Businesses Bet on Failure in Washington

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Power Play 12/4/2012

Democrats try to hold the line on entitlements. What would actually pass the Senate? And the consequences of stalemate.

"Uncertainty over the fiscal cliff is the big worry right now. People are taking any and all measures to reduce costs and risks."

-- Bradley Holcomb, chairman of the panel that surveys U.S. manufacturers for the Institute for Supply Management, talking to the Wall Street Journal about November's report, the worst showing for the sector in more than three years.

American consumers have shown a bit of optimism since the end of the long, national nightmare that we called the 2012 election.

It was reasonable for consumers to believe that having given over most of a year to that grinding, mostly petty exercise that perhaps America could get on with the business of being America.

But for those folks paid to look around the corner -- CEOs and inventory managers -- the verdict of the 2012 election was a gloomy one. A status quo election dimmed the chances for what they had so desperately wanted from Washington: certainty.

The election left the cast of characters in Washington unchanged, with the principle actors continuing to be the most liberal president since Lyndon Johnson and the speaker of the House leading the most conservative majority since the 1920s.

To make matters worse, that very liberal president is disdainful of personal deal making and that very conservative House is constrained by a Republican primary electorate that is growing more conservative still.

While there were glimmers of hope when Republicans came back to town ready to make concessions on taxes, those were swiftly snuffed when the president made it clear that he was going to press his advantage in an attempt for a larger victory.

After a few weeks of stilted bonhomie, Washington is back where it was in August: hopelessly deadlocked and stumbling from one crisis to another. The fiscal cliff that many, including this political note, believed would force action, has failed to deliver the swift results promised when the president and congressional leaders conceived of it in the summer.

President Obama and the Democrats, eager to have the automatic tax hikes, have gently pushed back the December 31 deadline, saying that the cliff is really a slope. Republicans, desperate to be freed from their current captivity, are making hopeful gurgles about a new kind of supercommittee or automatic votes and triggers.

Delayed deadlines and new cliffs are signs of the massive failure now bearing down on the nation. And while the Obama Democrats are confident they could make Republicans pay more for allowing the current tripwires to trip, the president would pay a terrible price if his brinksmanship and aloofness results in a tumble down the cliff or slope or chasm or fjord or whatever you like to call it.

Obama meantime is scrambling to implement the major policy achievement of his first term, the 2010 health law that provides a new middle-class health insurance entitlement. With legal challenges lingering, states refusing to pick up their part of the bill and reams of new rules to be written, businesses rightly see lots of dangers and uncertainties in the months ahead.

Many Democrats deplored the specifics of the law but supported it anyway on the grounds that it would establish universal coverage as a government obligation and so thoroughly break the existing insurance structure that a new, more centralized, federal system would have to replace it.

Maybe so, but the process of breaking that system is going to be very painful for consumers and businesses. And the pain has already begun, made worse by all of the uncertainty inside the shoddily constructed legislation.

Again, this was no surprise to those executives paid handsomely to see around the corner. And what they saw from the moment on Election Day that the FOX News Channel called Ohio for Obama was a rotten 2013.

The balky implementation of the health law combined with the continual dysfunction of Washington has very reasonably led employers to pull back and do what they have mostly been doing for the last two years: wait.

The president wants a much bigger victory than Republicans were willing to grant him and some are calling for an entire year spent hashing out the details of a larger plan.

But why would anyone believe that there is sufficient goodwill among the parties to lead to a successful large deal? Obama, who is currently trying to shame the Republicans into acceding to his wishes, does not trust the GOP and the GOP believes that Obama is trying to destroy their party permanently.

You don't need to be a Fortune 50 CEO to see that the most likely scenario is two more years like the last two: staggering and stumbling from one crisis to another with hastily assembled, desperation deals assembled on deadline.

Obama believes that he can break the back of the Republican Party in the coming months of panic and despair, but what we are seeing from the private sector right now suggests that a weakening economy will make any victory the president obtains a very hollow one.

And Now, A Word From Charles

"Surprising to me that the president -- who would get the revenues he wants from the deductions and the exclusions -- insists on the rates not for economic reasons but political ones. He wants to break the backs of Republicans. This is a continuation of his campaign. He thinks having won it, now he wants to drive a stake through Republicans. It's all about the politics. It's nothing about the economics."  

-- Charles Krauthammer on "Special Report with Bret Baier."

Chris Stirewalt is digital politics editor for Fox News, and his POWER PLAY column appears Monday-Friday on FoxNews.com. Catch Chris Live online daily at 11:30 a.m. ET  at http:live.foxnews.com.