Bad news for Republican Party negotiating leverage in a new ABC/Washington Post poll on the fiscal cliff which shows that a strong 49-40 plurality thinks Obama and Congress won’t reach an agreement on the fiscal cliff and that if no agreement is reached there’s a whopping 53-27 split between those who think Republicans in Congress will be to blame versus President Obama.
Elsewhere in the poll, 64 percent think the fiscal cliff will have a “major” effect on the U.S. economy, 60 percent say the effect will be negative, 43 percent say it will have a major effect on their personal financial situation, and 61 percent say that effect will be negative.
Relative to that polling what I’d say is that any nonretired person who thinks the fiscal cliff won’t impact his personal financial situation needs to think about the payroll tax holiday. Most working Americans probably don’t think of themselves as beneficiaries of a federal stimulus program, but if you have a job then for the past two years you’ve been benefitting from a major federal stimulus program. If we go over the cliff, I’m confident that Obama will strongarm congress into passing the Bush middle class tax cuts bill pretty quickly and that the bulk of the budget sequester will be rescinded or delayed. But the payroll tax holiday is a different matter. Obama’s fiscal-cliff proposal wisely includes extending the holiday, but it’s nowhere to be seen in Republican proposals and despite Chris Van Hollen’s best efforts the payroll tax holiday doesn’t see to have many champions among congressional Democrats.
This is what really ought to be worrying you about the standoff—the high chance that the payroll tax holiday will die whether or not we go “over the cliff.”