President Obama made one thing crystal clear during his re-election campaign: He wants to raise taxes on those earning more than $250,000 a year to help close the yawning budget deficit. And a majority of Americans endorse the idea, strengthening Obama's hand as he squares off with Speaker John Boehner to hammer out a budget deal and avoid sending the nation over the "fiscal cliff" at the end of 2012, when the Bush tax cuts expire and a slate of automatic spending cuts take effect. The Republican Party boasted a primary field in which not a single candidate said he would accept even one dollar of tax hikes for each ten dollars of spending cuts — but now, Senate Minority Leader Mitch McConnell has floated the idea of a one-to-one ratio between tax hikes and entitlement program reforms. In another sign that the GOP is wavering, William Kristol, the influential editor of The Weekly Standard, admitted what liberals have long contended: "You know what?" Kristol told Fox News. "It won't kill the country if we raise taxes a little bit on millionaires." Is the GOP caving on raising taxes?
Yes. Republican opposition is crumbling: "For the first time in the Obama presidency, cracks have appeared in the wall of total opposition that has defined the Republican Party's approach," says Jonathan Chait at New York. "An Obama [victory] was always going to have enormous sway." Combine that with the possibility that all the Bush tax cuts could expire, and Republicans have created a "situation where Republican refusal to agree to a small or medium-sized tax hike would mean a huge tax hike." It's possible that GOP leaders could ignite a Tea Party revolt, but "at this early date, the basic Republican strategy toward Obama appears to be in flux."
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No. Republicans are more willing to go off the cliff: Liberals are overconfident that "they are about to win the coming tax fight in Congress," says Josh Barro at Bloomberg. "They're not." If the U.S. falls off the fiscal cliff, it "might well cause a new recession, which would be even more politically damaging for the Barack Obama administration than for congressional Republicans." The bottom line is that "Republicans are prepared to incur significant political costs to defend their position on the top tax rate issue, and Democrats cannot accept the economic damage that would from a major short-term tax increase."
It all depends on Obama: For Obama, the budget negotiations represent "a second chance to take command of the nation's policy debates and finally fulfill his promise to end gridlock in Washington," says Jackie Calmes at The New York Times. Obama has been unfairly characterized as an ineffective negotiator, and this time around he "will not simply hunker down [in the White House] for weeks of closed-door negotiations as he did in mid-2011, when partisan brinksmanship over raising the nation's debt limit damaged the economy and his political standing." Obama is already allying with business leaders, a core Republican constituency, to push a balanced deficit-reduction package. And the president is also planning "to rally public support" to remind the GOP that elections have consequences.
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