Off the cliff? White House is willing.

>>> when kelly corey won the oscar for her first screen play 20 years ago, she had no idea that the heroes of her film, thelma and louise were going to become political role models.

>> white house is continue to warn of dire consequences for the middle class .

>> on friday, he'll return to the stumps.

>> he's back on the campaign trail.

>> the campaign style tour.

>> trying to drum up public support for his budget priorities.

>> seems like just another fight in washington .

>> there are really two issues there.

>> a revenue side, yes.

>> where is that revenue going to come from?

>> increasing tax rates is going to harm dmik growth.

>> warren buffett was out this morning talking about tacking the wealthy.

>> time to make the tax rates more progressive.

>> that's just silly.

>> grover norquist , he wanted ground government in the bathtub. i hope he slips in there with it.

>> medicaid, social security .

>> this is not part of the conversation. we're not going to raid social security . just another fight in washington .

>> there's going to be blood and hair and eyeballs all over the floor.

>> i'm more positive thap most.

>> if not, we go off the supposed cliff .

>> the fiscal cliff or slope. the bump of various height.

>> it's going to sell that fiscal cliff .

>>> thelma and louise might need to make room in the car for the president of the united states . at the white house today, senior obama administration officials met with liberal leaders and union officials. "the washington post " reports that one told him after the meeting, quote, would the white house go off the cliff if it's between that and compromising their core principles? i was left with the impression that they would. illinois democratic senator dick durbin spoke today at the liberal center for american progress where he said this about the possibility of going off the cliff which fears of this show know is is really more of a curb than a cliff .

>> some have called let's go over the cliff and watch what happens. we know if we're not careful, it will in fact stop economic growth and hurt everyone through every income category, particularly those most vulnerable.

>> what he did not say is he must not go off the cliff . because the cliff is is president obama 's and the congressional democrats leverage over republicans . if we do go off the cliff or the curb on january 1st , a republican nightmare will occur. all income tax rates will go up and defense spending will be cut by 600 billion. other spending, some of it dear to republicans , will also be cut by another 600 billion. the fiscal cliff is much scarier to republicans than it is to democrats. so, the president and his allies must continue to make republicans believe they are willing to go off cliff . senator durbin simply said if we do go off the cliff or the curb on january 1st , we have to be able to quote stop economic growth to prevent us from stopping at the economic growth and hurting everyone. in other words, we have to then quickly craft a legislative deal that can stop the damage to the economy that would occur if we went off the cliff and stayed off the cliff . john boehner recognizes that the fiscal cliff is the president's leverage, but boehner believes he has leverage, too. politico reported this morning president barack obama made a demand of how john baoehner near the end of their first white house meeting on the fiscal cliff , raised the debt limit before year's end.quote, there is a price for everything. boehner told president obama at the white house that the debt limit increase is quote my leverage. although he added that he's flexible on when it should be done. senator durbin said today that raising the debt ceiling must be part of any deal with republicans .

>> i also think that the president isn't going to sign off on any agreement that doesn't include some certainty as to budgets, appripriations, dealing with our debt ceiling. we're not going to find ourselves with some big party celebrate i celebrating in february and then turn around and march and have another doomsday scenario with the debt ceiling.

>> the man who until this week was the most powerful person in washington who did not sleep in the white house , grover norquist , in a desperate attempt to stay relevant, wroep a piece quickly agreeing with john boehner that the debt ceiling provides plenty of leverage for the gop. the brokenhearted norquist who seems to be getting dumped along with his antitax pledge could not bring himself to issue his usual marching orders in his op-ed piece for fear that that would only provoke more of them to break up with him in a very public way. norqui norquist's rambling piece from the hill is the work of a shattered man. with republicans no longer locked in his passionate and unyielding embrace, he is to put it charitably, confused. on the strategic question of the day, will president obama go off the cliff rather than compromise his core principles, this is the best that the once certain grover norquist could come up with. will obama force the nation over the fiscal cliff to prove his mandate? maybe. joining me now are joy reid, managing editor of the grio and robert reich , former labor secretary and professor at the university of california berkeley . joy, are you feeling sorry for grover norquist yet?

