Geithner, Obama and economic advisers don't really want to go off the "cliff" on January 1. But their concern is about starting out the president's second term with a damn fiscal crisis -- and the "cliff" jump would make Wall Street nervous.
But the GOP would be in considerably more trouble, says John Cassidy.
On the G.O.P. side, the arguments for striking a deal are even stronger. If the Republicans hold out, taxes will go up for everybody on January 1st, and they will get the blame. And to what end? Come the new year, they would be in an even worse bind. The public would be outraged, the Democrats would immediately propose a bill reducing taxes for ninety-eight per cent of the population, and the Republicans would have little option but to sign on. From the perspective of Boehner and his Senate counterpart, Mitch McConnell, it makes much more sense to strike a deal this side of midnight on December 31st, when at least they have some leverage: the threat that unless the White House makes concessions they won’t be able to sell a deal to the anti-tax ultras in the House. ...John Cassidy, New Yorker
Not being able to "sell the deal" to their own party members looks to me like serious weakness. I'm not sure we shouldn't let them hang themselves. It could cost us a dip in the markets. But all-out panic? I doubt it.
And there's something else I might also question Cassidy's opinion about:
Once again, the really tough question—how to bring revenues and spending into line over the long term—would be deferred. That won’t be resolved until American voters accept that they can have lower taxes or higher spending on government programs, but not both simultaneously. And of that realization, there is still no sign. ...John Cassidy, New Yorker
I think the exit polls showed us something quite different. More Americans are listening beyond the shrieks of the media. They understand the tax/spend equation and have come to realize that we can straighten ourselves out pretty well without resorting to cliffs, concocted panics, or accepting austerity or -- most important -- depending on the Republican party.