In Budget Battle, There Are No Winners

Fiscal cliff deadlock means both parties, the President, and American people all lose.

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It's come down to this: With the budget talks stalled and the nation's political leaders sputtering and stymied, Washington appears to be just as dysfunctional as many everyday Americans feared.

So far, no one has emerged as a winner from the current budget negotiations between the White House and Congress, and there are plenty of walking wounded.

The biggest loser so far is House Speaker John Boehner, whose job could be in jeopardy after he was unable to muster the Republican majority needed to pass his version of an economic plan. It would have made deep cuts in spending and held the line on tax rates for everyone earning less than $1 million annually, but would have raised taxes on millionaires, as President Barack Obama wants. Hard-line conservatives refused to support Boehner's plan, arguing it didn't cut spending enough and contained tax increases for the wealthy, whom conservatives call "job creators." As a result, Boehner, an Ohio Republican, pulled the measure from consideration late Thursday. He explained in a statement that his bill "did not have sufficient support from our members to pass."

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The rejection of Boehner's plan was a debacle that humiliated the speaker and damaged his reputation as an effective negotiator. The House is not scheduled to meet again until after Christmas, increasing the likelihood of a prolonged deadlock.

On Friday morning, Boehner told reporters it's time for Obama and the Democrat-controlled Senate to move ahead. He noted that, despite the setback on Thursday night, the Republican-controlled House has already passed legislation to avoid the "fiscal cliff," although Obama and Senate Democrats have rejected the House proposals.

"Unless the President and Congress take action, tax rates will go up on every American taxpayer and devastating defense cuts will go into effect in ten days," Boehner said adding: "I don't want taxes to go up. Republicans don't want taxes to go up. But we only run the House. The Democrats continue to run Washington. What the president has proposed so far simply won't do anything to solve our spending problem. He wants more spending and more tax hikes that will hurt our economy. And he simply won't deal honestly with entitlement reform and the big issues that are facing our country."

[ENJOY: Political Cartoons on the Fiscal Cliff]

A prominent GOP strategist who advises many congressional Republicans told me the stalemate adds to the public's impression that politicians in Washington are "crazy" and that their actions are based on partisanship and not a spirit of compromise. The deadlock, if it continues, will deprive all sides of the credibility needed to make their cases to the country or to swing momentum their way.

Majority Democrats in the Senate are now mulling what to do next, such as whether to take a vote on still another version of the budget blueprint.

For his part, Obama is pushing his own plan, which would raise taxes on the rich and which calls for relatively modest spending cuts. White House Press Secretary Jay Carney said, "The president will work with Congress to get this done and we are hopeful that we will be able to find a bipartisan solution quickly that protects the middle class and our economy."

All sides are trying to avoid automatic tax hikes and deep spending cuts scheduled to start taking effect on January 1, unless there is a deal that would avoid this "fiscal cliff." Allowing those automatic provisions to take effect could result in another recession, economists warn.

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  • Ken Walsh covers the White House and politics for U.S. News. He writes the daily blog, "Ken Walsh's Washington," for usnews.com, and is the author of "The Presidency" column for the U.S. News Weekly. He can be reached at kwalsh@usnews.com and followed on Facebook and Twitter.