The Last Word | December 10, 2012
>>> viewers of the show know that the fiscal cliff is not as dramatic as that. it's a fiscal curve, at least at first. but if we go off and stay off the fiscal curve, we will eventually hit the recession cliff. on "meet the press" sunday there were different opinions about whether congressional republicans or president obama would be blamed if there is a recession.
>> we've got to get this behind us once and for all.
>> i don't want to do it, the president doesn't want to do it, but we need to solve the problem. we cannot reckless position to drive us into a recession, a recession which the republicans will own.
>> this does real damage to the economy and to millions of people if going over the cliff. this is not an abstraction. the polls support him that the republicans will own this recession, will last about one month because presidents own recessions. presidents own dramatic improvements and things. we live in the obama era, not the john boehner --
>> joining me now is robert rice , professor at the university of california , berkeley. professor reich, we know that the fiscal cliff is january 1st . if we went off and stayed off, didn't do any legislative repair to it, where do you think the recession cliff would be?
>> lawrence , worst-case scenario, probably by the end of january tacks are clearly going up on the middle class , also major program cuts in discretionary spending are kicking in. there's not too much that the administration can do in terms of front-loading anymore because you've got to -- assuming that there's no deal at all, you've got to make some adjustment with regard to your spending and your spending is going to be cut. that means that you're setting up the economy for a recession maybe by march, maybe by april. we also have very powerful headwinds coming from europe that is in recession because it bought into austerity economics and that's what we would be buying into in a very big way if nothing changed. we also have china that is slowing down. globally and also domestically there is not enough demand to keep the economy going and i would say the worst scenario of all -- i don't think it's going to happen, but probably by march we're going to see some real problems in the economy if nothing happens.
>> i think you and i agree if we do go off the cliff, so to speak, on january 1st , that the negotiations to fix this problem would begin somewhere around january 2nd ?
>> probably the 8:00 a.m . the morning of january 2nd . they are going on right now.
>> there is probably a slightly better than 50/50 chance that there will be a deal before december 18th . assuming that we're close to a deal, i think it's going to happen right away and the democrats are going to be preparing legislation and it's going to be introduced right away, january 2nd , to make a middle class tax cut retroactive to january 1st .
>> yes. exactly. and i think one of the striking things that we're not hearing right now are a stand your ground republicans in the house or in the senate. we're hearing a lot of voices, a lot of cracks in the wall of republican members saying, look, i think we better just go along with this rate thing. let's just get this rate thing done. i don't hear other republicans rushing to the microphone saying absolutely not, under no circumstances we won't do it.
>> no. actually, the republican ettifice is cracking. it's polling pressure, public pressure . it's the kind of pressure that a democracy that proves that -- we are in a democracy, we are still in a democracy, notwithstanding the extraordinary power of big money . we did have an election but i think the republicans are most persuaded by all of the internal polling that they are doing showing that they would be blamed if tax rates went up or at least the middle class just simply did not get a continue weighing of the bush tax cuts and that is causing them enormous heartache. i think that's the civil war that's been going on in the republican party since the election and, frankly, boehner and the slightly more level-headed members of that republican caucus are winning the day.
>> it's my view that all of the president's budget negotiations with republicans have led us to this point. and i actually was of the view that when he did go along with the extension of bush tax cuts two years ago that it was as good of a deal as he possibly have gotten to go forward with this and it seems to me the tremendous strategic advantage that he has and even rush limbaugh concedes he has is something that he has master fully over time attained while by the press being criticized for not being a leader.
>> i think that's absolutely right, lawrence . but the president since the election has done something that he didn't do in previous negotiations during the first four years. he has very dramatically and very, very powerfully gone to the public, continued the campaign, essentially continued the same kind of campaign he had leading up to the election. this time it's raising tax rates on the rich and basically putting republicans back to where they came from. basically saying, we won. i won this election. you won this election and we are going to move forward on the agenda that we had in this election. this is something that the president has not done before nearly as effectively. one more point, lawrence , and that is that unfortunately we are still, even though the president won, even though he's winning on this strategic issue, we're still playing on the goal posts and within the field established by the republicans and that is the deficit reduction is the most important challenge facing the economy.
>> yes. yes.
>> and the most important challenge facing the economy is jobs. jobs. more jobs. economic growth. it is not deficit reduction and i think hopefully the president, when he wins this particular scrimmage, will pivot to the issue of jobs.
>> robert reich , i'm so glad you made that last point. thank you very much for joining me tonight.
>> thank you very much, lawrence .
>>> coming up, republican soul searching continues. a new company has been in job of trying to figure out why republicans lost the last election. someone should tell them that they can find archived versions of this program at thelastword.msnbc.come.
>>> and the most influential person in politics in the last