The bill would come to the floor, and Republicans would vote ‘present’ to register their disapproval with letting the top marginal rates go up, allowing Democratic votes to carry it to passage. Having already cleared the Senate, the bill would be sent to the White House and signed into law. Over and done, middle class tax increases averted.
But the last-ditch plan has other important advantages for Republicans. Come 2013, Obama will need to raise the debt limit and pursue other goals such as raising $600 billion in further revenues by limiting tax deductions for people with high incomes, extending unemployment benefits, averting a pay cut for physicians who treat Medicare patients, and avoiding indiscriminate federal spending cuts.
It's being touted on TPM as the "doomsday plan". But the idea that this plan would then shift momentum to the GOP for the fiscal battles of 2013 is flawed.
First of all, the GOP, if it does accede to this plan, wants massive cuts to "entitlement" programs as part of its negotiating stance in 2013. Its basic plan will be to enact the Ryan budget for Social Security, Medicare, and Medicaid. Yes, the Ryan plan, the plan against which President Obama ran and the plan he used to beat Mitt Romney over the head with on his way to victory. Whether the House leadership pushes for Ryan's ideas in the lame duck session or in 2013, it still remains as popular as botulism. Even a majority of Republican voters don't want drastic "reform" of entitlements. These reforms are anathema now, and will not be rehabilitated in the public's mind just because the GOP allowed top tax rates to return to what they were under President Clinton.
Of course, the major leverage the GOP sees as having should it give in to Obama in the tax fight, without making a grand bargain, is its power over the debt ceiling. This too is illusory.
The country remembers the last debt ceiling fight; the GOP did not come out of it with accolades. It was seen as being responsible for the country's credit being downgraded. The dynamics haven't changed. Another debt ceiling fight will inflict further damage to the GOP. It is, furthermore, a fight they cannot win. Again, Obama won the election running on a particular economic platform. The majority of the electorate wants to see this platform enacted. Part of that platform is taking the uncertainty away from the debt ceiling kabuki. That's why dealing with the debt ceiling is part of the Democrats' budget offer for the lame duck session. But even if the debt ceiling is still an issue in 2013, the GOP has no greater leverage. It will be blamed if it obstructs and the nation's credit rating suffers another blow.
If the GOP caves in the lame duck session, its Tea Party base will stage a bloody revolt. Grover Norquist may have the stench of failure among some of the GOP House caucus, but for all the attention given to the dissenters to Norquist's pledge, most haven't abandoned him, and the Republican negotiating stance remains the same. John Boehner's leadership will be weakened even more, to the point where there will be legislative chaos as the majority caucus splinters.
However, if the GOP holds together and lets the country go off the fiscal cliff, its position will be weakened even further. A difficult situation will become impossible for them, as a President elected with a mandate to enact popular reforms to the country's fiscal house will have no reason to compromise with a GOP caucus which has been neutered, a neutering inflicted mostly by itself.
And here is my prognostication; take it for what it's worth: Boehner and the GOP will not "cave". It will let the country go off the cliff. It has been on this path since 2009, of doing anything to stymie this President. Intellectually Republicans may know they have to make a deal; but the exigencies of GOP politics preclude that. They've spent four years demonzing Obama; how can you then make a deal with him in which he comes out the hero? The fact that he will come out the hero no matter what Boehner et. al. do is besides the point; actively helping him is unthinkable.
Republicans didn't have to come to such a pass. An analysis of how they've reached this juncture is for another essay. Suffice it to say that this iteration of the Republican Party is committing a slow suicide. The next two years should be interesting to watch.
ADDENDUM: And, Boehner has proposed a counteroffer which is a rehash of what he offered last year. The interesting thing is that he says the Simpson-Bowles report should be the framework for any deal: the same report which said the Bush tax cuts were unsustainable.
Of course, as Sam Stein tweets:
Bowles statement: "the approach outlined [by Boehner]... does not represent the Simpson-Bowles plan, nor is it the Bowles plan."So he can't even do that correctly. The cliff is the next destination.