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Sen. Grassley: GOP Has 'Leverage' Over Obama on Fiscal Cliff

By Jim Meyers and Kathleen Walter   |   Wednesday, 26 Dec 2012 06:44 PM

Longtime Sen. Chuck Grassley tells Newsmax that Republicans have a “great deal of leverage” on President Obama because they can refuse to raise the debt ceiling unless he agrees to spending cuts.

The Iowa Republican also says the president wants the nation to go over the fiscal cliff because it will raise everyone’s taxes — then he can be seen as saving the middle class by lowering their taxes in the new year.

Story continues below video.

Grassley was first elected to the Senate in 1980. He is member of the Budget and Finance committees and the former chairman of the Finance Committee.

In an exclusive interview with Newsmax TV, Grassley addresses claims by some Republicans that President Obama wants the nation to go over the fiscal cliff and let the Bush-era tax cuts expire.

Alert: Will Boehner, Obama Avoid the Fiscal Cliff? Vote Here

“He hasn’t shown any leadership because he doesn’t know how to compromise. He does want us to go over the cliff because he’s holding all the cards. He’s got nothing to lose. You go over the cliff, everybody’s taxes are going to go up, particularly the two percent where he wanted the rates to go up.

“Then he’ll come back after the first of the year, suggest for people under $250,000 to actually decrease their taxes, so he not only [gets] a tax increase on the wealthy, but he’s going to end up being a person that saves the middle class because going over the cliff raises taxes on everybody.

“He’s in a position where he gets everything and he can still lower taxes for the middle class after the first of the year. Maybe they’ve only been going up for a couple of weeks or maybe a month, but eventually, we’re going to not raise taxes on the middle class.

“The sad commentary is if we had proper presidential leadership, we wouldn’t have to be even talking about this. This president has not wanted to sit down and work hard in negotiating like previous Democratic presidents, like President Clinton who was willing to sit down with Speaker [Newt] Gingrich and work compromises.”

Considering that the president refuses to back down on raising taxes on America’s highest-income earners, Grassley was asked, what other options do Republicans have?

“If we do go over the cliff then the focus next year’s going to be on raising the debt ceiling and we’ve got a great deal of leverage on the president on raising the debt ceiling because we don’t have to raise it unless we’re going to get some reduction in expenditures.

“The proposition that was established in August of 2011 is a pretty good proposition that Republicans are willing to follow now — for every dollar increase in the debt ceiling, we’re going to have to have a dollar decrease in expenditures.”

Some Republicans have endorsed Obama’s call for a deal that would protect most Americans from tax increases, raise taxes on high-income Americans, but put off resolution on spending cuts.

Grassley observes: “Anything’s better than having to go over the cliff, but the problem up to this point is that the president’s been talking just about tax increases and you can have all of the tax increases he wants and you’re going to take care of eight to 12 percent of the annual deficit. It’s about time we start talking about the other 90 percent. We have a spending problem. We don’t have a taxing problem.”

Asked if he could support such a deal, Grassley says: “The answer is yes but I’d want to know more details. In other words, how much money does the president want to raise? How much is he willing to cut in expenditures? Is he willing to do something about tax reform and about entitlements – Social Security, Medicare and Medicaid?”

He doubts the GOP would ultimately support such a deal, however, although he believes it is possible “depending upon the attitude of the president, wanting to do something about spending and entitlements and tax reform, even though it can’t all be done between now and the end of the year.

Alert: Will Boehner, Obama Avoid the Fiscal Cliff? Vote Here

Commitment to do that next year is very, very important for most Republicans.”

The Club for Growth and other conservative groups said they will target any Republican who votes for a tax hike. Asked if these Republicans should be worried about a primary challenge, Grassley responds: “Of course, we’re all subject to the electorate and you’ve got to take that into consideration.

“Grover Norquist and his organization do a tremendous job because he’s constantly reminding the people in Congress, and also the grassroots of America, that we don’t have a taxing problem, we’ve got a spending problem. You can raise all of the taxes the Democrats want to raise but you’re not going to get us out of this deficit situation. If you’re going to get out of the deficit situation, you’ve got to tackle the spending side of the ledger.”

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Longtime Sen. Chuck Grassley tells Newsmax that Republicans have a great deal of leverage on President Obama because they can refuse to raise the debt ceiling unless he agrees to spending cuts.

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