Obama Bets Re-Election Gave Him Power to Win Fiscal Cliff

President Barack Obama’s hard stance on the “fiscal cliff” talks is a bet that his re-election gave him the political clout to force Republicans to accept higher taxes on upper income Americans as a first step toward reducing the federal deficit.

Obama’s aggressive posture was shown in the proposal Timothy F. Geithner laid out for congressional leaders last week: a reprise of the president’s prior budget proposals, with $1.6 trillion in tax increases and about $350 billion in health care savings, primarily in Medicare. He also asked for an Aug. 1 deadline for decisions on income tax overhaul and further spending cuts.

“You could see the shock in the Republicans -- this is not what they were expecting from the White House,” said Stan Collender, managing director of Qorvis Communications LLC in Washington and a former staff member for the House and Senate budget committees. “There was almost euphoria among Democrats that the president was playing hardball.”

The two parties are in stalemate over what spending cuts and revenue increases should be approved to cut a budget deficit that’s exceeded $1 trillion for each of the four years Obama’s been in office. The administration says no agreement is possible unless Republicans agree to increase tax rates for the highest earning Americans, a stance underscored by Geithner in a sweep of the Sunday talk shows. Republicans oppose any tax rate increase and demand deeper cuts than Obama has offered, a line that House Speaker John Boehner drew on one show yesterday.

No Compromises

Both administration officials and congressional Republicans say they want a deal before year’s end -- without either side publicly offering any compromises.

“There’s not going to be an agreement without rates going up,” Geithner said in a taped interview that aired yesterday on CNN’s “State of the Union” program. Republicans will “own the responsibility for the damage” if they “force higher rates on virtually all Americans because they’re unwilling to let tax rates go up on 2 percent of Americans.”

Obama wants to boost top income-tax rates back to the levels they were when President Bill Clinton left office. The top rate then was 39.6 percent, compared with 35 percent today.

Boehner said Republicans aren’t ready to give in, and the president should take the lead by offering concessions.

House Majority

“They must have forgotten that Republicans continue to hold a majority in the House,” Boehner, an Ohio Republican, said on “Fox News Sunday.” “The president’s idea of a negotiation is ‘roll over and do what I ask.’ We need to find common ground, and we need to find it quickly.”

Collender puts the odds of failure at 60 percent, as both sides need to prove their mettle to core supporters.

The risk for Obama is that Republicans will match his brinkmanship and no deal will be reached. The result would be the “fiscal cliff,” the more than $600 billion in automatic spending cuts and tax increases that start kicking in automatically at the beginning of the new year.

The nonpartisan Congressional Budget Office said in an August report said the tax increases and spending cuts would shrink economic output next year by 0.5 percent and push the unemployment rate to about 9 percent.

Moody’s Investors Service said in September it may join Standard & Poor’s in downgrading the U.S.’s credit rating unless the president and Congress reduce the percentage of debt to gross domestic product.

Markets React

Stocks have been whipsawed since the election as Obama and Boehner dueled in public.

The benchmark Standard & Poor’s 500 Index (SPX) increased 0.5 percent to 1,416.18 last week and it extended its rally since Nov. 16 to 4.1 percent. The Dow Jones Industrial Average advanced 15.90 points, or 0.1 percent, to 13,025.58.

The bond market hasn’t demonstrated the same level of concern. While total national debt has soared to more than $16 trillion from less than $9 trillion in 2007, U.S. borrowing costs have tumbled. The yield on the 10-year note touched a record low 1.379 percent July 25, down from more than 5 percent in mid-2007.

Obama’s strategy is borne, in part, out of lessons Obama and his advisers take from the failed 2011 attempt to reach a grand bargain on long-term debt reduction.

Obama and Boehner tried to forge a compromise in private talks. Instead of clearing the path, their effort collapsed and served to increase resistance among members of both parties in Congress.

Campaigning Strategy

The president’s team, particularly his political advisers, concluded that it was a mistake to stay in Washington instead of campaigning on behalf of his plan. So on Nov. 30, Obama took Air Force One to Pennsylvania, where he spoke at a toy factory on the need for deficit action -- including raising top-income tax rates. His appearances have been tied to campaign-style appeals for support on the Internet.

