x129: Over and over in his speeches, and in the debates, Obama said his "plan" would not raise taxes on the middle class. That was one of his main selling points to his followers.
Of course he can't directly raise taxes himself. But I rather doubt the republicans will insist on raising taxes rather than reduce spending. The game of chicken, as you put it, will have to be played before December 31.
Don't know where you came up with "And cutting ~5% of the debt in not an insignificant number in my mind." Our national debt is over $16 trillion dollars. Our 2012 deficit is $1.33 trillion.