President Barack Obama's hard stance on the "fiscal cliff" talks is a bet that his re-election gave him the political clout to force Republicans to accept higher taxes on upper-income Americans as a first step toward reducing the federal deficit.
Obama's aggressive posture was shown in the proposal Timothy F. Geithner laid out for congressional leaders last week: a reprise of the president's prior budget proposals, with $1.6 trillion in tax increases and about $350 billion in health care savings, primarily in Medicare. He also asked for an Aug. 1 deadline for decisions on income tax overhaul and further spending cuts.
"You could see the shock in the Republicans — this is not what they were expecting from the White House," said Stan Collender, managing director of Qorvis Communications LLC in Washington and a former staff member for the House and Senate budget committees. "There was almost euphoria among Democrats that the president was playing hardball."
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