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Rob Horowitz: Election Gives President Obama More Leverage on Fiscal Cliff

Tuesday, November 27, 2012

President Barack Obama’s victory provides added leverage to succeed in achieving the Grand Bargain that escaped his grasp during the debt ceiling negotiations with Speaker Boehner in 2011.
As many observers have pointed out, Obama begins the "Fiscal Cliff" conversation with a structural advantage as a failure to reach a consensus results in the Bush tax cuts expiring and in big defense cuts -- both policy results that are highly undesirable to Republicans. This gives Republicans a much stronger incentive to reach a substantive and comprehensive deal to avoid the fiscal cliff than was the case during the debt ceiling stand-off where many Republican House members were willing to risk the consequences of failing to raise the debt ceiling.

The election results only add to the President’s strong hand. As the President has repeatedly pointed out since the election, one of the clearest contrasts between him and Mitt Romney was on the question of raising taxes on the wealthy. In a campaign without a lot of affirmative policy specifics, Obama’s strong stance on raising taxes on the top 2 percent of wage earners stands out. Even better, 60 percent of people who cast their vote in the election back this policy, according to exit polls.
The increased flexibility on the question of new tax revenues from House Speaker John Boehner (R-OH) and other Republicans and Conservatives since the election demonstrates that the results of the election are hitting home. Boehner and others have already indicated they are willing to see taxes on the rich go up if this is accomplished through closing tax loopholes and restricting deductions, rather than by raising rates. Whether it is possible to capture all the revenue required this way is still very much in doubt, but the prospect of a combination of a smaller rate increase on the wealthy, an increase in the capital gains tax, and closing tax loopholes is one potential solution.
Just as important, the election results -- despite the loud objections of some of the liberal interest groups who backed him -- give President Obama the political running room needed to get the Democratic votes required for the adjustments in entitlement programs that are essential to any comprehensive deal that addresses our long-term debt problem.
Older voters -- the people most opposed to changes in retiree entitlement programs -- did not support the President and are now the most consistently Republican age group in the electorate. Obama lost voters 65 and over by 56 percent to 44 percent over all and among white seniors by 61 percent to 39 percent. By contrast, Obama won voters between ages 18 and 29 by 60 percent to 37 percent and for the second straight Presidential election these younger voters were a greater share of the electorate than seniors.
Younger voters are persuaded by the argument that the federal government is spending seven dollars on programs for seniors for every dollar it spend on kids-- an unacceptable ratio that will only grow as Baby Boomers retire in greater numbers--- and that as a result we need to make entitlement programs more affordable. A poll of all Obama voters conducted recently by the Benenson Strategy Group for the organization Third Way reports that nearly four-in-five Obama voters believe it would be better for the country if the President and Congress made changes to fix Social Security and Medicare than if they made no changes.
This specific result is backed up by a post-election Pew Poll that shows Democrats by a big majority want the party to move in a more moderate rather than liberal direction. Even Democratic liberals are about evenly split on this question.
Now it is up to President Obama to use this political high ground to reach the kind of balanced, long-term debt reduction deal that puts our nation on a sound fiscal course; ensures the wealthy pay their fair share; makes needed adjustments in retiree entitlement programs while preserving retirement security; and frees up resources to make the investments needed in infrastructure and education. I am optimistic he will get this still tough job done.
Rob Horowitz is a strategic and communications consultant who provides general consulting, public relations, direct mail services and polling for national and state issue organizations, various non-profits and elected officials and candidates. He is an Adjunct Professor of Political Science at the University of Rhode Island.

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I dont think obama has been a very good leader,will see what happens.

Comment #1 by anthony sionni on 2012 11 27

It's really simple: You don't spend more than you take in.

Like any family must do, you adjust spending to reality. You don't continue whipping out the credit card and spending on program after program. That's fantasy-land stuff that always ends badly.

The progressives and even big-government Republicans can't seem to get this concept through their heads, but insist on ever-more taxing and spending.

Comment #2 by Art West on 2012 11 28

What political high ground? Why are you insisting that the President won every electorate vote on nov. 6th. Fact is the GOP was 325,000 votes away from a new president, not exactly a sweeping referendum. The President does not care what his party think, especially since he cannot be voted out. Beware of what you wish for, the debt ceiling is going to increase by 2.5 trillion, which is allowing us to spend our way into oblivion. People like you who influence young minds are dangerous, you preach only one side of the argument and rob future generations of critical thinking skills to satisfy your own agenda.

Comment #3 by Silence Dogood on 2012 11 28

The Democrat party lakes the entire concepts of balanced budgets and fiscal responsibility, so I'm not expecting much out or our so-called "leaders" in Washington.

If things were so wonderful for everyone under Clinton and his tax rates, then lets just let the tax rates go back up on everyone, not just the wealthy. Or are the Dems implying that the rates were actually too high even under Clinton? Tough to tell, since you can never get an honest answer out of one.

Comment #4 by Russ Hryzan on 2012 11 29

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