Obama displays timidity in fiscal cliff negotiations

The fiscal bill that just passed the House has some good, liberal policies. Income taxes will rise to 39.6 percent for households earning more than $450,000 per year and taxes on wealthy estates will rise to 40 percent. The bill also includes a renewal of unemployment benefits, a rise in capital gains taxes and an extension of tax credits for college tuition and renewable energy. (It also contains ludicrous measures – like benefits for Hollywood, NASCAR and Puerto Rican rum, but that’s a discussion for another day).

Despite some moderate victories, this bill mostly amounts to a failure of President Barack Obama. He proved his timid character in yet another negotiation with Republicans, following disappointing concessions in the debt-ceiling debate in 2011. The bill postpones spending cuts initially scheduled for Jan. 1 a mere two months and does not address the debt ceiling.

Obama had won a resounding re-election victory two months ago. Polls consistently showed that the American public would primarily blame Republicans if the United States went over the so-called fiscal cliff. He could have gotten a lot of what he wanted – including income tax raises on households making $250,000, not $450,000 – if he had simply tested how long Republicans were willing to go over the cliff. But Obama, wanting to cut a deal simply for the sake of cutting a deal before the deadline, sent Vice President Joe Biden to negotiate a last-minute deal.

Now, showdowns on spending cuts and the debt ceiling will occur in the opening months of Obama’s second term. In his negotiations, Obama has always been too quick to retreat to new positions. Republicans have no reason to think differently in the coming months. Obama can say that he won’t negotiate on the debt ceiling, but he just did by backing off his position of raising it for two years in the fiscal cliff negotiations. Liberals who think Obama will invoke the 14th Amendment if Republicans start playing politics with the debt ceiling apparently believe Obama will behave differently in February than he has throughout his entire presidency. Republicans are already salivating at a second chance to negotiate with Obama on the debt ceiling.

Even with all the leverage on his side, Obama again proved to be scared of passing a deadline. He should have let all the Bush taxes expire in 2010 and introduced the “Obama tax cuts” in 2011, cutting taxes for households making $250,000 or below. He shouldn’t have bent over backwards to cater to the whims of House Republicans willing to prevent the United States from paying its bills. And yet again, Obama displayed a level of desperation to get a deal done. I expected more from him.

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