The phrase “fiscal cliff” has rapidly become the most overused cliché in American politics. It’s replaced “double down” which was abused during the campaign. President Obama and Mitt Romney accused each other of doubling down on some sort of allegedly failed policy so frequently that I wondered if each man was revealing a previously suppressed desire to be a blackjack dealer in Las Vegas. Now that the election is over, the “fiscal cliff” has become the media’s latest friend.
And unlike “double down”, which often made sense in light of the point the candidate was trying to make, “fiscal cliff” is not an accurate description of reality. Here’s what it is—on January 1, if the Congress and the White House cannot agree on a deficit reduction plan, an automatic package of tax increases and spending cuts go into effect.
The notable tax increase is a boost in the top marginal income tax rate for 35 to 39 percent—in effect, the repeal of the Bush tax cut and restoration of Clinton-era marginal rates. The spending cuts are an across-the-board cut in spending in all programs, save Social Security and veterans benefits, which are exempt. Whether you like each individual idea or hate it, when you consider it as a package, does it really merit a term like “fiscal cliff” that implies the end of civilization awaits?
I’d say this sounds like a reasonable compromise. When it comes to the tax rates, Obama won the election and his view on this topic was no secret. Whether it’s the solution I would come up with or the GOP would come up with is really not relevant right now.
But on the flip side, the Republicans hold an expanded majority in the House of Representatives—unlike Obama, who won a smaller share of the vote in 2012 than he did in his genuine mandate year of 2008, House Republicans won more seats in 2012 than they did in their own genuine tidal wave year of 2010. The views of GOP House members on tax and spending policy are no more a secret than Obama’s and since the House is where all tax and spending bills must originate, they too have a right to a 50/50 solution. And an across-the-board spending reduction is a good place to start.
There is fear that the tax increases and spending cuts will trigger another recession, but what’s the alternative? At what point does our focus on the short-term take a back-seat to our real long-term deficit reduction needs? And the fact remains that even this “fiscal cliff” is rather modest.
The mix of taxes and spending cuts wouldn’t be exactly what I would propose. It wouldn’t be what President Obama or House Republicans would do if either party had won a governing majority. What it will do is reduce the deficit. That’s why I’m rooting for gridlock these next seven weeks and forcing the enactment of this package.
Or maybe I should say I’m doubling down on the idea of going over the fiscal cliff. That’s language our leaders could understand.