President Obama and Democrats are trying to back the GOP into a corner over tax hikes just as they did on the payroll tax fight a year ago.The thing is, if Republicans are worried about getting backed into a corner, they are worried about getting backed into a corner of their own making. They are the ones who decided to pass tax cuts with expiration dates. They did it back in 2001 and 2003, and they thought they were backing Democrats into a corner—because they thought Democrats would always be afraid of letting the tax cuts expire and getting blamed for higher tax rates. And in 2009 and 2010, the GOP's calculation was right (though it's worth remembering that the president actually won a fair bit of stimulus in return for extending all tax cuts).
The president and his party are arguing that Republicans should agree to extend the George W. Bush-era tax rates immediately on families earning up to $250,000 a year, and not dig in their heels to prevent rates from rising for higher-income earners. [...]
The GOP is worried, fearing Obama could jam them into a last-minute agreement as the nation approaches what Federal Reserve Chairman Ben Bernanke has dubbed a “fiscal cliff.” If Congress does nothing, all taxpayers will see higher bills next year.
But 2012 is not 2010—Republicans who once believed they could extend the Bush tax cuts for the wealthy forever simply by holding middle-class tax cuts hostage are afraid that their bluff is about to be called. And they have reason to be afraid. The economy is stronger today than it was two years ago and President Obama just won an election in which ending the Bush tax cuts for top income earners was a major issue. He's repeatedly vowed to not extend tax cuts on income more than $250,000 and this time congressional Democrats are supporting him.
Senate Democrats have passed legislation extending tax cuts on all income below $250,000 and the president says he'd sign it right away if House Republicans are willing to pass the bill. And when it comes down to it, House Republicans will be willing to pass it—because they know they will be the ones who get blamed if the tax cuts expire. They'll drag out the process as long as they can, hoping to change the political dynamic or win concessions on the spending side, but they really have no leverage. The Bush tax cuts for the wealthy expire at the end of the year and Republicans won't be willing to raise taxes on everyone else as punishment for that. So they are backed into a corner—but it's a corner of their own making.