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Bleak Outlook for Fiscal Cliff Negotiations: 9 Expert Takes

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As talks have all but broken down between President Obama and House Speaker Boehner, political analysts are less than optimistic about the days ahead.

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President Obama and Congress left behind a huge fiscal mess in Washington late last week as they departed for a brief holiday recess. Short of a Christmas season miracle, the nation will be headed over the fiscal cliff next week, with nearly $600 billion worth of automatic tax increases and spending cuts set to take effect.

House Speaker John Boehner, R-Ohio, threw in the towel after his "Plan B" for extending Bush era tax cuts to the 99% of Americans making less than $1 million per year failed to pass muster with conservatives in his caucus. He then called on Obama and Senate Democrats to find a way out of the political morass.

Obama declared himself an eternal optimist and urged the two sides to cobble together a minimalist budget and tax deal before the end of the year that would prevent taxes from rising on the middle class. And a handful of Senate Republicans over the weekend endorsed Obama's partial deal, even if it meant taxes would go up for the wealthiest Americans and that decisions on spending cuts would be put off until next year.

But with the two parties more polarized than ever on virtually every aspect of tax policy and deficit reduction strategies, the prospects for a year-end fiscal calamity that would spook the markets and undercut the economic recovery is looming large. Many of the public policy and political experts and media hands who have been watching the latest high stakes budget debacle unfold are viewing the Christmas season through a very gloomy lens.

Here's what nine of them have to say:

Robert D. Reischauer -- The former director of the Congressional Budget Office and a premier budget and economic prognosticator has been predicting for weeks that talks would fail and the government would plunge off the fiscal cliff. Now, in the wake of the Plan B fiasco, he's more certain of that than ever.

"In a way I was thinking Boehner was sort of playing out the steps in a ritualized dance he had to go through, but part of that dance was to have his troops support him at this point. But he has been dealt a blow by his own members, no question about it. The president needs him to be strong to work with him. And the president's only way of sort of moving this forward is to give a little more ground to Boehner.

"But Obama is right at the edge now, where if he goes much further he's going to be in the same position that Boehner finds himself where much of his most loyal supporters say they won't play ball...As long as markets don't react, we can sort of muddle through for a week or two, but at some point it begins to be a real problem."

Ron Bonjean -- The Washington political consultant and former Republican Hill spokesman, has lost faith in the negotiations process and believes it will take powerful external forces – such as an uproar in the markets – to force the two sides into an agreement.

"We have sunk to the lowest common denominator in order to get a deal--sheer investor panic. The reality of a stock market crash is probably the only way Washington will strike a deal. It is likely the only scenario that could force the President and the Speaker to allow for a deal driven by Democratic votes to pass the House. A stock market dropping hundreds or thousands of points would allow Boehner to get a pass from his Republican members who can still mostly vote against a deal because of tax increases."

Chuck Todd, NBC's chief White House correspondent, speaking on Meet the Press with David Gregory on Sunday:

"We're going to get a small deal. It's a shame...I think politically, the president's making a mistake to go for a small deal. He will lose leverage as the year goes on. He'll get a big political victory. But he should try one more time for the big deal. You had nearly 200 House Republicans about to vote to raise taxes on millionaires. That means you could get it up from a $400,000 threshold to 750...A deal is within reach. I think go one more time. They seem to have had it. And they don't want to try Boehner one more time. But I think they're making a big mistake."

John Zogby -- The veteran pollster and political analyst has given both Obama and Boehner failing grades for leadership and political acumen.

"Both sides are playing at brinkmanship at a time when the American people are looking for a deal. There is now less than a week to go, and this is not funny. In terms of the politics, the consensus is that the Republicans will be blamed for the lack of a deal...The president has to force the issue with Senate Majority Leader Harry Reid: pass legislation that offers tax cuts to those earning less than (let's say) $700,000. There were plenty of Republicans in the House willing to accept the Plan B target of $1 million. Then follow with a serious proposal to cut entitlements."

E. J. Dionne -- The Washington Post columnist questioned whether Boehner can broker a compromise with the president because he is so out of step with many of the most conservative members of his GOP conference. Speaking on MSNBC yesterday, Dionne said:

"What we've learned from last week is that if you give the 30 to 60 of the most right-wing or conservative Republicans the veto power, you will never get a reasonable solution. President Obama made a lot of concessions to John Boehner. A lot of liberals didn't like all the concessions he made. He limited the reach of the tax cut and changed the indexing of Social Security. I think that if John Boehner – and it would take courage on his part – said, look, we're going to let the whole House work its will, you could pass a lot of bills – reasonable bills – if you worked from the center out instead of starting from the far right and seeing what they can take."

Norman Ornstein -- The political expert at the conservative -leaning American Enterprise Institute thinks that Boehner's speakership will survive his latest humiliation at the hands of House conservatives.

"But Boehner has to be a little nervous now about a January 3 vote [on the speakership], and how it might be shaped by what happens between now and January 3. He may be inclined more now than before to wait until after January 1, take a hit [by allowing tax rates to rise on everyone], but then have the vote be on a tax cut, not a tax increase. At the same time, it is possible that Boehner and Obama come together in a week and bridge the $200 billion gap between them on spending. But the bottom line here is the same: whether we get a deal before January 1 or after, Boehner will have to bring up a bill that will require more Democrats than Republicans to pass it. Will he?"

Ethan Pollack -- The senior policy analyst at the liberal Economic Policy Institute says that the collapse of Plan B starkly illustrated that the House GOP is unwilling to vote for any measure that raises taxes on the wealthy, but there is more to the problem.

"A secondary lesson of last Thursday night is what Boehner didn't do; after all, he knew that his bill was in trouble and in response he loaded it up with conservative goodies, but did not include any cuts to Social Security or Medicare. What this suggests is that while there is a fondness for anti-entitlement rhetoric, Boehner seems to believe that there isn't actually any appetite for cutting these programs even among the most conservative members of his caucus.

"This is, I believe, is the most underrated obstacle to any deal: the GOP doesn't actually know what it wants to do on Social Security and Medicare. Sure, they talk a big game, but (1) most of [House Budget Committee Chairman Paul] Ryan's Medicare savings happen outside the 10-year window, and he doesn't touch Social Security, (2) when they have a chance to pass a bill that deals with the fiscal cliff, they just go after taxes and domestic spending, and (3) they just finished a campaign in which their standard-bearer campaigned against entitlement cuts."

Steve Bell -- The former Republican Senate Budget Committee adviser who is now with the Bipartisan Policy Center says he is convinced that the country is headed over the fiscal cliff and blames the Republicans in large part:

"I think this is really a tragedy for the Speaker, and he's been misused by his caucus...This is the third time in 24 months the speaker has had to pull a bill off the floor that he had been told by his whip team had the votes...Democrats no longer know if they make a deal with Boehner whether he can deliver on it...I think what you're going to see is a little hardening on the positions of the president. He's going to say, look, the deal is on the table with the CPI adjustment and this and that. That's going to expire on December 31 and we're serious about this. Which means the next deal will be even more unpleasant to your caucus perhaps."

Larry Sabato -- The University of Virginia political scientist isn't ready to give up on the talks.

"As long as Boehner and Obama keep open the communications lines, there's always a chance a deal can come together at the last minute. But can Boehner sell it to his troops? Is the Speaker willing to bring a deal to the floor that won't get a majority of Republicans to vote for it? That may be the only way anything gets done: A minority of Republicans and a majority of Democrats."

Editor's Note: This article by Eric Pianin originally appeared on The Fiscal Times.

For more from The Fiscal Times:


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