Congressional Republicans: Meet the President Who Suddenly Has the Upper Hand

While I was enmired earlier today in the world of Atlas Shrugged-ism, my current Atlantic colleague Robert Wright highlighted an article by our former Atlantic colleague Joshua Green that sets out the realities of the upcoming tax and budget negotiations with admirable clarity.

Please print out this passage from Green's Bloomberg Businessweek article so that you can refer to it each time you read a story about Obama's showdown with the Republican forces in the House.

Despite their post-election tough talk, Republican leaders have dealt themselves a lousy hand. Obama can propose a "middle-class tax cut" for the 98 percent of American households earning less than $250,000 a year -- while letting the Bush tax cuts expire for those earning more -- and dare the Republicans to block it. If they do, everyone's taxes will rise on Jan. 1.

It's true that going over the fiscal cliff, as some Democrats believe will happen, would set back the recovery and could eventually cause a recession. But Democratic leaders in Congress believe the public furor would be too intense for Republicans to withstand for long.*

During last year's insanely reckless and unnecessary debt-ceiling showdown, President Obama really did have his back against the wall. Enough members of the super-energized Tea Party contingent were knowingly or ignorantly willing to bring on a technical sovereign-debt default** -- in hostage-drama terms, they were willing to shoot the hostage -- that in the end Obama had to ensure that did not occur.

This time his position is more like Bill Clinton's, during his government-shutdown test of wills with Newt Gingrich's super-energized "Contract With America" contingent in 1995. Clinton said: You're willing to close down everything people rely on, because of your pet theory? Bring it on!*** As Green explains, Obama's position is closer to that today. And, on the heels of the 2012 election results, it is hard to imagine such responsible leadership as the Republican party has inviting an tax increase for everyone, in the name of protecting the over-$250,000 class.
* More from Green: "The expiration of those cuts and the automatic reductions set to take effect at year's end -- the so-called fiscal cliff -- mean that Obama and the Democrats can gain a huge source of new revenue by doing nothing at all. Republican priorities are the ones suddenly in peril. The combination of tax increases on the rich, higher capital-gains taxes, and sharp cuts in defense spending have congressional Republicans deeply worried. To mitigate these, they'll have to bargain."

** There are all sorts of debates about whether or when the federal government would actually have "defaulted," how consequential that would have been, etc. The point is: Obama knew that the terrain was unclear enough and the potential risks so great that he couldn't just say, "Ok, I dare you." The upcoming situation is different.

*** As students of the Clinton administration know, the government-shutdown episode, while eventually turning into a political success for Clinton, also led to his biggest self-induced near-disaster, since it was then that he came across one young intern on his staff.