Obama Counts on Re-Election Clout to Win on Fiscal Cliff

Geithner says no budget deal without tax increases.

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.

House Majority

“They must have forgotten that Republicans continue to hold a majority in the House,” Boehner, an Ohio Republican, said on “Fox News Sunday.” “The president’s idea of a negotiation is ‘roll over and do what I ask.’ We need to find common ground, and we need to find it quickly.”

Campaigning Strategy

The president’s team, particularly his political advisers, concluded that it was a mistake to stay in Washington instead of campaigning on behalf of his plan. So on Nov. 30, Obama took Air Force One to Pennsylvania, where he spoke at a toy factory on the need for deficit action -- including raising top-income tax rates. His appearances have been tied to campaign-style appeals for support on the Internet.

Obama’s Cuts

The White House is proposing spending cuts of about $2.4 trillion. That consists of $1 trillion in cuts already enacted last year, $350 billion in health-care savings, $250 billion on non-health programs, such as farm subsidies, and $800 billion as war costs are pared.

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