Former Bush Aide Hennessey: Republicans Shouldn’t Cave on Budget

While President Barack Obama is acting as if he can push Republicans around during budget negotiations, GOP congressmen should realize they have a lot of power to resist, says Keith Hennessey, director of the National Economic Council under President George W. Bush.

“While the president has a strong hand, he is overplaying it,” Hennessey, now a lecturer at Stanford’s law and business schools, writes in The Wall Street Journal. “Republicans have some leverage. They need to use it effectively.”

The president’s threat to veto a bill that doesn’t raise taxes enough and/or cuts spending too much is a bluff, he says. Recession is a real risk if Obama doesn’t sign a law to avoid the fiscal cliff — the $607 billion of tax hikes and spending reductions scheduled to being Jan. 1 if the government doesn’t act. And that risk is big for the president, Hennessey says.

“Even if he could shift all the political blame for such a legislative failure onto congressional Republicans, Mr. Obama cannot afford to risk a new recession that would irreparably damage his second term.”

The GOP also should realize that Obama’s positions put him to the left of much of his own party, Hennessey says. “Democrats up for re-election are not lemmings looking to follow Washington Sen. Patty Murray, who has welcomed a plunge over the fiscal cliff. Democratic Sens. Max Baucus and Mary Landrieu oppose the president's proposal to increase the estate tax. Sen. Chuck Schumer has defined ‘rich’ at $1 million of income, much higher than the president's $250,000.”

Republicans also have public opinion on their side, Hennessey writes. “If everyone's taxes go up, voters will instinctively blame the party of higher taxes.”