On the face of it, the Republican attempt to negotiate a “grand bargain” linking Democratic tax increases and Republican spending cuts was a debacle. In the end, they accepted $600 billion in Democratic tax increases and more than $42 billion in Democratic spending increases with not one dollar of Republican spending cuts.
The Republicans’ inability to stop the Obama tax increase can be traced to their earlier failure to either make the Bush tax cuts permanent or, in the face of Democratic intransigence in the Senate, their failure to extend all of the Bush tax cuts by one year through reconciliation for as long as they controlled both the House and the Senate. In this case, the Bush tax rates and the repeal of the death tax would have been in effect until 2016.
Instead, the Republican deficit hawks made common cause with Democratic opponents of the Bush tax cuts and allowed the very tax increase they opposed to remain in the Congressional Budget Office’s baseline forecast of future revenue. The inevitable result was the Republicans found themselves in a no-win position after losing both the White House and two Senate seats in the 2012 election.
As a consequence, Republicans were forced to negotiate from a position of weakness. What all the Republican critics refuse to acknowledge is without a deal, the Republicans would have given President Obama and the Democrats a $2.3 trillion tax increase even as they would get the well deserved blame for raising taxes on the middle class and causing the resulting recession.