Fiscal Cliff Battle: Winners and Losers

Fiscal Cliff : While much of the country is mired in snowstorms across the nation’s midsection and in Pennsylvania and New England, the nation’s capital is bogged down in Congress’ efforts to avoid skidding off the fiscal cliff.

President Obama and the Senate came back to Washington on Thursday to try to come up with a compromise to avoid automatic tax increases and potentially debilitating across-the-board budget cuts.

House Republicans rejected a compromise—Plan B—proposed by House Speaker John Boehner (Ohio), leaving his leadership in doubt as they headed home for winter recess. That dumped efforts to find a resolution in the collective lap of the Senate, but Majority Leader Harry Reid (D-Nev.) and Minority Leader Mitch McConnell (R-Ky.) had not met or even spoken since leaving town for the Christmas break, according to The Washington Post.

Ever since the election, Republicans have continued to play chicken with the president, assuming they can make him blink first—even after Americans indicated through election results and in polling that they wanted compromise and a quick resolution.

Initially, Republican leaders indicated that they would have to give some on tax increases for higher income Americans, but within days there was an indication that the GOP was going to renege on that promise.

A journalist friend who covers Congress said the Republicans have underestimated Obama and his insistence that there be some sort of tax increase on the affluent. While he was willing to raise the definition of high-income to somewhere in the $400,000 range, rather than $250,000, the president wasn’t interested in going much further.

The GOP is refusing to recognize that many Americans will hold the party responsible if a deal is not reached and that Obama is dealing from a position of strength. “They also don’t realize Obama grew a third testicle after the election,” my friend said.

The bottom line is that as much as the cuts and tax increases hurt, they will bring in the revenue the country needs. Obama can do nothing, let it all go into effect, get the money and let Americans be angry at the Republicans.

This scenario reminds me of covering a school strike when I was a young reporter. While the employees were out, they didn’t get paid. The money that the school district would have paid them sat in accounts bringing in interest. By the time the dispute was settled, the school district had earned enough money to give the teachers the raise they demanded in the first year and even pay it retroactively simply by letting the teachers walk out.

Meanwhile, parents angry they had been left in the lurch, scrambling to find alternatives for their children after the school year had already started, blamed the teachers union for being greedy. No one thought about the administration actually letting the strike happen as part of its financial strategy.

Sen. John Barrasso (R-Wyo.), the chairman of the Republican policy committee, told Fox News Sunday that he believed that Obama wanted negotiations to fall apart.

“I believe the president is eager to go over the cliff for political purposes,” Barrasso said. “I think he sees a political victory at the bottom of the cliff: He gets all this additional tax revenue for new programs, he gets to cut the military, which Democrats have been calling for for years, and he gets to blame Republicans for it.”

Senate Minority Leader McConnell, in a last-ditch shot across the bow, accused the Democrats of attacking Republican plans because the Dems don’t have a plan of their own and that the GOP won’t vote for tax increases without spending cuts.

So the GOP may be forced to blink. If they settle, Obama wins; if they don’t, he still wins.

What America wins remains to be seen.

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.”

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