For the first time since 2010, the White House and Congress appear to be dancing towards a solution on the budget and tax cuts facing Washington. Of course, Barack Obama’s surprising victory played a role in that. Plus, some Republicans feel that the nation gave a repudiation to the party’s more extreme policies.
At the forefront is not past election results but future blame. If Obama refuses a deal with Congress, the blame may not be shifted onto him. A new Pew Research Center poll found that 53% of Americans will blame Congress if a deal is not made. Only 29% will blame Obama. That is similar to the government shutdown during the Clinton administration years of 1995 and 1996. In that situation, Clinton also avoided being blamed. The Republican Congress was viewed as the culprit in the eyes of the American people.
Coupled with the election results, House Republican leaders are increasingly speaking of increasing revenue. They don’t mean taxes. They mean closing loopholes for the wealthy. The Republican Party has adamantly held the position that if the rich pay more taxes then there will be fewer jobs. It doesn’t take a mathematician to figure that raising revenue from taxes or by closing exemptions is still the same dollars. This is simple political posturing that lets the Republican Party hold to its mantra of no new taxes while raising more money for the federal government.
There is one other development worth noting. During the last Congress, Grover Norquist held the Republican Party hostage with his no new tax pledge. Few Republicans dared not to sign onto it. That created an insurmountable deadlock with Obama who wanted some taxes increased.
The new Congress still has a Republican House, but it lost half-a-dozen or so Republican Congressmembers. In addition, twelve new Republican House members refused to sign the Norquist pledge. That means there are less than 218 Republicans in the House who will not accept taxes under any circumstance. These Republicans, coupled with the Democrats, might muster a majority that raises taxes. At the very least, an increase in revenues through other means is likely. The fiscal cliff that looked like a near certainty now looks far less likely. That doesn’t mean a deal will be easy, but there are enough Congressmembers in Washington who want to compromise that a majority to solve some problems is feasible.