Obama gets his class-warfare trophy, but the fiscal cliff is just one battle in a long war

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Daniel Mitchell
Senior Fellow, Cato Institute
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      Daniel Mitchell

      Dan Mitchell is a Senior Fellow at the <a href="http://www.cato.org/">Cato Institute</a> in Washington, DC. He is one of the nation's experts on the flat tax and has been the leading international voice in the fight to preserve tax competition, financial privacy, and fiscal sovereignty.

      Dan's work has been published in the Wall Street Journal, New York Times, Washington Times, Washington Post, National Review, Villanova Law Review, Public Choice, Journal of Regulation and Social Cost, Emory Law Journal, Forbes, USA Today, Offshore Investment, Playboy, Investor's Business Daily, and Worldwide Reinsurance Review. He has appeared on all the major networks, including CBS, NBC, ABC, FOX, CNN, CNBC, MSNBC and C-SPAN.

      Prior to joining Cato, Dan worked for the Heritage Foundation, Senator Bob Packwood, and Citizens for a Sound Economy. Dan also spent more than three years beginning every day by co-hosting a television show. Dan earned a Ph.D. in economics from George Mason University and undergraduate and Masters degrees from the University of Georgia.

Next Monday, Notre Dame has the near-hopeless task of playing Alabama for college football’s national title. By all accounts, this is a mismatch, featuring the top team from the nation’s strongest conference against an Irish squad that backed into the championship game because so many other teams stumbled. So very few people will be surprised when the Crimson Tide emerges victorious.

This is a good description of what just happened with the fiscal cliff fight in Washington. President Obama entered the battle in a very strong position. A big tax increase automatically was going to happen even if he did nothing, so he was holding all the cards. He could — and did — tell Republicans that they had an unpleasant choice of either accepting that big automatic tax increase or acquiescing to his class-warfare plan.

No wonder Republicans have been acting so discombobulated. They had no winning strategy.

Sure, they could have been more aggressive and threatened to go over the cliff (the automatic tax hike) if Obama wasn’t willing to be reasonable. That’s the strategy I would have pursued, but I’m the first to admit that this would have been a high-risk approach. After all, don’t we all suspect that Obama secretly wants the biggest possible tax hike, even if it also screws the middle class?

Yes, GOPers prevailed with that game of chicken in 2010, but that was back when Obama had to worry about getting re-elected. Now, he’s presumably most interested in cementing a legacy of more statism.

So I’m not overly upset with Republicans now that we’re stuck with this new tax increase.

I am upset with many of them, however, because they were in office during the Bush years and they voted for much of the wasteful spending that helped create the current fiscal mess. Many GOPers beat their chests about being against tax hikes, but that’s not a very credible or sustainable position when they’re also voting for the no-bureaucrat-left-behind education bill, the corrupt farm bills, the pork-filled transportation bills, the prescription drug entitlement, the TARP bailout, and the 2008 faux stimulus.

But now that the fiscal cliff is in the rear-view mirror, where do we go from here?

The real issue is whether anybody has learned any lessons. Will Republicans now take a stronger stand against wasteful and inappropriate spending?