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If Obama and Republicans can’t reach deal on fiscal cliff, we all pay

President Barack Obamtalks with House Speaker John Boehner Ohio Capitol Hill WashingtTuesday March 20 2012 after attending St. Patrick's Day

President Barack Obama talks with House Speaker John Boehner of Ohio on Capitol Hill in Washington, Tuesday, March 20, 2012, after attending a St. Patrick's Day luncheon with Irish Prime Minister Enda Kenny. (AP Photo/Pablo Martinez Monsivais)

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Updated: December 12, 2012 6:46AM



President Barack Obama, his spine fortified by his re-election, is setting the stage for blaming Republicans for raising your taxes, as Congress returns to work Tuesday — racing a Dec. 31 deadline to avoid falling off of a “fiscal cliff.”

What’s your preference: (A) a federal tax hike for everybody, or (B) a boost for only those people who make more than $250,000-a-year — that’s about 2 percent of Americans.

Obama is betting that most people will pick (B) as he spoke out Friday for the first time since he won his second term about the looming “fiscal cliff” battle with House Republicans over taxes and spending in the lame-duck session.

Here’s the situation: If Congress does not act, the tax rate hikes and major spending cuts automatically take effect on Jan. 1. This ticking fiscal time bomb was put in the Budget Control Act of 2011 after lawmakers could not agree on a deficit-reduction plan. In short, they built a potential outcome no one wanted — on the theory that this bad public policy would force compromise.

Bush-era tax cuts that we all get will expire Dec. 31. Obama went along with extending these tax breaks in 2010 — and disappointed Democrats because he flinched when it came to having the wealthy pay more.

Now, with a second term clinched, Obama is telling House Republicans, led by House Speaker John Boehner (R-Ohio) that this time, he won’t back down.

I could almost hear the Tom Petty song with that title playing in the background when on Friday Obama made a short statement about the upcoming fiscal battles.

Keep in mind that Obama campaigned for re-election on having the wealthy pay more. He was absolutely explicit on this. He made this a point in almost every campaign speech. Mitt Romney was against, Obama was for having the wealthy pay more.

The Obama strategy that became clearer on Friday is this: Obama is trying to delink the fate of the tax cuts that expire Dec. 31 from negotiations over a broader deficit-reduction package. He wants to safeguard first the existing tax breaks for earners below $250,000.

“Right now if Congress fails to come to an agreement on an overall deficit-reduction package by the end of the year, everybody’s taxes will automatically go up on January 1st — everybody’s, including the 98 percent of Americans who make less than $250,000 a year,” Obama said.

“And that makes no sense. It would be bad for the economy and it would hit families that are already struggling to make ends meet. Unfortunately, we shouldn’t need long negotiations or drama to solve that part of the problem. While there may be disagreement in Congress over whether or not to raise taxes on folks making over $250,000 a year, nobody — not Republicans, not Democrats — want taxes to go up for folks making under $250,000 a year.”

Boehner and other Republicans say they don’t want taxes to increase for anybody — no matter their income — but may be open to other ways to raise more revenue.

Rep. Peter Roskam (R-Ill.) is a member of the GOP leadership team looking for a way off the fiscal cliff.

I asked him how he interpreted Obama’s win — if his stump speech call for the wealthy to pay more and share the burden was a mandate.

“The president has said a lot of things. He said he was going to close Guantanamo,” Roskam said, referring to one of Obama’s most famous first-term broken promises.

“ . . . I look at it as just another thing that the president said. Because it certainly is not a mandate to raise taxes. Because if that was true, Nancy Pelosi would be the next speaker of the House,” Roskam said.

After all, just as Obama was re-elected — so was the anti-tax rate hike House majority, Roskam noted.

Let’s put aside the matter of who has a mandate and just look at how this may play out:

Obama is betting his populist position will look more bipartisan and reasonable. He wants to sign a bill giving the GOP almost all but 2 percent of what it wants: letting 98 percent of us keep our tax breaks.



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