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Fiscal Cliff

The fiscal cliff involves US$600 billion in automatic tax hikes and spending cuts effective in early 2013 if US lawmakers fail to agree on reducing the budget deficit.

 

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US ECONOMY: ANALYSIS

Republicans reach out to Joe Biden to help resolve 'fiscal cliff'

Top Republican taps vice-president to be his 'dance partner' in a tortuous pas de deux that took them to the edge of a financial abyss

PUBLISHED : Wednesday, 02 January, 2013, 12:00am
UPDATED : Wednesday, 02 January, 2013, 5:15am

The Senate Republican leader Mitch McConnell decided it was time to deal directly with the White House when Senate budget talks stalled three days ago - though not with President Barack Obama.

"I needed a dance partner," McConnell said. "So I reached out to the vice-president."

Vice-President Joe Biden, 70, had been tapped by Obama as a dealmaker before, to draw on Biden's friendships, alliances and legislative experience from 36 years as a senator from Delaware.

He led Obama's deficit-cutting task force in 2011 and before that oversaw distribution of stimulus funds. Obama has asked Biden to recommend ways to control gun violence following the December 14 shootings in Newtown, Connecticut.

This time, it was McConnell's turn. He looked to the vice-president, with whom he served in the Senate for almost a quarter century, to help get the institution out of a jam. The clock was ticking down to a New Year's deadline for automatic tax increases and spending cuts.

Senate Democratic leader Harry Reid of Nevada could not speak for Obama, and some Republicans voiced suspicions that Obama might be content to go over the so-called fiscal cliff and let them take the blame.

Obama and House Speaker John Boehner, an Ohio Republican, met and failed to complete a deal. Boehner left McConnell to take over.

In the eleventh hour, McConnell saw Biden as both the fastest conduit to Obama and a good-faith negotiator. The accord they reached was passed early yesterday by the Senate, 89-8, as lawmakers seek to stave off more than US$600 billion in tax increases and spending cuts set to begin this month.

"The big thing is that McConnell knows Biden has 40 years of standing on what he says he'll do," said Ted Kaufman, a former Delaware senator and Biden's Senate chief of staff for 22 years.

Jared Bernstein, the vice-president's ex-chief economist, said McConnell and Biden have decades of familiarity and a shared interest in "give-and-take". "Simply put, they remember a day when politicians compromised," Bernstein said.

Biden went to the Capitol on New Year's Eve to pitch the budget agreement to Senate Democrats. After an almost two-hour meeting, and before lawmakers voted, Democrats including Senator Charles Schumer of New York said they expected wide support for the plan while Biden expressed optimism about its prospects. "I feel very, very good. I think we'll get a very good vote tonight," Biden said. Asked what his selling point to caucus was, he joked: "me."

Biden, who served in the Senate from 1973 until he took office in 2009 as vice-president, has been parodied in popular culture for his long-windedness and a penchant for verbal gaffes and others distractions.

In Congress, however, Biden's roots are deep. McConnell's outreach to Biden also emphasises a deficit of goodwill and shared experience between Obama and senators. "We're in a business where knowing people helps" and Obama is "a hard guy to get to know," said Senator Lindsey Graham, a South Carolina Republican.

Graham said Obama has not demonstrated a skill or enjoyment of negotiating.

"He's never had a legislative history of bringing people together or knocking heads. When I heard Joe Biden was given the green light, I thought, 'There's hope'."

Senator Carl Levin, a Michigan Democrat, said while interpersonal relationships make a difference in politics, deadlines trump everything. "The most single important element in the whole discussion is the clock."

On Sunday at 1.30pm, McConnell called Biden's office and left a message for the vice-president.

That was about 18 hours after Reid first told McConnell he couldn't counter offer Republicans' latest proposal on the talks to avert the fiscal cliff, said a congressional Republican familiar with the negotiations.

Biden returned McConnell's call soon after and the two men spoke about a half dozen times before calling it a night around 12.45am, said the official.

They were back on the phone by 6.30am on Sunday, and they spoke multiple times - sometimes one-on-one, sometimes with aides on the call, sometimes going over multiple provisions and sometimes speaking briefly.

While Congress missed voting by the deadline to avert the so-called fiscal cliff of tax increases and spending cuts, within 24 hours of McConnell's first call to Biden the contours of an agreement had come together.

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