Soon-to-resign Timothy Geithner’s bluff at the edge of the fiscal cliff has just been challenged by John Boehner. Geithner told Boehner and McConnell that there must be taxes on the rich.
Boehner has staked his reputation on a rejection of this proposal. He has nothing to lose by standing firm.
I have kept saying that the U.S. stock market’s recent mini-boom in anticipation of a settlement was silly, that there was no agreement. Some silly rumor about an agreement sent stocks up.
Boehner yesterday said on one TV news show that he was astounded that Geithner would make such an offer. So was I. Didn’t he read Boehner’s lips?
Obama is playing a game of chicken. He thinks the Republicans in the House will buckle. They will settle for his proposal.
Why should they? What’s in it for them? They are in office for two more years. Their constituents don’t like Obama. Why would they crawl in the dust in order to let Obama score a victory at their expense? Will they get support for this back home? Of course not.
They can sit tight. This will cost them nothing. If the economy tanks, Obama will get blamed. He is the President. Presidents take the hit for bad economies. Congress never does.
Obama is going to lose this showdown. He sent Turbo Tim into the shark-infested waters on Capitol Hill, but that will not save him. He will get blamed. Geithner is preparing to depart for greener pastures. Boehner knows this. Capitol Hill knows this. Why should Boehner grovel? He did that in 2008, eating his mud sandwich in public. Secretary of the Treasury Hank Paulson and the New York bankers had a good laugh at his expense. Why should he let the former president of the New York Federal Reserve Bank do it again to him? He buckled in 2008. Watch him buckle.
Obama will do the groveling, if any, not Boehner.