President Obama is in the throes of the biggest financial challenge of his political career. The looming fiscal cliff will affect all Americans, quite likely to trigger a new recession if not averted. That is all Americans, not just the nouveau riche of the $400,000 set; it will affect us all. On the other side of the fiscal cliff, we would find finger pointing, blame, and change without hope.
Obama has reminded us that he won the election; he did. The definition of "rich" has been contracted from his initial $1 million salary; fair game? He promised to raise taxes on the rich in his campaign.
The president is at the very top of the government pecking order. In fact, he is the only person on the administration side of the bargaining table. It is a very lonely place with The House and Senate representing the American electorate with dramatically different posturing on the other side. President Obama's role as chief executive officer of the United States is to lead through these difficulties, reasonably review proposals to make certain we can tax appropriately while affording our expenditures. He is the driver, the head of this conglomerate called the United States. Being a strong supporter of collective bargaining, Obama must find himself in a conflicted role reversal of sorts.
In very relevant comparison to collective bargaining, there are expected norms that both sides must follow. That includes respect for negotiators, positions and interests, and fair evaluation of the proposals. This does not include disparaging comments and automatic rejection of proposals and solutions.
Speaker of the House John Boehner put a package on the bargaining table that reflects President Obama's previous bargaining position; a tax increase for those wage earners of $1 million or more along with spending cuts. But the rules of negotiations have changed. Obama won the election. In his victory speech, he said, "In the coming weeks and months, I am looking forward to reaching out and working with leaders of both parties to meet the challenges we can only solve together: reducing our deficit; reforming our tax code..."
He is now strengthening his resolve. His most memorable campaign promise was a tax hike for the "rich" and he won.
His goal of putting the U.S. on a path to cut deficits by $4 trillion over 10 years provides movement, but his plan proposes $1.3 trillion in new spending and an unlimited debt ceiling that is ready to blow. Not long ago, Obama warned that raising taxes in a struggling economy is "the last thing you want to do," but that is exactly what is happening. Most lawmakers think it is likely that we will not be able to resolve the fiscal cliff. A bitter pill provides difficult posturing.
An overwhelming number of voters, however, also realize that raising taxes will not in and of itself solve the budget crisis. While many Americans support tax increases for higher paid households, it is likely that changes in the tax code would resolve the issue more effectively. Sixty-seven percent think more will need to be done to close the budget deficit, compared to 19 percent that think tax increases alone will work and 12 percent who aren't sure.
According to the Tax Policy Center, the result of the fiscal cliff on American household would range from an increase of $1,064 for household income of $20,000 to $30,000; on a graduated scale to $254,637 for income of $1 million.
The president, the House and the Senate need to review the pulse of the American public. It's not only about a win in the presidential election. According to an NBC/Wall Street Journal:
• 68% view the fiscal cliff as very serious or serious
• 65% want to see compromise to reduce the deficit and cut spending
• Only 28% want to see Washington stick to their positions.
A similar Fox News poll revealed similar results:
• 89% want to see major cuts in spending
• 83% Democrats
• 91% Independents
• 95% Republicans
Rasmussen reports highest ever support for reduced government spending at 73 percent.
Washington, this is your electorate speaking. In any responsible and productive negotiation, facts and opinions are critical aspects of the outcome, most certainly the positions and opinions of constituents.
The fiscal cliff negotiation is a model for bad faith bargaining. Instead of accusations by Senate Majority Leader Harry Reid of wasting time and DOA proposals, public criticism and name calling, they need to take a critical look at the desires of the electorate. Reid referring to Speaker Boehner as a dictator does not foster cooperation in negotiations. Public perception is critical and the lack of fairness in this looming negotiation could result in taxpayer apathy. The result? Americans suffer, adjust withholding, reduce spending, slowing the economy.
In a sense, the elected officials that represent the American people are losing sight of what matters in the sake of their political views. The American electorate and economy is what needs to be in full view and primary consideration. The legacy that will remain long after the fiscal cliff negotiations are over is on the administration side of the table, the president. We will remember who the president was at the time of the fiscal cliff, but not too many other players.