Why did the cliff hit so badly

Haggling, phoning, tactical - the dance of US politicians on the cliff

McConnell picked up the phone and called Biden on Sunday afternoon. "Does anyone down there know how to forge a deal?" He asked, remembers one of his co-workers who overheard the conversation. On a later phone call, he is said to have pleaded with the Vice President: "We can work it out - but you have to join in." . " The next day the two men worked feverishly on a last-minute pact. Employees say they spoke on the phone 15 times in a day and a half.

John Boehner's pirouette

On Tuesday evening, Congress approved the bill. Despite the deep concerns Senator Reid had raised after speaking with McConnell. Though Reid had advised the White House to break off negotiations and move on with the fallback plan because that would guarantee a better deal. In addition, numerous conservative Republicans in the House of Representatives had spoken out against the draft, which is why their spokesman John Boehner had to do a legislative pirouette in the end.

But McConnell and Biden are seasoned pullers who negotiated the big US tax compromise in 2010. They achieved the breakthrough single-handedly. They knelt so deeply into the negotiations that McConnell and President Obama only talked to each other once on the phone - and not until the very end.

Both politicians were highly praised for their work on Wednesday, but also received criticism. One conservative mockingly called the agreed tax hike for wealthy Americans the "McConnell tax hike." Conversely, some Democrats soon only spoke of the pact as "Biden's buckling" because the tax hikes for the rich weren't as high as Obama had promised.

Another shortcoming of the agreement: some of the most sensitive questions have remained open. So the search for more ways to cut expenses will continue in the new year. In addition, Congress has yet to vote on raising the government debt ceiling.

On Friday afternoon, the top American politicians made one last attempt to prevent the impending fall over the fiscal cliff. President Obama had invited the leaders of Congress to the White House and asked McConnell and Reid to negotiate a pact that would stand in the Senate. This is what insiders say who know about the meeting.

The Senate Republican leader initially offered to postpone a number of the spending cuts planned for 2013 if the government changed its criteria for measuring inflation in return. As a result, the state would have had to pay fewer social benefits to needy Americans over time.

The answer from the Democrats was a long time coming

Hours later, Republican McConnell employees made an initial offer to Democrat Reid. According to well-informed circles, they agreed to allow tax increases for families with a household income of more than $ 750,000 a year. In doing so, they moved slightly away from Boehner's original demands to keep Bush-era tax rates on all incomes below $ 1 million.

Ultimately, however, their admission was still a long way from Obama's last offer to raise taxes for anyone who earns more than $ 400,000 a year.

Reid's office did not reply until the afternoon of the following day. McConnell's associates speculated that the Senate majority leader was trying to buy time and then force the Republicans to adopt a fallback plan at the last minute. He would then have increased taxes for all Americans with an annual income above $ 250,000 and expanded unemployment benefits. Until Saturday evening there was a lively back and forth between the two negotiators' offices, which are only a few meters apart in the Capitol - the seat of the US Parliament.

By the end of the day, McConnell had cut his demands significantly: The previous tax rates should only apply to individuals with an annual income of less than $ 450,000 and families with a household income of less than $ 550,000. Again they waited. Finally, a Reid employee said the Democrats would not make a new offer until the next morning.

But on Sunday the hours passed without anything happening. At 1 p.m., Reid's office manager, David Krone, finally called McConnell's office. There would be no more counter-offer, he said. The negotiations had stalled.

McConnell directed his secretary to call Vice President Biden. This didn't get through, so the Republican went straight to the Senate floor to announce that he had just called Biden.

"The Vice President and I have worked together before, and I think we can do it again," he said. "I'm ready to get this through. But I need a dance partner."

The Vice-President was completely unprepared for the statement. Before he called McConnell back, he discussed further action with President Obama. The two decided it was worth a try.

Obama made his concern very clear

At around 3:30 p.m. on Sunday afternoon, Vice President Biden called Republican negotiator McConnell and made an initial proposal. The White House plans to raise taxes for individuals with annual incomes over $ 260,000 and for married couples with household incomes over $ 450,000. Biden added that the government would be flexible on the upper income tax ceilings if in return the Republicans would accommodate them in taxing large inheritances.

Over the next nine hours, McConnell and his team spoke to the Vice President and his staff at the White House over and over again in order to get the fiscal pact off the ground. Employees say that both sides went through each point of conflict individually.

At around 8 p.m., President Obama, Vice President Biden and their key staff sat down in the Oval Office to discuss McConnell's demands. Obama made it clear that he would not support a pact that would keep taxes on income over $ 450,000. He insisted that unemployment grants continue for a full year and that no other cuts are an option. In addition, the Republicans would have to agree to postpone the spending cuts that will take effect automatically in the next few days.

In the next few hours, both sides set about drawing up a tax plan with a majority. But that almost disappeared because there was no agreement on spending cuts. The Democrats wanted to postpone the automatically threatened cuts, but did not want to finance the delay through cuts elsewhere. The Republicans, on the other hand, insisted that the delay should be paid for. Almost all of New Year's Eve, both camps worked on a compromise.

Away with the spending plan, bring on the tax part

The effort was almost dashed by an appearance by Obama's public speaking in Washington about the negotiations. That caught the Republicans off guard. Shortly after the president's speech, McConnell appeared before the Senate and said the tax dispute had been resolved. Now the Democrats in the Senate should vote on the tax part of the planned fiscal agreement alone. In doing so, he delayed the fight over spending cuts.

Negotiations were resumed, and eventually the White House and McConnell's staff agreed on a plan that included enough tax increases to finance the postponement of spending cuts. On Tuesday morning, the Senate approved the compromise with 89 votes to 8.

In the House of Representatives, however, the newly found pact encountered hurdles. Conservative Republicans complained that while taxes were raised on incomes over $ 450,000, there were no major spending cuts in return. They also complained that Medicare health insurance and other social programs would not be reformed. Even the second most senior Republican in the House of Representatives, Eric Cantor, had significant objections.

Boehner also quietly expressed doubts about the bill that the Senate had approved. But when a Republican colleague asked him how he would behave on Tuesday morning, he said he would vote for the fiscal pact. This is reported by someone who was present at the conversation.

Boehner gave his camp a choice: either vote for the Senate draft in its current form. Or you have to add the addition that another 300 billion dollars will be cut from the state budget. But that would destroy the pact, he warned, and the US would fall over the fiscal cliff.

In the end, the conservatives rejected the idea with the addition. At 11 p.m. on New Year's Day, the House of Representatives approved the bill. 151 Republicans, including Eric Cantor, voted against.

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