How Democrats Learned To Stop Worrying And Love The Fiscal Cliff

Remember, we’re watching the exact same argument unfold: Last year Democrats were happy to meet Republican demands for budget consolidation as long as Republicans were willing to look at both spending cuts and higher revenues to achieve it. Republicans refused, and faced with the destructive consequences of a default, Democrats caved.

This time around, it’s not that Democrats are willing to shoot the hostage. It’s that they’re willing to let Republicans shoot the hostage. There will be no ransom this time around.

In part that’s because the politics are much different — it’s an election year, the economic consequences of tumbling over the fiscal cliff won’t really be felt until the election is over, and the Democrats have an easily accessible argument: “Republicans are taking hostages in order to renew tax cuts for the rich.”

But these are also very different hostages. The distinction won’t register loudly in the public debate, but it’s crucial. If Congress pulls the country over the fiscal cliff, it can at any point deploy a parachute. It’ll harm the economy, but in a quickly reversible way. If Obama wins, and Republicans refuse to budge, Democrats can undo a lot of the damage retroactively, with a massive tax cut for income up to $250,000, and delay or complete elimination of the sequester.



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