I’m a registered Democrat who favors pragmatic candidates. I look for policymakers who are interesting in making the US a better for all, and put common sense before politics. Many people keep asking me why it’s so hard for Democrats and Republicans to come to an agreement on averting the fiscal cliff by the new year. Here are my thoughts.
Why the stalemate?
The fiscal cliff wasn’t created by accident. It was a deliberate effort by lawmakers to achieve meaningful deficit reduction before January 1, 2013. Until now, the Washington D.C. political class has eluded any deal on the deficit. Now it’s crunch time – with both parties stuck in D.C. until they come to some kind of agreement to avert the fiscal cliff.
Both parties have their sticking points surrounding any agreement. Republicans wish to avoid raising taxes on anyone, and want serious entitlement (Social Security, Medicare, Medicaid) reform to reign in health care and benefit costs over the long term. Democrats, conversely, want the Bush-era tax cuts to expire on those making more than $250,000 per year, while preserving benefits for elderly and the poor.
In the past, both sides have indicated they’re willing to compromise on core issues. The framework for a deal is beginning to take shape. John Boehner, the Republican Speaker of the House of Representatives, is willing to raise taxes on those making more than $1 million annually, and would raise the debt ceiling for up to two years. President Obama has indicated he’s serious about including entitlement reform in any deal, and would change the measure of inflation for entitlements. He’s also agreed to make permanent the Bush-era tax cuts for those with incomes up to $450,000.
At first glance, it sounds like a deal is close to being made. So, what’s the problem? Republicans continue to balk at the potential tax increases – even only on high-income taxpayers. Additionally, they say not enough is being done on entitlement reform. Democrats, meanwhile, feel uneasy about Obama’s proposal to change the measure of inflation on entitlements, or engage in any type of entitlement reform that potentially limits health benefits.
As a result, Obama and Boehener are at a stalemate. Make a deal now, and each risks alienating key members of his party. Democrats are not certain to agree and vote for a deal which reduces entitlement benefits for the elderly and poor. And Republicans may refuse to support and vote for an agreement that raises taxes. What are the leaders to do?
What can we do?
First and foremost, President Obama must continue encouraging the American public to call their elected representatives in Congress every single day until a fiscal cliff deal is reached. The public needs to reaffirm the consensus that legislators MUST govern from the political center or risk being thrown out of office during the 2014 election cycle. This consensus empowers legislators to take risky political moves that believe them strategically over the next two to four years.
Then, I believe the formula for breaking the stalemate is relatively simple – for both parties. First, Republicans should agree to make permanent the Bush-era tax cuts for everyone making under $500,000 per year. The tax cuts must expire for everyone above that threshold. They must also agree to take Social Security reform off the table and pass a resolution pledging to achieve that reform separately, later this year.
Democrats, on the other hand, must accept that changes need to be made to Medicare and Medicaid. The focus should be on costs and eligibility. Further means-testing must be incorporated depending on income. The medicare eligibility age must be allowed to rise to 67. They must pledge to put these entitlement programs on the road to long-term solvency and rein-in costs.
Together – by meeting in the center – lawmakers on both sides of the aisle can achieve meaningful and lasting deficit reduction. More importantly, they can restore the strategic imperative of governing from the center. A bitterly-divided government, in which lawmakers play only the role of politician, and play only to their own base, is one that cannot function over the long-term.
Finally, they’ll set a precedent for responsible government that lives within its means while still taking care of those in need. That’s something everyone – the political left, right, and center – can be thankful for.