Steering clear of the cliff

Joshua Green wonders what might have been, had President Obama been willing to maximize his leverage from the fiscal cliff:

Even before the deal was settled, many liberals were outraged at how much he was willing to concede to avoid going over the cliff — an event for which every poll showed Republicans would be blamed. Most Republicans were terrified at the prospect.

Nonetheless, Obama agreed to raise income tax rates only on households making $450,000 or more; establish a generous inheritance tax exemption; and lightly tax dividends and capital gains. The income-tax threshold alone sacrifices $200 billion compared with what he had once insisted on. But the revenue sacrificed isn’t terribly important.

What is important is that Obama yielded on resolving the budget deadlines, the most consequential being the need to raise the debt limit. Already, Republicans are threatening default without deep cuts in return. Had Obama been willing to go over the cliff, they probably wouldn’t be, since the public would be furiously blaming them. By pulling back, Obama passed up a chance to “break the fever” (as he likes to put it) that afflicts the Republican Party and led it to oppose nearly all that he has done during his presidency.

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