Since August of 2011, when a last-minute deal barely averted a default on our national debt, every policymaker has known exactly what would happen on Jan. 1, 2013, if the two political parties failed to reach agreement on long-term fiscal policy. Taxes would rise substantially for all Americans, and massive across-the-board spending cuts would go into effect. This is an outcome that hardly anyone wants. In fact, it was designed to be so unacceptable that both parties would have an incentive to negotiate seriously and resolve their differences.
This has not happened. After the deal on the debt ceiling, both parties abandoned the attempt to govern the country and instead attacked each other relentlessly for more than a year. The 2012 election, though hard fought, did more to obscure than to clarify the choices we face. And the outcome of the election didn’t resolve those choices one way or the other. While President Obama won reelection and Senate Democrats expanded their majority by two seats, the voters left the House of Representatives under Republican control, with a majority only modestly reduced from its huge gains of November 2010.
The parties remain both deeply divided and closely divided. Neither can simply impose its will on the other, and neither is likely to surrender. To be sure, politicians can try to calculate who has a short-term tactical advantage, but that won’t tell them much about the long-term political consequences of failing to reach an agreement. To resolve the fiscal debate, the parties will have to negotiate seriously and in good faith, and they will have to compromise.
Just days after the 2012 election, the majority and minority leaders of the House and Senate met with the president in the Oval Office and emerged professing confidence in their ability to work together to resolve our country’s problems—starting with the looming fiscal crisis. House Speaker John Boehner suggested some new flexibility in his caucus’s longstanding opposition to revenue increases from any source other than economic growth.
Since then, however, optimism has faded, although Boehner on Monday offered up a counter to the president’s initial proposal. It’s incremental progress to be sure, which is not unexpected for negotiations, but still no one can rule out the possibility that we’ll end up going over the cliff. While it’s hard to calculate the consequences of failure, they could turn out to be grave.
It’s irresponsible for anyone to gamble with our country’s future. We need real leadership, and we need it now.
Here’s what we know about the fiscal-cliff negotiations:
• Nearly a month has passed since the election, with scant progress.
• The two sides remain very far apart. The administration’s most recent proposals evoked shock and incredulity among Republican leaders. We’ll see how Boehner’s proposal is received, but as it includes no actual rate increases in combination with significant cuts and entitlement reforms, expect a response from Democrats that is lukewarm at best, as the administration has said.
• The parties seem to be communicating through TV talk shows and campaign-style events rather than in face-to-face negotiations. As far as we know, there is no private track where serious negotiations are occurring.
Here’s what we know about the economy:
• More than three years after the recovery began, real income for households is stagnating, growth remains tepid, and unemployment is much too high.
• According to the CBO, the failure to reach an agreement to avert the automatic spending cuts and tax increases scheduled to take effect on Jan. 1 would risk a new recession and a return to unemployment above 9 percent.
• Uncertainty about future fiscal policy is contributing to consumer caution and a sharp drop in business investment, leading economic analysts to project a significant slowdown in economic growth during the fourth quarter.
Here’s what we know about the political context of our fiscal challenges:
• The world is watching to see whether we can regain our capacity to bridge our differences and govern ourselves effectively.
• The American people, whose trust in government has plunged to near-historic lows, want the parties to resolve their differences through an approach that requires compromise on both sides.
And here’s what we know about the way forward: Only once in the past four years have Democrats and Republicans made significant progress toward an agreement—when President Obama and House Speaker Boehner met behind closed doors, with everything on the table.
Relearning the art of working across party lines is the only way of doing the people’s business.
That’s what the American people deserve, starting right now. The House speaker and the president should be working face to face, in private. They should be meeting at least several times a week, and daily if necessary. They should regard the fiscal talks as their highest priority, and they should remain in Washington until they have brought them to a successful conclusion.
What is success? The American people are sick of delay. They are sick of pretend solutions that address the politics of our problems rather than the problems themselves. They don’t want down payments that lead to more delay. And they have ceased to believe promises that politicians will do tomorrow what they don’t have the courage to do today.
Getting this done will require a rebirth of leadership. Specifically:
Tell the people the full truth. It’s time to stop playing around with budget baselines and phantom budget cuts. Stop pretending that small changes can meet big challenges. Tell us how big the problem is (including unfunded liabilities for Social Security, Medicare, and federal employee future retirement benefits not shown “on the books”) and how much different approaches can contribute to solving it. Use charts, graphs, and language that citizens can understand. And once and for all, agree on the facts, so that we can spend our time on the real issues.
Govern for the future. What’s at stake in the budget debate is nothing less than growth, opportunity, and fairness for all citizens. If we want to preserve our tradition of innovation and upward mobility, we must remove the uncertainty that hovers over our economy. And if we want to retain our global leadership, which has done so much to build peace and prosperity, we must convince other nations that we have regained the capacity to overcome our differences and govern ourselves once more.
Put the country first. The election of 2012 is over. It’s time to stop wrestling for partisan advantage. Yes, there are sincere differences about what we must do to promote the national interest. But deep down, most of our leaders know that no one has a monopoly on wisdom or virtue. It’s time for them all to negotiate with a measure of humility.
Take responsibility. We can argue forever about who is responsible for our current plight, but that won’t help us end it. Our elected officials have been charged with a grave responsibility—to make the decisions that will shape our future. No one can do it for them—not pollsters, not blue-ribbon commissions, not even elections. Our officials cannot escape their responsibility, and they should not evade it. The point is not to blame the other side for failure; the point is to succeed.
Finally: work together. While each party can thwart the other’s plans, neither can impose its will on the other. Relearning the art of working across party lines is the only way of doing the people’s business. During the past generation, the parties cooperated and compromised to save Social Security, reform the tax code, and balance the budget. Yes, it’s harder than it once was: partisan divisions are deeper, and trust has all but disappeared. But that doesn’t change the basic fact that there are only two options: bipartisan compromise and success, or partisan gridlock and failure. There is no third choice, and it’s time for our leaders—all of them—to stop pretending that there is.
Officials in both parties must level with their most fervent supporters: no matter how deeply we believe that we are right, we can’t get everything we want. And the longer we try to, the worse it will be for the country.
It’s time for real leadership. And that means it’s time for truth.