>> immensely. he's such a lonelily l man. the senate is gone. enough republican senators have signal they're going to play bah ball. this is about the house of representatives and really for john boehner , everything changes in a good way for him. if we go off the curb or the cliff on january 1st , he won't be dealing with that tea party caucus and that's the bee in his bonnet that doesn't want to make a deal and by the way, a lot of them are are out the door. so greg's reporting is interesting because it signals that the white house has a public posture in which they say no, we dare not go off the cliff but we're going to get those tax rates increased and the reporting i've done tonight is that there's going to be additional meetings. this was the private version of the public meetings they did last week. now, they've been doing them in private and these are white house economic staff. people who do the policy piece. briefing folks on what they plan to do, so i think if somebody from that meeting who should have talked, but did, was saying they were feeling a sagal that the white house is ready to play chicken with their republicans .

>> robert reich , as you know, someone from a meeting will always talk. this notion that there's ever going to be a successful private meeting on this is impossible. how do you evaluate the leverage we're looking at here? president obama has leverage with a fiscal cliff , if they get to that point, all the tax rates go up and what he's doing is just offering a bill that would reduce the tax rates on most people. john boehner thinks he has leverage with the debt ceiling. how do you evaluate these two pieces of leverage?

>> lawrence, the point that is missing from a lot of these games of chicken and scenarios is that we had an election and it was pretty clear. the democrats won. obama is back in. and one of the clearest issues in that election was that taxes should be raise d and raised on the rich. that gives the president even more lev ranl. i think the president has enormous leverage. if we do go over the cliff in terms of tacks? we go back to the clinton tax rates , which as i remember it, were not so onerous. they certainly were pretty good in terms of the economy. the economy did thot suffer. the economy did much better under clinton than bush. i don't think at least on the tax side, going over the cliff is that big of a deal. it's not really a cliff at all as you suggested and if we get major cuts in the military and defense spending , i'm not sure that's a bad idea at all.

>> now, joy reid, we all deal with being dumped in different ways. that is the choice grover has made tonight on cnn. let's watch.

>> i don't see any movement toward ts republicans wanting to raise taxes or people wanting to break their pledge. in fact, to be fair to everybody, some of these people have had impure thoughts. no one has pulled the trigger and vote e ed for a tax increase.

>> nothing's changed. he's also lying. they have indeed voted for a tax increase. senator tom coburn introduced last year, a bill in the senate to close the ethanol tax credit . saxby chambliss voted for it and violated their grover norquist pledge for it.

>> and also, just by voting for the sequester, they have signalled their willingness to allow steep cuts in defense and tax increases. i mean, he can pretend their clothes are still in his closet and that means they're coming back, but that doesn't mean they're coming back.

>> grover norquist is going to be the last person in washington to admit he is irrelevant. it is over, grover.

>> yeah, people aren't quick to admit their ir relevance in washington . " wall street journal " board is even pushing grover norquist on this. they said president obama 's re-election means tacks for upper income owners are going to go up one way or the other. bush tax rates expire on december 31st . this is where mr. norquist can give some ground. robert reich , did you ever expect that we would be reading an editorial where the " wall street journal " is telling grover norquist that he's got to give ground on the tax increase?

>> no, i didn't. election day does magical things to the " wall street journal " and to a lot of the republican right. they are sounding difsht than before. some of them actually learned a lesson. another aspect of the leverage the president has and this is the republican nightmare, that on january 2nd , democrats come back with legislation that says we are going to have a tax cut for the middle class and then, what do republicans do? at that particular point in time, have got to vote for this or else they look like they are essentially which is what they are, shows for the rich and grover norquist is going to have to say you must vote for this. this is a tax cut . this is the republican nightmare and it is coming. they see it coming and they don't dare use their old threat to put against a raising the debt ceiling. we went through that. they lost huge ground. the public was furious with them for threatening the faith and credit of the united states .

>> not only that, but their option to prevent this is even worse . republicans have said they're willing to throw the medium rich off the side as paul krugman has reported. no, tax all their income. so they've signalled even worse options than just voting for the big tax cut they're going to get to vote for on january 3rd .