In 2011, Democratic backers were alienated by Obama’s willingness to offer deep cuts in entitlement programs, such as Medicare and Social Security, without getting Republicans to agree on more revenue from taxes on high-income earners.

Jim Manley, a Democratic strategist and former aide to Senate Majority Leader Harry Reid, said Obama’s team made the mistake of holding on too long to the idea that Boehner and Senate minority leader Mitch McConnell would compromise.

“They took that lesson to heart and they’re not going to allow themselves to get suckered into reaching bad agreements to get a deal,” Manley said.

Labor Support

Obama’s allies say the president’s election victory and polls showing a majority of Americans support raising taxes on top earners means he doesn’t have to make the same concessions on entitlements that he did in the summer of 2011.

“Unlike last year, Democrats now have all the negotiating leverage, and Republican hostage-taking threatens not just the economy, but the future of the Republican Party,” Richard Trumka, president of the AFL-CIO who attended a fiscal cliff meeting at the White House last month, said in a Nov. 30 statement. Republicans “are still insisting on the very things voters rejected so resoundingly: tax cuts for the wealthiest two percent and benefit cuts to Social Security, Medicare and Medicaid.”

The administration has rejected Republican complaints that it’s not offering enough specifics.

Obama’s Cuts

The White House is proposing spending cuts of about $2.4 trillion. That consists of $1 trillion in cuts already enacted last year, $350 billion in health-care savings, $250 billion on non-health programs, such as farm subsidies, and $800 billion as war costs are pared.

The administration proposes $1.6 trillion in tax increases, with about $866 billion of that from allowing income-tax and estate tax cuts expire for the wealthiest 2 percent of Americans. Obama also proposes about $200 billion in “economic growth” incentives, including stimulus programs, subsidies for mortgages deemed underwater and and extension of the 50 percent bonus depreciation.

Besides campaigning outside Washington, Obama has been selling his stance at the White House. Over the last several weeks, he’s hosted groups of business leaders, assuring them that he’ll accept entitlement cuts if he can win his push for higher tax rates on wealthy individuals like themselves.

Republicans, who won another two years in control of the House, are warning Obama that he’s not the only one to have re- election on his side, and say he’s overplaying his hand.

Frustrated Republican

Representative Pat Tiberi, an Ohio Republican and a member of the tax-writing Ways and Means Committee, said he’s frustrated at Obama’s approach.

“Clearly, the president won 50 states and 75 percent of the vote,” he said. “That’s what they’re acting like.”

Before the election, Republicans privately believed Obama would cave in a budget deal to avoid risking the fiscal cliff, yet after the last week, they see it as a possibility.

“The president has decided, I am convinced, that he wants to just go over this contrived cliff because that’s exactly what he’s wanted,” Senator Jim DeMint, a South Carolina Republican, said in an interview. “He wants more tax revenue, and he wants to cut the military. So that’s what’s going to happen.”

Republican opposition to a $1.6 trillion in tax increases over a decade, $50 billion in stimulus spending, home mortgage refinancing and Obama’s plan to end direct Congressional control over raising the debt ceiling should be taken in context, said Patrick Griffin, former legislative affairs director under President Bill Clinton.

“You’ve got to open with something,” Griffin, who is associate director of the Center for Congressional and Presidential Studies at American University in Washington. “And, they’re still talking.”

Egyptian Court Postpones Ruling on Constitutional Assembly

Egypt’s constitutional court on Sunday put off its much-awaited ruling on the legitimacy of the Islamist-led legislative assembly that drafted a new charter last week, accusing a crowd of Islamists outside the courthouse of intimidating its judges.

What actually took place at the courthouse, however, is a matter of dispute.

Calling Sunday “a dark black day in the history of the Egyptian judiciary,” the Supreme Constitutional Court charged in a statement that a mob of Islamists had blocked the judges from entering the courthouse, in an “abhorrent scene of shame and disgrace.”

