President Obama heads to suburban Philadelphia Friday for a campaign-style appearance at a toy factory, aimed at making the Republicans look like Scrooge: Vote to extend the Bush-era tax cuts on everyone but the most wealthy, or you will ruin Christmas.
Specifically, the argument goes, middle-class Americans need certainty that their taxes won’t go up in the new year, so they can shop for the holidays – a boon to business and thus the nation’s consumer-based economy.
Mr. Obama speaks at noon Eastern time at the Rodon Group manufacturing facility in Hatfield, Pa., which makes such toys as K’NEX and Tinkertoys. Rodon and K’NEX Brands are third-generation family businesses that depend on middle-class consumers during the holidays, the White House says.
“Today in Pennsylvania, expect President Obama to make clear that any deal reached with Congress must ask the wealthiest to pay higher tax rates,” a White House official said in a statement. “The president will be clear that the House needs to follow the Senate's lead and act so that 98 percent of Americans don’t see their taxes go up at the end of the year – and he will call on congressional Republicans to stop holding the middle-class tax cuts hostage simply because they refuse to let tax rates go up for the wealthiest Americans.”
But there’s a problem with the Obama administration’s argument on the need to act fast: The chances of an early agreement are zero to none. The nature of high-stakes negotiations is such that each side needs to show its constituents that it has held out as long as possible to fight for the best possible deal.
Since Thursday, when Obama’s representatives went to Capitol Hill and presented an offer that Republican leaders called unserious, a deal has seemed as remote as ever.
According to Republicans, the White House plan included these provisions: almost $1.6 trillion in new tax revenue over the next decade, a position that is way beyond acceptable to the GOP; a deferral of across-the-board cuts in discretionary spending; $400 billion in savings from entitlement programs to be determined later; $50 billion in stimulus spending on infrastructure; and an increase in the debt ceiling.
Obama’s wish list showed no hint of compromise, angering Republicans, who say they’ve shown a willingness to deal by allowing for higher government revenues.
If agreement on $607 billion in scheduled tax increases and spending cuts is not reached by Jan. 1, the nation will go over a so-called "fiscal cliff," sending the economy toward almost-certain recession.
After meeting Thursday with Treasury Secretary Timothy Geithner, Speaker Boehner said “no serious progress” had been made in the negotiations and called on the White House to “get serious.” In his remarks to reporters, he also criticized Obama for holding “campaign-style rallies” instead of negotiating.
To keep the discussion moving, Boehner said, Obama needs to put specific spending cuts on the table.
But time is on Obama’s side, which is why the “don’t hurt Christmas” argument raises eyebrows. Polls show the public supports Obama’s position – allow taxes to rise just on the wealthy – over the Republican desire to maintain all the Bush-era tax cuts.
And if the nation does go over the fiscal cliff, at least temporarily, that also works to Obama’s benefit: Starting Jan. 1, everyone’s taxes would go up. Democrats would introduce legislation cutting taxes on all but the wealthiest taxpayers, putting the Republicans in a no-win situation. Either they go along with the tax cuts, handing Obama a victory, or they vote against them, allowing Democrats to claim the Republicans oppose middle-class tax cuts.