If Republicans do cave, it'll bank the government just under $1 trillion in new revenues over 10 years, all from the top two percent of earners in the country. President Obama's goal, though, is to boost 10-year revenues by $1.6 trillion. In other words, if Republicans cut their losses before the end of the year, they'll leave Obama over half a trillion short of his ultimate goal, and without enough leverage to force them to vote for more.
Democrats will be unable to easily wrest from Republicans Obama's other key ask: that the total value of itemized deductions should be limited to 28 percent of income for people making over $250,000 a year.
"The President has had his plan on the table for more than a year," Rep. Chris Van Hollen (D-MD) said in the Capitol on Thursday. "He would say for high-income individuals, the value of your deductions is set at 28 percent. It's part of his budget. It's about $500 billion."
This is true. But the looming expiration of all the Bush tax cuts gives Obama a great deal of leverage to raise income tax rates. If Republicans break down, that leverage will be gone, and he'll still have a ways to go before he meets his revenue target.
The conservative editorialists at the Wall Street Journal have recognized this, and, writing in a tone of great frustration, acknowledge that Republicans' least bad move would be to cave now.
"[Obama's] basically gambling that Republicans will be more reasonable than he is and will blink," they write. "But if they don't blink and we go over the cliff, from his point of view so what? Mr. Obama then has an excuse to blame Republicans if there's another recession. Meanwhile, he pockets the higher tax rates that take effect on January 1 anyway, and he can then negotiate a budget deal next year without having to make any tax concessions."
Van Hollen wants the GOP to blink. He says that Democrats should lock in as much revenue as they can up front, then negotiate with Republicans for further revenues in the next Congress.
"[W]e have to figure out what we're going to do as the down payment for six weeks, and what follows, and that's a big part of this discussion," he said. "When it comes to the Bush tax cuts, that revenue, which is distinct from the new revenue you generate from [the deduction limit] the moment is now for achieving that revenue."
But whether Republicans would allow the Treasury to collect a single new dollar in tax revenue after yielding on the Bush tax cuts is a big open question built on top of another big open question. And it's a safe bet that the GOP would either close the door to further revenues, or demand an exceedingly steep price for them -- such as the entitlement overhauls they called for in 2011 and 2012. Indeed, the combined needs to replace the sequester's $1.2 trillion in spending cuts and raise the debt limit will provide the GOP leverage to demand a lot of budget cuts, paired with little or no revenue.
"Let's be clear: an opening bid of $1.6 trillion in new tax hikes isn't serious," Senate Minority Leader Mitch McConnell said on the Senate floor Thursday morning. "It's a joke."
The implication: Obama's not getting what he wants unless, perhaps, we get ours too.