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Is It Time for Republicans to Give In?

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    WSJ Washington bureau chief Jerry Seib on reaching a compromise over the fiscal cliff.

  • Duration 3:41
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-- -- So is it time for the Republicans to just give me again do they have no choice can they win.

At all if they let us go off the -- joining us now Wall Street Journal Washington bureau chief.

Jerry side.

Jerry looks like Obama's Dublin for two for he wants to raise rates on the rich and he wants to cap deductions on the rich -- get -- both gone both place.

Well that as as -- said that's we're in opening position phase here the problem I think is that neither side.

It really is is moving fast enough to prevent.

The partisans from fought on both ways.

To really -- -- right now I think the danger is that as we get closer to the deadline you can't get those people that pull up their stakes and move in and -- -- deal so.

There's a compromise to be done in and I think that it will -- resolve some of -- -- issues in the middle I think the problem is going to be that if you get a compromise its top.

Will the troops below that -- perfect compromise still be there and while a lot people think we have a full month to work this out.

You actually worry that we've got only -- say December 15.

Well that's a good point I'm not sure exactly December 15 but if you -- -- have a bill them by the end of the year.

It's gonna take a couple weeks to get that done this Christmas in the middle obviously.

I think that that the actual deadline in practical terms to not go off the cliff is a little shorter than people think.

It and I think it probably is in the next couple of weeks now congress is congress they can do whatever they want you can go off the cliff for a while -- make everything you do retroactive but I think the point here.

Is that if you wanna prevent the psychological blow to the markets into the US standing in the world up by not cutting off the cliff at all -- gonna have to -- moving the next couple weeks.

-- Treasury Secretary Geithner said on face the nation yesterday there is quote no way.

That they'll reject compromise unless Republicans acknowledge the need to raise rates on the wealthiest Americans.

Is that merely a negotiating posture Jerry or do you think that that is now their stance -- matter what.

Well that's the great question I mean the you know -- the elephant in the room has always been rates you know Republicans have said we will give you revenues that will not give you rates Democrats are saying.

From revenues without rates are not enough to deal with the problem.

That's the where the standoff is I think everything else including entitlements -- probably be dealt with if that was if that impasse is resolved.

There ways to get around it you know you critics for example have a a rate increase that's not as great as the 39 point 6% top rate that prevailed in the Clinton Era.

Or you could have growth rates go up on personal income but not all small business income have a carve -- for small businesses there are ways around this.

If people want to get around about this that I think the risk now is that everybody is gonna get dug in on not getting around that basic impasse that the dangers of going off the cliff get.

A greater as we get closer to that this record 15 December 20 there it looks like Obama just have to extracted some kind of rate increase just to get good -- With his liberal base.

Now don't Republicans have far more to lose don't they look worse if we go off the cliff -- there refusing to raise taxes on merely 2% of people.

Well I think that is the danger for Republicans that not only do they look as if they're they've dug -- simply to support a tax rate for the higher income Americans.

But then you get into next year in everybody's rates have gone up.

And then we're in the in the business of negotiating a tax cuts and President Obama gets negotiated tax cut with Republicans which is a lot more fun -- lot easier do.

The negotiating tax increases so.

I'm not sure that they get more leverage as we go into the new year with the possible exception of the fact.

That the you know the debt ceiling will loom again will be hitting that debt ceiling and that may give Republicans some leverage down the road but in the short term I think you're right that the leverage probably goes more to President Obama right now I have fiscal -- fatigue all right thanks very much genocide.

Sure.

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