Fiscal Cliff Fight: Which Side Will Blink First?

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If you think the results of the election will force Republicans, Wall Street, CEOs and lobbyists to play nice as the negotiations begin over pulling back from the so-called fiscal cliff, you’ve got another think coming.

First thing Sunday morning, while many folks were enjoying the last of the Thanksgiving break, pundits, business executives and lawmakers hit the news talk show circuit to express their willingness to make “major” concessions if the Obama administration was prepared to do the same.

And they were more than happy to spell out what concessions they would like in return.

For example, Sen. Lindsey Graham (R-S.C.) told ABC’s “This Week” that he would be willing to violate Grover Norquist’s pledge against tax increases and other steps to increase revenue in order to work out a deal with Democrats. Sort of.

‘‘I agree with Grover, we shouldn’t raise rates, but I think Grover is wrong when it comes to we can’t cap deductions and buy down debt,’’ Graham said on ABC’s ‘‘This Week.’’

“I will violate the pledge, long story short, for the good of the country, only if Democrats will do entitlement reform.’’

Norquist, founder of Americans for Tax Reform, opposes all tax increases, even during the fiscal cliff negotiations and many Republicans signed a pledge, vowing not to vote for tax increases of any kind.

Rep. Peter King (R-N.Y.) and Sen. Saxby Chambliss (R-Ga.), however, have both said Norquist’s pledge may have run its course.

Last week, Chambliss told WMAZ-TV in Macon, ‘‘I care more about my country than I do about a 20-year-old pledge.’’

But there are others talking a good game, while trying to stack the deck.

Some CEOs, for example, have been talking about sacrifices that will be needed to balance the budget while trying to protect themselves and their businesses from having to make any.

According to the Huffington Post, a group of CEOs, whose firms benefited handsomely from government monies, have joined a campaign sponsored by the Center for a Responsible Budget, which is expected to spend at least $30 million to get a deficit reduction deal passed in the lame-duck session of Congress.

The executives, who are working with the Center’s Campaign to Fix the Debt, have received “trillions in federal war contracts, subsidies and bailouts, as well as specialized tax breaks and loopholes that virtually eliminate the companies’ tax bills.”

And these CEOs plan to keep things that way, the Huffington Post reported, most notably by appearing on the media to argue that Medicare, Medicaid and Social Security, which mostly affect the poor and elderly, must be scaled back substantially.

The CEO Fiscal Leadership Council, for example, is seeking a “territorial tax system” that would exempt their firms’ foreign profits from taxes, which would save about $134 billion.

The article said the plan was laid out according to a new report from the Institute for Policy Studies titled “The CEO Campaign to ‘Fix’ the Debt: A Trojan Horse for Massive Corporate Tax Breaks.”

The catch is the CEOs aren’t buying into higher tax rates for their personal or corporate income. Instead, they say, changes should target “low-priority spending,” which is tied to the aforementioned programs that help support the poor, the elderly and those on fixed incomes.

By keeping as many of the breaks that already exist for business and the wealthy, it is difficult to see how this respects the voters who returned President Obama to office to finish the work he started in his first term, trying to get and keep the economy on sound footing and get more Americans back to work.

Some pundits have said if a deal doesn’t get done because too many caveats are built into a bill or amendments to current law, it will hurt the Republicans because they already are seen as out of touch with many average Americans. The party, the pundits have said, cannot afford to be seen as obstructionist or sore losers if they don’t appear to be negotiating with the administration in good faith.

It feels to some, however, that the message hasn’t really gotten through to the Republicans, and Democrats don’t feel pressured to budge.

Tax rates are set to rise automatically when the Bush tax cuts expire in January. So the revenue is coming in one way or the other—either by negotiation or by existing law.

The real question is, which side will blink first?

Jackie Jones, a journalist and journalism educator, is director of the career transformation firm Jones Coaching LLC and author of “Taking Care of the Business of You: 7 Days to Getting Your Career on Track.”

 

 

The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views, policies or position of Atlanta Black Star or its employees