonize those who say no more. The 'fiscal cliff' is an illusion. A short term comprise is a political waffle. Stop the whining about military spending. Stop the cr*p about benefits. Economic growth is the answer, and that means low taxes.

  • rate this

    Comment number 331.

    #324 - Grover Norquist is the man that had a dream at age nine or ten that told him to "redefine" America into his vision of the U$A
    He made all GOP members sign the "No Tax Increases" pledge to which he hold the hostage with threats of taking away their funding !

    Ah, yes the Hitler wannabe !

  • rate this

    Comment number 330.

    323. Looney Limey

    Enough of the unsustainable expense of protecting the EU

    Speaking as a Scot in the EU I wholly agree. We are independent, proud, sovereign nations. We should not - and do not - require "protecting". We should have - and have - the guts and sense of responsibility to do that for ourselves

  • rate this

    Comment number 329.

    The GOP doesn't represent us disabled veterans either. We're part of the 47%. We should have come home with or on our shields, not disabled. But Romney's 47% remark was only twice as egregious as Obama's campaign secretary saying that the Dems did not view we non-religious as a constituency (only 20%, bigger than any minority group). Of course, the GOP doesn't either and hasn't for a long time.


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