So is President Obama bluffing? We already have a pretty good clue to how the White House will act—not what the administration is saying now, but how it actually acted in 2010, the last time the Bush tax cuts were set to expire. Then, as now, doing nothing would have allowed tax rates to rise. And then, as now, the president insisted that he would not extend the Bush tax cuts for top earners. But he did anyway.
To call a bluff you need a lot of intestinal fortitude, which I would guess the GOP lacks. "GOP" is almost the opposite of intestinal fortitude. But we'll see. --TS