Approaching the court, the judges saw crowds “closing the entrances of the roads to the gates, climbing the fences, chanting slogans denouncing judges and inciting the people against them,” the statement said, adding that “the threat of harm” prevented the judges from entering. The judges said they were suspending the court’s sessions until they could resume their work without “psychological and physical pressures.”

While the judges blamed the Islamists, the Islamists accused the judges of manufacturing a melodramatic excuse for failing to show up. And the contradictory narratives captured a clash between the judges — appointed by Hosni Mubarak, the former president — and Egypt’s new Islamist leaders that has thrown the political transition into a new crisis 22 months after Mr. Mubarak’s ouster.

Egyptian courts had previously dissolved both the elected Parliament and an earlier Constitutional Assembly, and the breakup of the current one would have completely undone the transition. President Mohamed Morsi cited the pending ruling on Nov. 22 when he put his own edicts above judicial review until ratification of the constitution, saying that he intended to protect the assembly until it finished its work.

That same apprehension about the ruling drove the assembly to rush to approve a constitution just before dawn on Friday, over the objections of secular parties and the Coptic Christian Church, before the court could act.

The judges’ statement on Sunday was a counterattack, and the scene outside the courthouse was much quieter than their statement described. A line of hundreds of riot police officers backed by a fire truck and several armored personnel carriers were on hand to secure the judges’ entry to the courthouse, and several people were seen coming and going without any difficulty.

The Interior Ministry said in a statement on its Web site that it had arranged to secure the entrance and protect the judges, that the protests were “peaceful,” and that a number of judges had already arrived safely.

On the other side of the police line was a relatively staid crowd of a few hundred demonstrators from the Muslim Brotherhood, Egypt’s mainstream political group, and its political arm, Mr. Morsi’s Freedom and Justice Party. Like many of the group’s demonstrations, it was a mostly middle-aged, middle-class crowd of men in sweaters and a few neckties. By around 10 a.m., some were chanting slogans, but others were sitting on the ground reading newspapers. Many carried placards with Mr. Morsi’s picture or banners with the logo of his party, and one was reading its Web page on his iPad.

“We immunize the constituent assembly, and dissolve the constitutional court,” they chanted. “Freedom is coming, coming.” Some chants were directed at Judge Tahani el-Gebali, who is known for her political activism and opposition to the Islamists.

Magdy Hamed, 47, a businessman and member of the Brotherhood’s party, said the demonstrators had done nothing to stop the judges from entering. “We didn’t stop them,” he said. “We are asking them to come down and do their job.”

Mahmoud el-Akhas, 51, another businessman and party member, interjected, “We are here to exert pressure on the Supreme Constitutional Court to comply with the will of the people.” He reiterated the fears of many Islamists that the court might even seek to annul the presidential decree that granted Mr. Morsi power over the generals who ruled after Mr. Mubarak was ousted.

“The Egyptian people like stability,” Mr. Hamed said. “We don’t want chaos, and we don’t want to start this transition all over again.”

Elsewhere, the battle over control of the transition’s final stage appeared to widen. A few hours later on Sunday, leaders of the largest association of judges tried to block a referendum on the new constitution scheduled for Dec. 15, by announcing that its members would refuse to perform their customary roles as election supervisors.

Leaders of the Judges Club, as the association is called, have been outspoken opponents of the Islamists. On the day of the presidential election, its leader tried to undermine Mr. Morsi by holding a news conference to accuse his campaign of fraud and other violations, though no systematic irregularities were ultimately found. The club has already called for a nationwide judges’ strike to protest Mr. Morsi’s attempt to claim temporary powers above the judiciary, and Mr. Morsi’s aides say they have been considering other options if the judges refuse to monitor the referendum.

The Islamists in the Constitutional Assembly, meanwhile, have apparently struck back at their foes on the court. Egyptian state news media reported the existence of a little-noticed clause tucked into the draft constitution that appears to single out Judge Gebali, the Islamists’ bête noire, for removal from the bench.

