Congressional Democrats began digging in their heels this week over tax hikes and deep spending cuts due to hit at year's end. Sen. Patty Murray, a powerful Democrat from Washington state, said Monday that her party is prepared to let the country go off the so-called fiscal cliff unless Republicans agree to raise tax rates for the wealthiest Americans. Republicans want to extend Bush-era tax cuts for everyone, while President Obama wants to raise rates for people making more than $250,000, and other Democrats want to set the threshold at $1 million. Economists warn that the fragile recovery will crumble if the tax cuts expire just as automatic spending cuts outlined in last year's debt-reduction deal take effect. Is this a bad time for Democrats to play hardball?
Yes. Democrats — and everyone else — will pay a high price: Democrats might regret their tough talk, says Jeanne Sahadi at CNN. The two parties will probably work out a temporary fix by year's end, but this high-stakes political game of chicken is already "becoming a problem for the economy." It's part of why defense contractors, who'll be especially hard hit by the $110 billion in 2013 spending cuts, are freezing hiring and preparing pink slips. Uncertainty will also "cause tumult in the stock market" at the worst possible time.
"Fiscal cliff fight is on, and economy suffers"
Actually, Americans will blame Republicans if disaster comes: There's one excellent reason for Democrats to stick to their guns, says Chris Cillizza at The Washington Post: "The public is on their side." In a new Pew Research Center poll, political independents, by more than a 2-to-1 margin, said "ending the tax cuts would be helpful to the economy." If Republicans hold out to protect millionaires and Congress plunges off the cliff, "Obama and Democrats are well positioned to win."
"Why Democrats are willing to walk off the fiscal cliff"
Nobody wins without a compromise: Neither side wants to look weak by giving in before the November election, says Gatehouse News Service in an editorial. But the "political train wreck" we face if Democrats and Republicans can't make a deal after that could be disastrous for the economy. Obama should follow up his proposal to end the tax cuts for those making more than $250,000 with cuts on spending and entitlements, and Republican challenger Mitt Romney should identify the tax loopholes he'd close to save money. Refusing to make a good-faith effort is not an option.
"Obama, Romney must face the fiscal cliff"
Other stories from this topic:
- The Bullpen: Obama's plan isn't a tax cut at all
- In-depth briefing: Countdown to Taxmageddon
- The Bullpen: Washington's Daft Punk justification for wasteful military spending