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Krauthammer: Crisis Could Be Averted If "Obama Is Somewhat Generous And Not Quite As Arrogant"

CHARLES KRAUTHAMMER: There are two events that are going to happen January 1. One is the fiscal cliff, which I still think is likely -- it's likely we're going to go over, I think maybe a 60% chance. There could be a last minute proposal if Obama is somewhat generous and not quite as arrogant, and offers something that a small number of Republicans in the House could support.

There's a scenario where you wouldn't go over the cliff. He proposes a slight compromise on the level at which you get higher taxes, say $400,000, extension of unemployment stops with that, essentially. And then if Boehner were to allow a free open vote, then you could get 180 democrats plus 30 republicans. It could happen.

I think that's the only scenario; it's a possible one.

A lot of this stuff is, in principle, easy. But remember, Obama was never interested in solving the fiscal issue. He wanted to break the Republicans, and he did. There is now a civil war on the Republican side, which makes him sort of sovereign in Washington which is a great political achievement. He's smart tactically.

But the other event is going to be the debt ceiling, which is happening on January 1st. The delicious irony is that if you go over the cliff, the debt ceiling is easier to solve, because it means you get a torrent of income for government, a decrease in spending. And as a result, the debt ceiling is postponed. So it's got its little cherished curlicues in here.

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