Would it really be so much to ask that President Barack Obama and congressional leaders drop the “Gunfight at the O.K. Corral” act? Couldn’t they just forget the posturing and get to work on a deficit reduction package that includes fixes to everything else looming at the edge of the “fiscal cliff”?
Alas, it probably is too much to ask. The problems are enormous and have been allowed to fester for decades. The election left a divided White House and Congress in status quo-ante. Lobbyists are lined up from K Street to the Capitol, each one representing interests that insist on being left whole, or better. To mix a couple of metaphors, there are too many fingers in the pie and too many oxen that stand to be gored.
That all of this could be allowed to drag on through the holidays, with the same kind of sniping that characterized the last two years, simply would be reprehensible. Sooner or later, everyone will have to accept some variation of 2010’s Simpson-Bowles deficit reduction plan. It should be sooner.
Unlike two years ago, after Democrats endured a “shellacking” in the 2010 elections, Obama has the upper hand. Not only has he just been re-elected, he has the option of doing nothing and letting Republicans take the blame.
If Congress doesn’t act before year’s end, all of the 2001 and 2003 Bush tax cuts will expire. Taxes will go up across the board. In addition, many of the 2009 middle-class tax cuts will expire, too, along with the Medicare “doc fix,” the unemployment benefits extension and waivers for the alternative minimum tax that upper-middle-class families have to pay. The debt ceiling must need to be raised again.
Furthermore, “sequestration” will kick in, an automatic 10-year cut of $1 trillion in spending, taken equally from defense and domestic programs. That stems from a Republican decision two summers ago to kick the can down the road, hoping to retake the White House in 2012.
All of this could be addressed by the new Congress next year, but the short-term effects could slow recovery, bring on at least a mild recession and create market uncertainties.
A mix of tax increases, tax reform and spending cuts amounting to $4 trillion in savings over 10 years is where former Sen. Alan Simpson, R-Wyo., and former Clinton White House Chief of Staff Erskine Bowles were two years ago. They couldn’t get enough votes from the other members of their presidential commission to send the deal to Congress; Obama was lukewarm, too.
The precise mix of tax cuts, spending cuts and loophole-closings is subject to negotiation, and that’s what should be taking place right now. Put Simpson-Bowles on the table, invite key leaders into the room, lock the doors and don’t let anyone out until it’s done. Spare us the drama.
