John Avlon Independent Nation

12.19.12

Obama, Boehner & Congress Need to Get Fiscal-Cliff Deal Done Now

Obama and Boehner should close the fiscal-cliff deal they seem to be nearing, and their skittish parties need to climb aboard—and send the message that our country can solve problems by reasoning together, says John Avlon.

In 12 days, our country goes off the fiscal cliff.

That’s why it’s time for Congress to go big and then go home for the holidays.

With House Speaker John Boehner’s “Plan B” basically DOA in the Democratic Senate, skepticism is growing after an encouraging start to the week in Washington.

But put all the congressional Kabuki theater aside and there’s still evidence that real progress is being made toward what could be a historic step toward bipartisan deficit and debt reduction.

President Obama and Speaker Boehner both deserve credit for making significant concessions in recent days, working toward a balanced plan.

On the Republican side, Boehner has offered to raise not just tax revenues, but tax rates—a risky violation of anti-tax theology as well as a concession to reality in the form of the sun-setting Bush tax cuts. The catch, of course, is that Boehner now wants to raise taxes only on families making more than a $1 million. More important for the country, Boehner has offered to take the debt ceiling off the table for two years, allowing for a degree of stability in the coming Congress.

On the Democratic side, Obama backed off his threshold for the top tax-rate of $250,000, which he’d used as a rhetorical red line throughout the campaign. Instead, the president offered to make the return to Clinton-era rates apply only to the money families earn over $400,000. He also agreed to a significant reform of Social Security with the obfuscating name “chained CPI,” which would adjust the benefit formula for inflation. This is a relatively painless form of entitlement reform that could have significant impact on bending the long-term cost curve.

The two party leaders are trying to meet in the middle and get a deal done. But their biggest obstacles right now are members of their own parties, the activist class on either side, who are arguing that “no deal is better than a bad deal.”

These are the same voices that got us into this mess—arguing that better deals could be gotten when Bowles-Simpson, the Gang of Six, the Grand Bargain, and the Super Committee were formed. There is just no rational reason to believe that the tough decisions will get easier to achieve in the next Congress—that’s the whole sad point of delegating so many major decisions to this lame-duck Congress.

The prospect of a looming election renders most politicians gutless and useless.

The added insult to injury is the debt-ceiling limit, which we’re likely to hit in February. Remember, the last time we played chicken with the debt ceiling it ended up costing taxpayers an additional $18.9 billion as well as our AAA credit rating.

Some Republicans are arguing that the new debt-ceiling limit should be preserved to increase their leverage in the next Congress. That is an incredibly short-sighted and selfish approach to negotiations. Increasing the debt ceiling should be part of any year-end deal. After all, the definition of insanity is doing the same thing over again and expecting a different result.

Simply kicking the can isn’t sufficient. Falling over the fiscal cliff will have a devastating effect on our economy while we’re still working our way out of a great recession. Yes, we’ll need more time in a new year for comprehensive tax reform and more detailed entitlement reforms as part of a truly comprehensive deficit and debt plan. But that’s no reason not to make some progress now.

If Obama and Boehner play their cards right, maybe we won’t have to hear ‘Merry Cliffmas’ sung in the halls of Congress.

In addition, we need to extend unemployment benefits (something that’s gotten shockingly little attention in all the coverage of the fiscal cliff). There’s also a strong argument for additional infrastructure and stimulus spending to help spur growth. Getting our country off the constantly looming AMT middle-class-tax-hike crisis would also be a welcome sign of progress. All these ambitious goals seem close, even in a limited deal. It will provide real progress and a foundation for future success.

If Dealmakers Obama and Boehner show the leadership required to take on the bases of their own parties in the coming days, we can get a deal done. Market-makers might scoff at the size of $2 trillion in savings, but the fact that a Democratic president is offering entitlement reforms and spending cuts, while a Republican speaker is conceding raising top rates and raising the debt ceiling is a positive step forward for the nation. Typical Washington cynicism shouldn’t stop us from recognizing that the mutual concessions are historic. Such a plan won’t solve all the problems we face, but it will send the message that our country has the capacity to solve them by reasoning together.

So don’t listen to the siren songs of partisans who claim that going over the cliff could be politically advantageous. They are parroting the old party line that always puts special interests ahead of the national interest. President Obama and Speaker Boehner are both savvy negotiators who are trying to meet in the middle. They might well meet at a $500,000 top tax rate along with spending cuts, entitlement reform, and raising the debt ceiling. With the fact of divided government, we all have an interest in their success. The alternative is ugly and self-defeating.

So here’s hoping that a big deal gets done as a prelude to more constructive action in the coming year. The second-term agenda is ambitious—including immigration reform, tax reform, and now quite possibly, reasonable gun restrictions. Any legislation will need to be passed with bipartisan margins; that’s just a fact. So let’s get in the habit by avoiding another self-inflicted disaster and then aiming higher.

If Obama and Boehner play their cards right, maybe we won’t have to hear “Merry Cliffmas” sung in the halls of Congress. More important, we’ll all have something to celebrate come New Years’ Eve.