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American Enterprise Institute Senior Fellow Peter Wallison on the fiscal cliff negotiations.
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My next steps is concerned that we are going over the fiscal what he says President Obama seemingly is intent.
On pressing his post election -- managed -- -- tax increases on the wealthy and to eliminate.
The house's debt ceiling leverage joining us now from Washington DC Peter Wallace and former Reagan White House counsel.
Former member of the Financial Crisis Inquiry Commission a senior fellow at the American Enterprise Institute.
Peter good to have you here you believe we're going over the -- But I think there's a real danger this one can see.
A path for Obama that doesn't look so terrible if you if we do go over the cliff.
Then all the taxes go up but the Democrats have an opportunity to introduce legislation to reduce the taxes.
For 98% of the people leaving.
The wealthier people I guess if you call them wealthy the top 2%.
To act -- to stay at the higher rates but -- it's it's possible to do this.
It's possible but I have to ask you.
Surely.
The Republicans.
Have to understand and had to understand six months ago what would transpire.
In this lame duck session.
-- of congress what this president would press forward to.
The fiscal report the results of sequestration and agreements between the two parties.
Capitol Hill and the White House why would they not have thought out a position here.
Well you know one of the things that puzzles me about this is.
Even today that debate that the Republicans are engaged in is really a debate -- themselves.
The media talks about the tax increases that's almost all they talk about and the only thing that makes sense for the Republicans.
Is to try to get some serious control over the entitlements that's why they're in this game.
And yet you hear very little from the Republicans you'd think.
That the the speaker would get out and say -- Where -- ready to talk about were ready to talk about.
New revenue.
But I'm not get -- even get into that issue until the president moves his party.
We know what the problem is the Democrats don't want to talk about entitlement reductions at all the Republicans don't want to talk about taxes but.
The real issue facing this country is controlling spending not raising taxes.
Well not according to Nancy Pelosi appeared -- today I don't know if you sorry we reported -- I didn't I did it but the minority leader.
Actually said that we UK and I -- waited a deficit reduction.
I think this is the kind of mentality in good speaker Boehner must confront and deal -- what would think that would be a -- foreign but apparently not.
I -- has recovered by that I'm sorry.
No I'm saying I'm puzzled by he.
By the fact that he doesn't emphasize that much smaller really stick to say I'm not gonna talk about taxes how about the masses and not on the table until the president.
Comes forward with a plan on entitlements.
Europe either you -- formidable.
Negotiator in your own right experienced and I I just -- -- change you.
Why would anyone who's the leader of the Republican Party.
I frankly and -- -- position.
Not insist upon dealing with the president who has the superior power the superior position in advantage.
Not insist that any negotiation be at a specific table with specific parameters.
And in this nonsense that's out the periphery and and permeating the media.
Yep that's right well.
-- the president it and this is one of the reasons why the president may take us over the cliff.
Because I think he believes that he can get everything he wants by taking it right to the end and perhaps over the edge.
He has -- big megaphone of the presidency you can see what happens when he does anything it's covered in the newspapers discovered on television.
And he is getting his point across and he's keeping he's keeping the conversation about.
Tax increases and whether the Republicans to -- do.
But relatively minor tax increases.
And keeping the conversation away from the major question which is how that we control.
The out of that -- out of control entitlement spending it's an unbelievable situation for Republicans and I can't understand why -- in -- Well on this broadcast remember talk about the fiscal cliff without referring to the incipient.
Our cause the root of at all and that's why we hold I I believe it's entirely appropriate to hold the president accountable for the fiscal clip.
Because his is the only -- at work here is this president who has decided to issue and ultimatum.
First.
On taxes and and spent being raised on.
Only 2% of the people.
Secondly.
In insisting that the the debt ceiling issue be compounded with at all this is -- -- question an ultimatum the consequences -- -- What do you think.
Well us I'm afraid.
That even though the consequences are here is the consequences for the economy will be his.
I think he's -- and I think there's a pretty good evidence right now that he is betting that he can win this argument because.
And the the media.
And his megaphone.
Enable him to persuade the American people that the Republicans were really the cause of the the troubles that we will face if we go over that cliff.
-- history is littered with examples of those -- perceived and rationally so advantaged.
But came up against inventive creative energetic opposition that found a way to -- -- Peter Wallace and it's always sir great to talk when we appreciate your being here good to be here Lou thank you of.
