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‚??Cliff‚?? crash may clear way for Jan. deal

February 19. 2013 10:09PM
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WASHINGTON — To get to yes on a fiscal cliff accord, Congress and the White House first might have to get to no.

That is, an impasse that sends them over the cliff by missing their Dec. 31 deadline to pass a major deficit-reduction plan.

Such a breach would immediately change the political dynamics, making it easier for many lawmakers — especially Republicans — to agree to a second-chance compromise in the new year.

This scenario strikes a good number of Washington insiders as irresponsible and improbable — who knows how the markets will react? But others argue it will be easier to round up the congressional votes needed for a big compromise if the deadline passes and lawmakers rush back to Washington next month under a starkly new political reality.

The new landscape would allow President Barack Obama to face his liberal base — and, more importantly, let House Republicans face their conservative constituents — and say in essence: See, I did the best I possibly could, and it didn't work. The other side didn't blink. Now everyone's taxes have gone up, and it's time for compromise.

So long as there is even a day left to negotiate, some hard-liners in both parties will demand that their leaders hold fast. Having the Dec. 31 deadline expire would finally show there's no more time to negotiate.

A number of lawmakers in both parties say the fiscal cliff could actually become a gentle slope, with the economic impact quickly mitigated under circumstances easier for Republicans to swallow.

We can do something on the third of January which isn't unreasonable, said Rep. Jack Kingston, R-Ga., a 20-year House veteran. And I think it'll pass the Senate real quickly.

Here's why Kingston and others think a deadline breach might make it easier to reach a bipartisan compromise in early 2013:

First, income tax rates on virtually every American will have risen automatically, starting Jan. 1. Other levies, including a payroll tax and estate taxes, also would rise. And large spending cuts would start affecting the military and many other government programs.

The political debate has focused on income tax rates, which most congressional Republicans have vowed never to raise. Obama campaigned on a pledge to raise those rates on the wealthiest Americans. He won the election, of course, and new polls show most Americans support his view.

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