Editorial: The fiscal cliff was entirely avoidable
The Kansan - Newton, KS
Posted Dec. 4, 2012 @ 5:01 pm
Posted Dec. 4, 2012 @ 5:01 pm
» Social News
Hereís to hoping the nationís elected leaders in Washington not only avert the so-called fiscal cliff that looms in a month but also make some headway in getting the nationís finances in order.
No country, no matter how wealthy, can borrow to spend and borrow to cut taxes forever.
The nature of politics is to lurch from crisis to crisis, deal to deal and, often, gimmick to gimmick. It is very hard for Congress in, letís say, 2012 to lay down hard-and-fast principles that future Congresses will observe. It is very hard for individual leaders to rise above the muck of the moment and do something unpopular ó even if itís good for the country ó especially if it means making common cause with their political rivals.
We have had in the last several years a series of gimmicks and poor fiscal decisions that have driven the federal deficit to untenable levels.
In 2001, President Bush pushed major tax cuts through Congress, ending the balanced budgets the country had enjoyed for a few years. Some of his fellow Republicans pointed out that these cuts were unsustainable, so to get those last two or three crucial Senate votes, a gimmick was born: Weíll call them temporary tax cuts. We are now in the 12th year of a 10-year tax cut, and the expiration of those cuts is at the heart of the fiscal cliff worries. Add to that an expansion of Medicare to cover prescription drugs ó without identifying funding for it but costing at least $400 billion over 10 years. Add two wars fought off-budget, as if the cost could be ignored. Add the payroll tax cut President Obama pushed through early in his first term ó again a temporary measure. Add the spending and tax cuts for the stimulus programs.
The real gimmicks come when Congress deludes itself into thinking it will act boldly and responsibly tomorrow. In the summer of 2011, Congress turned a simple matter ó raising the federal debt limit ó into a game of political chicken. Nothing was accomplished, but there was real damage. One of the three major credit-rating agencies downgraded Americaís bond rating, bitterly ironic considering that the government continues to issue debt at historically favorable terms and finds a ready market for it.
In the midst of that brouhaha, Congress devised this gun to its own head: OK, OK, weíll work this out by the end of 2012 ó promise ó or else the Bush tax cuts expire and across-the-board spending cuts kick in. That scenario is so horrible and that even we in a feckless Congress will have to act. Weíll appoint a commission to begin working on broad solutions right away. But that commission went nowhere.
So now another gimmick might backfire ó and more credit downgrades loom ó as the clock ticks.
Itís not that good ideas arenít out there. President Obama appointed the Simpson-Bowles Commission, which recommended cutting farm subsidies and other corporate welfare, closing military bases overseas, raising the Social Security retirement age slowly and modestly, freezing federal pay and cutting the federal workforce over time through attrition, and setting aside funds for the inevitable natural disasters instead of pretending they wonít occur.
And setting a lower, broader, fairer series of tax rates. Close the loopholes. Many pay less, but everyone pays.
President Obama thanked Democrat Bowles and Republican Simpson for their work and promptly dropped their common-sense agenda. After all, he had another election to win. Fine. Thatís over now. Letís go. Itís still the best starting point for a discussion.
History suggests that even in a dysfunctional Congress, hope is not lost. Some leaders ó sometimes the unlikeliest of leaders ó can step up and make brave, historic decisions. And this is not to say all of the worldís problems have to be solved by Dec. 31. But, to use Washingtonís term, you canít just kick the can down the road indefinitely.