The provision would keep the president of the court and its 10 most senior judges, but remove more junior members, and the 11th in seniority — the first who would be forced off the bench — is Judge Gebali. “She makes no secret of her concern about the rise of the Islamists, and Islamists have come to see her as a justice who rules on the basis of her political preferences,” said Nathan Brown, a scholar of the Egyptian legal system at George Washington University. “If the constitution is passed and goes into effect, she will lose her position on the bench immediately because of a clause that seems designed with one purpose in mind: to dismiss her.”

A report from the international group Human Rights Watch calls the draft constitution “mixed” in its protection of human rights, with some possible loopholes undermining broad protections. But secular groups called for a march on Sunday to demand that the president cancel the draft, charging that it would “restrict the political, civil, economic and social rights and freedoms of Egyptians.” The groups said it “expresses the vision of one party,” the Islamists.

It is unclear when the constitutional court might resume its work or issue a decision. As of Sunday evening, small groups of Islamists had set up tents and appeared prepared to sleep outside on the courthouse lawn, overlooking the Nile.

Japan Sasago tunnel collapse killed nine

The BBC's Rupert Wingfield Hayes says emergency inspections of other sections of the tunnel - and of other tunnels in Japan - are taking place

Nine people are now confirmed to have died after a major tunnel collapsed in Japan, officials say.

The bodies were found in three vehicles that were crushed by fallen concrete panels in the Sasago tunnel, about 80km (50 miles) west of the capital Tokyo.

A fire broke out after the tunnel caved in on Sunday, and a number of survivors fled to safety on foot.

The usually busy tunnel remains closed, as police are investigating potential negligence.

There will be serious questions about how a major tunnel on one of Japan's most important traffic arteries could have failed so catastrophically, the BBC's Rupert Wingfield Hayes in Tokyo reports.

The private company that runs the highway has said the tunnel was given a major inspection just two months ago and was given a clean bill of health, our correspondent adds.

Emergency workers said that five bodies were recovered from a van early on Monday. They were identified as three men and two women, all in their twenties and from Tokyo, Kyodo news agency reported.

Another woman, aged 28, who had been in the vehicle survived.

Three bodies were found in a car and another body in a lorry.

The driver of the lorry had reportedly telephoned for help from inside the 4.3km (2.7 miles) twin-bore tunnel - one of the longest in Japan.

Part of the tunnel collapsed at 08:00 local time (23:00 GMT Saturday).

Thick black smoke was seen billowing from the tunnel, hampering rescue efforts.

Pictures from closed circuit TV cameras inside the tunnel later showed a section of up to 100m (328ft) that had caved in on the Tokyo-bound lanes on the Chuo Expressway in Yamanashi prefecture.

A reporter for public broadcaster NHK described driving through the tunnel as it began to collapse, seeing other cars trapped and on fire. His car was badly damaged, he said.

Another survivor told the broadcaster that he saw "a concrete part of the ceiling fall off all of a sudden when I was driving inside. I saw a fire coming from a crushed car".

Survivor Tomohiro Suzuki said: "A part of the ceiling, just as wide as the road, had collapsed straight down and broken in the middle into a V-shape."

He and his family walked for an hour to get out, with the smoke worsening.

"I heard after a while on the public address system that a fire had occurred inside the tunnel and the sprinkler system was going to be activated," he told Jiji Press.

"I kept wondering when the fire would spread and catch us," Mr Suzuki said.

Japan is prone to large earthquakes, but none was reported in the area at the time.

Some experts have said that structural failure may be to blame - but this has not been confirmed by the authorities.

Romo sets TD mark as Cowboys beat Eagles, 38-33

Tony Romo knows what matters the most when it comes to the Dallas Cowboys. So while it’s nice to break Troy Aikman’s franchise record for career touchdown passes, he’s focused on getting his team to the playoffs.

Romo threw three second-half touchdown passes to answer a strong game by Philadelphia’s rookie duo of Bryce Brown and Nick Foles and the Cowboys sent the Eagles to their eighth straight loss with a 38-33 victory Sunday night.

The first two scoring tosses from Romo erased seven-point deficits, including a 23-yarder to Dez Bryant that was vintage Romo and broke Aikman’s career mark of 165 TD passes. Romo scrambled to his right and threw back across the field to Bryant, who weaved through the Philadelphia defense to tie it at 17 in the third quarter.

