The president’s proposal is designed to fail and designed to take the nation right up to the so-called fiscal cliff.
If the GOP breaks in the end and give him his rate increase then he will not only have won a big victory but also will have left his rival political party in a shambles, having forced Republicans to violate the core principle that has animated their party for two decades. Obama could head into 2014 midterms knowing that Republican primary voters would be undertaking a vicious ideological fight on taxes.
But what if the Republicans don’t accept higher tax rates as a precondition for negotiating a larger deal and the federal government jumps the cliff.
The Obama Democrats are sanguine about the prospect, believing that they can get a much better deal overall once everyone’s taxes have gone up. Republicans wouldn’t be voting for higher taxes in a post-cliff world, but rather lowering them from the automatically higher rates that would kick in on January 1. While it would allow Republicans to remain ideologically intact, it means the president would start the next round of negotiations having already gotten what he wanted.