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Cliff poses tiny dollar gap, wide political ravine
Friday - 12/21/2012, 10:30am EST
By ALAN FRAM
WASHINGTON (AP) - When it comes to resolving their "fiscal cliff" impasse, the dollar gap between President Barack Obama and House Speaker John Boehner is tiny in federal terms. That masks a monumental political ravine the two men must try to bridge, with most of the burden on the now-beleaguered Boehner.
Short of support from his own Republican Party, a chagrined speaker abruptly canceled a House vote Thursday night on his so-called Plan B. The measure would have prevented looming tax increases on everyone but people earning over $1 million annually, but was opposed by rank-and-file Republican lawmakers unwilling to vote for any tax increases at all.
Now Boehner, Obama and Senate leaders face fresh bargaining over a broad package of tax increases and spending cuts, with Thursday night's GOP retreat weakening Boehner's leverage. Ticking ever louder is the start of the new year, which by law will usher in hundreds of billions in tax increases and spending cuts _ the "fiscal cliff" _ unless leaders avert it by crafting a compromise deficit-cutting package that can get through the GOP-run House and Democratic-led Senate.
"I'm interested in facing the major problems that face our country," Boehner, R-Ohio, said Friday, calling for the White House and congressional leaders to work together. He added later, "How we get there, God only knows."
Despite the impassioned political clash that the "cliff" has prompted, weeks of intermittent bargaining between Obama and Boehner have left them facing relatively miniscule dollar differences by Washington standards.
Obama wants to raise taxes by about $20 billion a year more than Boehner. The two men differ over spending cuts by roughly the same amount.
By almost any measure, $20 billion is real money. Yet compared to the $2.6 trillion the government expects to collect next year and to the $3.6 trillion it plans to spend, $20 billion barely registers _ less than 1 percent of what the government already is on track to raise and spend. Relative to the U.S. economy, which should weigh in at well over $15 trillion next year, $20 billion is even smaller.
"The policy implication is very slight," Robert Bixby, executive director of the Concord Coalition, a non-partisan anti-deficit group, said of the $20 billion gaps between Obama and Boehner. "It's not worth the price of not getting a deal. And the impact on the economy is totally insignificant."
On the other hand, economists have warned that the "cliff's" massive tax boosts and budget cuts would heave the economy back into a recession, although likely a brief one.
Though the numbers separating them are small, Obama and Boehner have real policy disputes. Yet their inability to strike a compromise so far underscores that their problem is more than arithmetic: It's largely driven by the difficult politics that Obama and Boehner face in firming up support from their own parties.
Boehner's clout was weakened by the Plan B debacle, and it remains unclear how many GOP votes he could deliver for any compromise he might reach with Obama. Yet while his Plan B would have received virtually no Democratic votes, a bipartisan accord with Obama likely would get significant backing from House Democrats, lightening Boehner's load.
Even before Thursday, the president and the speaker each faced formidable political challenges.
Chastened by Obama's re-election, Boehner has violated a quarter-century of Republican dogma by offering to raise taxes, including boosting income tax rates on earnings exceeding $1 million annually.
Eager for a budget deal that would bolster his legacy and let him address other issues, Obama would cut the growth of Social Security benefits, usually off-limits to Democrats. He also would impose tax increases on a broader swath of people than millionaires _ those with incomes over $400,000. That figure is a retreat from what he campaigned on: a $200,000 income ceiling on individuals and $250,000 on couples.
Those concessions mean that both men have angered lawmakers and staunch supporters of their respective parties. Neither wants to risk his political capital by embracing a deal his own party rejects.
"When you walk into a room and represent a group and you have to give ground to get a deal, you have to stay in that room as long as you can and you have to walk out with blood on your brow," said Joseph Minarik, research director for the Committee for Economic Development and a veteran of grueling budget talks as a former Clinton White House and House Democratic aide. "Otherwise, the people outside the room don't believe you've fought hard for them."