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GOP 'fiscal cliff' endgame: Let big government sting the middle class?

For some tea party Republicans, part of the political calculation ahead of the 2014 elections is whether going off the fiscal cliff would spell political disaster or instead be seen as a return to principled governance.

By Staff writer / December 29, 2012

A police officer stands guard outside the U.S. Capitol in Washington Friday. President Barack Obama and congressional leaders agreed to make a final effort to prevent the United States from going over the "fiscal cliff," setting off intense bargaining over Americans' tax rates as a New Year's Eve deadline looms.

Mary Calvert/REUTERS

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If President Obama and Congressional leaders fail to avert the “fiscal cliff” of scheduled tax increases and spending cuts by 12:01 a.m. Tuesday, America’s 114-millon-strong middle class will take it hard on the chin – a $3,500 tax blow per family, on average.

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Politicians make careers out of protecting the middle class, which is why the President has focused his solution on raising taxes just for richer Americans – those making $250,000 and more – while warning Americans in his weekly Saturday address that, “Every American’s paycheck will get a lot smaller” if the fiscal cliff isn’t averted, which specifically “would hurt middle class families.”

Republican leadership, too, has been forced into a corner, in part by Obama as well as the party’s own right wing, as members have failed to come to agreement over agreeing to some tax concessions for the rich in order to stave off what amounts to a wholesale middle class tax hike.

For some intractable Republican House members, political experts say, part of the political calculation ahead of the 2014 mid-term elections is whether going off the fiscal cliff would spell political disaster or whether it may be seen more broadly as a return to what many see as principled governance.

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As Wall Street indices got jittery on Friday, it began to look like some kind of piecemeal deal that would include a tax compromise and extension of unemployment benefits could be done by the drop-dead deadline, but it could be contingent on Republicans having to come back to fight for spending cuts at a later date.

That development puts the spotlight straight back on the kind of anti-tax, anti-spend tea party principles that helped to give the GOP the House in 2010, but which also left the party deeply fractured after Obama’s reelection this November.

To be sure, there may be a deeper logic than simple obstructionism at play within the GOP caucus, where some members, the theory goes, may be seeing an opportunity to avoid direct blame for a major middle class tax hike while making a deeper point about how America should be governed. How? By letting middle-class Americans start bearing the actual cost of electing a progressive president and a Democratic Senate, neither of which has seriously addressed entitlement spending.

“How can we expect people to care about the growth of government if it doesn’t cost them anything?” writes Marc Thiessen, a fellow with the American Enterprise Institute, in a Saturday Washington Post column. “Big government is great if you don’t have to pay for it. Well, now it’s time to pay the bill. Maybe when the costs of the stimulus, Obamacare and exploding entitlements are finally deducted from their paychecks, Americans will rediscover the virtue of smaller government.”

Liberals point to a counter-logic that they contend will drive even tea party Republicans to strike a last-minute deal to avoid the fiscal cliff.

“If the deal is reached … the Republicans have won: they have locked in a federal tax system that collects so little total federal revenue that government can afford almost nothing aside from the military, interest payments, retirement programs and health care,” writes Jeffrey Sachs, author of “The Price of Civilization,” on the Huffington Post.

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