Despite all the posing and polarization of recent weeks, everyone in Washington knows that Republicans and Democrats will reach some big agreement on tax rates within the next four or five months. So if compromise is ultimately inevitable, why wouldn’t President Obama take the lead in brokering that deal before the election, grabbing credit for averting disaster and saving the country from plunging over the dreaded “fiscal cliff”?
The question becomes even more pointed in light of the president’s experience in December 2010, when he enjoyed a sharp bump in public approval ratings after he joined congressional Republicans and Democrats in extending Bush-era tax rates for another two years. Though he condemned GOP tactics as “hostage taking,” he won applause from nearly every quarter for sparing the economy the shock of a sharp tax hike when the recovery remained fragile and tentative.
That recovery looks even more feeble today—with GDP growth projected by the Federal Reserve as less than 2 percent for all of 2012, compared to 4.2 percent in 2010. Why, then, would the president insist on subjecting the American people to the same automatic and disastrous across-the-board tax hikes he acted to avoid two years ago, rather than acceding to the one-year tax freeze for everyone that the Republicans demand?
And why wouldn’t the president act immediately to distance himself from extraordinary remarks by one of his chief congressional allies, Sen. Patty Murray of Washington, who blithely declared that she and her colleagues would continue to block any resolution of the deadlock until after higher tax rates for every household mechanically kick in on Jan. 1, 2013? In an address to the Brookings Institution—an address which John McCain denounced on my radio show as “one of the most irresponsible speeches I’ve ever heard in this town, and I’ve heard a lot!”—Senator Murray announced, “I will absolutely continue this debate into 2013.” Never mind that numbers from the Tax Policy Center of that same Brookings Institution show a median-income family immediately facing more than $1,700 a year in additional tax payments, or that both Ben Bernanke and the Congressional Budget Office have warned repeatedly that this huge, instantaneous withdrawal of money from the private economy would almost certainly push the nation toward a new recession. Senator Murray promises she’s willing to take the risk because of the perceived likelihood that the widespread suffering could enable her to score ideological points against her Republican opponents.