Political Scene: The Coming Battles

Governing is never a zero-sum game. That’s especially true when the political landscape is as divided as today’s is—on a single issue, both sides win and both sides lose; otherwise, nothing would ever get done. On this week’s Political Scene podcast, John Cassidy and Ryan Lizza talk with host Dorothy Wickenden about the way that dynamic played out during the latest battle in Washington—the fiscal cliff—as well as the outcome of that fight, and the economic challenges that face the newly-installed Congress.

First, Cassidy points out the positive aspects of the fiscal-cliff deal, at least from the Democrats’ perspective:

We have established the principle, after twenty-two years, that taxes can go up as well as go down. The highest tax rate has been raised from thirty-five per cent to thirty-nine point six per cent. That’s an important historic moment and people will remember it about the Obama Presidency just as they remember it about the Clinton Presidency.

But, he says, “The problem with it is that in order to get that through Obama had to agree to virtually double the income threshold at which it would apply, from two hundred and fifty thousand to four hundred and fifty thousand for households.” One other important item that President Obama did not fight for, Lizza notes, is a continuation of the payroll-tax holiday that was instituted in response to the economic crisis, and which, he says, “was not extended despite the economy still being kind of fragile.” (Amy Davidson has more on why letting the payroll-tax cut expire might harm the middle class.)

The standoff over the fiscal cliff wasn’t the last of the legislative challenges on the table this year that could hamper the economic recovery if not dealt with properly. On the horizon, Lizza says, are “three big things: sequester, debt ceiling, government shutdown, all happening within a month of each other.”

“This is,” Cassidy observes, “ultimately a debate about the size of government,” so it won’t be easy to get the necessary deals done. Both sides will win on some points, and both sides will lose on some, but one faction will take the overall victory, and in doing so, will likely set both tone and precedent for the government for years to come. After all, as Cassidy says, “If Obama couldn’t expand the revenue base at this point, having won two elections in a row and having the fiscal cliff, when is it ever going to happen?”

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Illustration by Tim Lahan.