Republicans after the election: the stalemate before the fiscal cliff

After Obama’s election victory, Republicans offer cooperation. However, they insist on their positions.

Willy-nilly, they will have to put up with each other for a while: John Boehner (left) and Barack Obama. Picture: dapd

The election is over, the balance of power in the U.S. has been clarified – at least on paper – and both re-elected President Barack Obama and his Republican opponent in Congress, House of Representatives leader John Boehner, know that they must now act quickly to prevent what could be the biggest self-made crash of the U.S. economy.

That’s what looms if the U.S. actually falls off the "fiscal cliff" on Jan. 1. The "fiscal cliff" is the combination of the tax cuts that will take effect on January 31. December expiration of Bush-era income tax cuts, the expiration of the two percent payroll tax cut enacted in 2009, and the enactment of about $1.2 trillion in automatic budget cuts for the coming year.

None of this is what anyone wants, but to prevent it, the administration and Republicans must come to an agreement, must find compromises. While Republicans have been able to defend their majority in the House of Representatives, Democrats have the Senate – though they still do not have a 60-vote majority that would lift the Republicans’ blocking minority.

Boehner announced Wednesday in Washington, "Mr. President, this is your hour. We are ready to be led – not as Democrats or Republicans, but as Americans. We want you to lead, not as a leftist or a conservative, but as president of the United States."

Tax cuts should be preserved

Republicans are willing to negotiate for higher tax revenue, Boehner said, but did not deviate one iota from the previous position that the tax cuts enacted under Obama’s predecessor, George W. Bush, should be preserved in their entirety. Most notably, he disagreed with Obama’s position to repeal the tax cuts for annual incomes over $250,000.

Instead, Boehner advocated raising higher government revenues by closing tax loopholes. That’s exactly the position Mitt Romney had taken on the campaign trail. And like Romney, he left open which loopholes he meant.

Obama, for his part, had announced that he would veto any measure that would continue to hand out tax giveaways to big earners. His vice president, Joe Biden, said Wednesday he sees a clear mandate in the election outcome to implement Democratic ideas on fiscal policy. "We’re prepared to work with the Republican leadership," Biden said, but added it will be interesting to see how Republicans position themselves.

Strip away the pleasantries, and what remains above all is that both sides enter the negotiations with unchanged positions. The next few weeks will be a pure power struggle. The decisive factor will indeed be how the Republicans interpret their election defeat – and whether Boehner and McConnell are able to push through compromises even within their own ranks.

No more white men

For there, the debate about the lessons to be learned from the election results continues unabated. The mainstream believes that the Republicans must not remain the party of white men, must open up to minorities, and must move back to the center.

The conservative forces, however, are drumming up support for the exact opposite. On the discussion platform, for example, a number of commentators are campaigning hard against Boehner, who they say is too willing to negotiate. The search for a compromise with the Democrats is likely to be difficult.

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