Why they want to go over the cliff
Washington's Democratic and Republican power brokers have sent the message to the nation that going over the fiscal cliff is a worst-case scenario. But they're not acting that way, not at all.
Instead, many of them have calculated that it's better to go over the cliff -- at least temporarily -- than swallow a raw deal.
For many Republicans, a cliff dive means blaming President Barack Obama for a big tax hike in the short term and then voting to cut taxes for most Americans next month. That's an easier sell back home in Republican-heavy districts than a pre-cliff deal that raises taxes on folks making over $250,000 or $400,000, extends unemployment benefits and does little if anything to curb entitlement spending. If they back a bad deal now, they run the risk of facing primary challenges in two years.
For Democrats, the cliff is better than setting a rich man's cutoff in the million-dollar range -- or worse yet, extending the Bush tax cuts for all earners -- and slashing Medicare and Social Security to appease Republicans. They, too, see an advantage in negotiating with Republicans who will feel freed from their promise not to vote to raise taxes once the rates have already gone up.
Plus, Obama's polling in the mid-50s on his handling of the fiscal cliff situation, according to Gallup. Republicans are mired in the 20s. Why cave to the GOP when the president is winning?
In this way, what seems like the height of irresponsibility can be explained rationally.
There's still time for the dynamic to shift. Obama invited House and Senate leaders from both parties to the White House for a Friday meeting, a last-ditch effort to find common ground. But House Speaker John Boehner's office took the wind out of Obama's sails nearly as soon as the White House announced the mini-conference.
Boehner "will continue to stress that the House has already passed legislation to avert the entire fiscal cliff and now the Senate must act," his spokesman, Brendan Buck, said in a statement emailed to reporters.
Short of getting exactly what they want, Washington's political leaders appear content to avoid what they fear politically and on policy grounds -- losing. That's why, despite all the bluster, most folks in the nation's capital now believe it's more likely than not that the Bush tax cuts will expire and the automatic cuts known as sequestration -- $1.2 trillion over a decade -- will be set in motion come January.
"[I]t looks like that's where we're headed," Senate Majority Leader Harry Reid said on the Senate floor Wednesday.
"It's a classic three-way standoff," said one senior House Republican. "Boehner took a crack at breaking the logjam but to no avail. Now it's in the Senate's court. It seems the least bad route for all sides is on the other side of Jan. 1."
Another analogy: It's a Nash equilibrium. John Nash, subject of "A Beautiful Mind," the Oscar-winning film that revolved around game theory, explained how players act in a multiplayer game. Put simply, if each player understands his adversaries' strategies, no one will alter their own course. Right now, Obama, Boehner and Reid are locked in on a course for the cliff, and there's no obvious solution that would make any of them switch directions.
If a new path can be found that is more attractive to House Republicans, Senate Democrats and Obama than the spending cuts and tax hikes due to take effect in a few days, they may find their way out of the morass.
But for now, the political game is about optics.
Obama cut short his annual Christmas vacation in Hawaii on Thursday to be in Washington in case there's a deal to be cut. Boehner announced the same day that the House would be back in session on Sunday, possibly through Jan. 3, when the current Congress ends and the new one is sworn in. If they go over the cliff, they'll do it together. But it won't be some happy Thelma-and-Louise-style climax.
None of them want to take the blame if Washington proves dysfunctional yet again. Rather than negotiating in private, they've been castigating in public. Republicans say Democrats want to go over the cliff. Democrats say Republicans, specifically Boehner, are putting their own political security ahead of the national interest.
"Republicans bent over backwards," Senate Minority Leader Mitch McConnell said on the Senate floor Thursday. "We stepped way out of our comfort zone. We wanted an agreement. But we had no takers. The phone never rang. And so now, here we are, five days from the new year, and we might finally start talking."
Reid ripped into Boehner and McConnell on Thursday, prodding them to make concessions.
"Nothing can move forward in regards to our budget crisis unless Speaker Boehner and Leader McConnell are willing to participate in coming up with a bipartisan plan," he said. "Speaker Boehner is unwilling to negotiate, and we have not heard a word from Leader McConnell. Nothing is happening."
Obama made a round of calls to congressional leaders in both chambers and both parties on Wednesday night but did not report any progress.
Republicans say it's Reid who won't come to the table.
McConnell is "happy to review what the president has in mind, but to date, the Senate Democratic majority has not put forward a plan," said his spokesman, Don Stewart. The president's was the first call McConnell received from a Democrat on the fiscal cliff since Thanksgiving, Stewart said.
It's not at all clear that Reid has enough votes in his own caucus to move forward with the kind of bipartisan plan that McConnell and Boehner could sign off on -- or at least give tacit approval to. Boehner's effort to present a Plan B bill failed in the House last week. He was unable to muster enough Republican support to feel comfortable with a vote on a bill that would have let taxes go up on millionaires.
Democrats say Republican leaders will be able to accept a hike in tax rates for the wealthiest if they don't have to vote for it before the end of the year. Boehner tried last week to pass a Plan B that would have allowed tax rates to rise on folks making more than $1 million a year but his caucus wouldn't allow him to bring the bill to the floor. Some Republicans fear the political backlash from their constituents if they do anything that could be construed as voting for a tax increase.
Even if Boehner believes that it's in his party's best interest to raise taxes on some Americans before the end of the year rather than exposing Republicans to blame if they go up on all taxpayers, his troops simply aren't with him. He has not taken up a Senate bill that would cut taxes for most Americans.
On Wednesday, he and his fellow House GOP leaders released a statement pushing Reid to act on one of two House bills that have been sent his way and move them back to the House.
"The House will take this action on whatever the Senate can pass, but the Senate first must act," they wrote. "The lines of communication remain open, and we will continue to work with our colleagues to avert the largest tax hike in American history, and to address the underlying problem, which is spending."
The lines of communication may remain open, but no one appears to be saying anything new.