Romo tied it again at 24 on a throw to Miles Austin and had one more answer after Brown and Foles led the Eagles to a go-ahead field goal. He threw deep to Bryant for 35 yards on third down, and Bryant found his way into the end zone again by taking a screen pass 6 yards just inside the pylon for a 31-27 lead with 5:40 remaining in the game.

“It’s about winning games,” said Romo, who was 10 of 10 in the second half and completed his last 12 passes. “We desperately had to have this win tonight, and our team fought like heck to get a win.”

The Eagles’ slide continued despite 169 yards rushing and two touchdowns from Brown a week after he set a team rookie record with 178 yards on the ground.

After Romo’s go-ahead touchdown pass, Dallas went up by 11 when Morris Claiborne returned a fumble by Brown 50 yards for a touchdown.

Brown’s fumble snapped a streak of eight straight scoring drives by both teams. It was the second straight week that he mixed big runs with critical fumbles after losing the ball twice in last week’s loss to Carolina.

“Up until that fumble, he had done a heck of a job,” Eagles coach Andy Reid said. “He was trying to get every stinking yard he possibly could.”

Philadelphia (3-9) had a chance for an improbable rally when Damaris Johnson returned a punt 98 yards with 31 seconds left. After a failed 2-point conversion, the Cowboys recovered the onside kick and ran out the clock.

Foles, who was 22 of 34 in his third start in place of Michael Vick led the Eagles to a 27-24 lead early in the fourth quarter on a 43-yard field goal by Alex Henery who now has the longest current field goal streak at 21 after Cleveland’s Phil Dawson had a kick blocked Sunday.

“It was a tough loss,” Foles said. “I’m proud of our team with the way they fought. We have to keep working and stick together.”

Dallas running back DeMarco Murray who started after missing six games with a sprained right foot, finished with 83 yards and a touchdown. Romo was 22 of 27 for 303 yards with no interceptions and a passer rating of 150.5.

Brown, who started his first game since high school when he filled in for LeSean McCoy last week, went in untouched on both of his scoring plays in the first half. He scooted around the left side for a 7-0 lead and trotted through a big hole up the middle to make it 14-3 midway through the second quarter.

Vick and McCoy are sidelined by concussions.

Philadelphia was in front after the first quarter for the first time all season, but Dan Bailey got the Cowboys on the board with a 39-yard field goal early in the second. DeMarco Murray’s 1-yard touchdown run trimmed the Eagles’ lead to 14-10 with 41 seconds left in the half.

Romo overcame a holding penalty and an 8-yard loss when Kevin Ogletree fumbled a handoff on a reverse by completing third-down passes to Jason Witten Bryant and Miles Austin. Romo then found Witten all alone in the middle of the field for 28 yards to the 1, setting up Murray’s score.

The Eagles answered by driving 52 yards in 35 seconds to a 43-yard field goal by Henery on the last play of the half. Foles completed a 29-yard pass to Jason Avant to get the Eagles in scoring range.

Brown got Philadelphia’s first scoring drive going with a 42-yard run up the middle and finished it with a 10-yard run.

Trailing 7-3 early the second quarter, the Cowboys went three and out after a third-down completion from Romo to Witten was overturned on a challenge by Reid. Replay showed the ball hitting the turf as Witten grabbed it.

Two plays later, Brown went 39 yards down the sideline and later scored from 5 yards out.

The Cowboys welcomed Murray back by running him three straight times to start the game after calling 52 straight pass plays from the second quarter to the end of a Thanksgiving loss to Washington. The first time Murray went to the sideline, Romo was sacked by Brandon Graham on third-and-3.

After the first Philadelphia touchdown, the Cowboys drove down the field for Bailey’s field goal. Romo found Witten for 11 yards on third-and-10 and escaped pressure to complete a pass to Cole Beasley for 13 yards to the Eagles 41. Romo also had a 15-yard scramble.

Not only did Dallas get Murray back, but the offensive line was closer to full strength. Center Ryan Cook returned after missing time with a knee injury, which allowed Mackenzy Bernadeau to return to guard after two starts at center.