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Politico’s Ben White, author of the widely read Morning Money email newsletter, is pretty plugged in with what’s happening at the nexus of Wall Street and DC, and he’s pretty positive in his latest note.He writes in today’s Morning Money:
M.M.’S VIEW: IT’S ALREADY OVER – We’ve said it before but it bears repeating: there seems little chance the cliff battle will go near or past the December 31 deadline. Nearly every signal from Republicans suggests they understand they have lost the war over taxes going up on the wealthiest Americans and are just trying to figure out how to get the least objectionable deal that includes real spending cuts and a trigger for tax and entitlement reform. It’s clear from polling that the GOP will get the blame if taxes go up on everyone on Jan. 1 and any subsequent damage to the economy and markets will fall squarely at the party’s feet.
Republicans are no longer ignoring such polls. And there is simply no way, after getting wiped out by last summer’s debt ceiling fight, losing terribly at the presidential and Senate level and barely hanging on to their House majority, that Republicans can afford or will allow themselves to be saddled with a politically disastrous fiscal cliff crash. So while talks will continue and the public kabuki will play out for a few more weeks, we are really just waiting on a final score.
Saying “It’s already over” is gutsy, but his analysis is much better than most people’s on this matter.
Everyone’s trying to use the same Debt Ceiling playbook, not recognising that the mechanics and the politics are not similar at all this time. The GOP is much weaker and the economy is much stronger, meaning reckless obstruction will be much less tolerated.
Arguably the bigger risk is not from the GOP side of things, but whether Obama will be able to get Reid and Pelosi along on the spending cut side of whatever equation they come up with, particularly if there are plans to cut entitlements.
This call is definitely in keeping with the vibe of the day. Markets are gaining, and it’s being attributed to Fiscal Cliff optimism.
And find out everything you need to know about the fiscal cliff below:
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