As we approach the “fiscal cliff,” I see three possible scenarios. One is a punt that pushes the “cliff” back.
The second is that we go over the cliff. In that scenario, everyone who pays taxes will have to pay more and, as things stand now, most taxpayers will blame Republicans.
Also, in that scenario, the Democratic Senate will promptly pass legislation lower taxes for everyone who makes less than $250,000 per year. If the Republican House doesn’t pass that legislation, Republicans will suffer even more political damage. If Republicans pass the legislation, taxes will have gone up for a larger group of Americans than that which Obama agreed to earlier this month in “fiscal cliff” negotiations. Obama proposed that taxes go up only for those making more than $400,000.
The third scenario is that the Democrats find a plan that can win over just enough House Republicans to pass. It’s not clear what that plan is, which lowers the odds of this scenario coming to pass.
Let’s assume, however, that it happens. Conservatives will hate the cliff-avoiding legislation; Republicans who vote for it will become vulnerable to primary challenges; some Republicans who vote against it will become vulnerable in the general election, especially if the economy continues to improve; and the Republican caucus will be fractured.
But maybe there’s a fourth possible scenario. Maybe when Republican House members return to Washington, enough of them will, on reflection, appreciate the logic of Plan B, and therefore the House will pass it.
Doing so won’t extinguish scenarios two (going over the cliff) and scenario three (the passage of not-so-great legislation). However, if Plan B or something like it passes, Republicans will be in a better position in either scenario.
If we go over the “cliff,” it will be clear that this didn’t happen because of Republican unwillingness to raise taxes on millionaires. And shorn of their ability to make this claim, and their ability plausibly to characterize the House as “dysfunctional,” President Obama and Senate Democrats may see a need to be more compromising when it comes to “cliff-avoiding” legislation.