The Art Of Compromise
Judging from what I’m seeing there doesn’t really seem to be any one on either side of the aisle that is all that thrilled with the Fiscal Cliff deal that passed the Senate in the early hours of the morning. It’s easy to see why that’s the case.
For one thing, we knew that the Fiscal Cliff was coming seventeen months ago when Congress passed the Budget Control Act of 2011 which resolved the debt ceiling crisis that had gripped Washington that entire summer. Part of that deal included the appointment of a so-called “Supercommittee” that was intended to work out a budget deal that would have avoided the Sequestration Cuts that had been put in the BCA more as a threat to Congress than as something that anyone thought would ever actually be implemented. By November 2011, though, it was clear that the so-called “Supercommittee” had failed. At that point, everyone in Congress knew that the Sequestration Cuts were going to happen unless a deal of some kind were made. Similarly, we’ve known for two years that the Bush Tax Cuts were going to expire on December 31, 2012 along with the latest Alternative Minimum Tax modifications, the Medicare “Doc Fix,” the extension of unemployment benefits, and a whole host of other programs. There was nothing at all surprising about the so-called “Fiscal Cliff.” It was, as we’ve mentioned here several times at OTB in the past two months, a crisis entirely created by Congress and by the unwillingness of our political leaders to deal with a problem until the last possible moment.
As always happens when Congress procrastinates like this, there’s not a whole heck of a lot to like about the bill the Senate passed last night. Yes, it does keep the Bush income tax rates permanent for something like 99% of the American people, and it also rationalizes once and for all the Alternative Minimum Tax in a manner that will prevent ordinary Americans from being caught up in that Bizarro World twin of the Income Tax Code. It also makes some needed changes to the Estate Tax that should shield the estates of most Americans from even being considered taxable. At the same time, though, the bill completely ignores issues like the debt ceiling, merely punts the question of the Sequestration Cuts down the road two months ago, and doesn’t touch the question of either comprehensive tax reform or entitlement reform. Additionally, many conservatives are objecting to the fact that the bill actually effectively increases spending and the deficit. Indeed, preliminary scoring from the Congressional Budget Office of the bill the Senate passed last night says that the measure would increase the Fiscal Year 2013 budget by $330 million and adds $4 trillion to the National Debt over ten years compared to what would happen if there was no deal at all. Because of this, there are calls from many on the right for the House GOP to reject the Senate bill, or to amend it, a measure which would virtually guarantee that nothing will be signed into law before the 112th Congress comes to an end in a little under 46 hours.
I’ve spent far more time discussing politics on this New Year’s Day than I probably should, mostly with friends on the right who are vehemently opposed to this deal largely because it doesn’t accomplish everything they want. When I mention the fact that their position would mean that everyone’s income taxes would rise substantially and that, based on every analysis I’ve seen, the economy would likely enter recession no later than the third quarter of the year, the response seems to be rather cavalier. Even the Republican partisans don’t seem to recognize that a rejection of the deal by the House at this point would likely be a political disaster for the Republican Party. Most importantly, though, none of them seem to realize that the Republican Party only controls one half of one branch of the Federal Government at the moment. The fact that they control the House and are able to filibuster in the Senate gives them negotiating power, of course, but in the end the reality is that they are not going to get everything that they want in the current political environment. This means that compromise and deal making are inevitable.
Compromise has become a dirty word on the right in recent years but, in reality, it’s the essence of politics and as American as apple pie. President’s and Congress’s have found themselves being forced to compromise in order to get the nation’s business done from the beginning of the Republic. Washington compromised, so did Jefferson. Lincoln was forced to engage in much political bargaining during the Civil War. Even LBJ needed to reach across the political aisle in 1964 in order to get the Civil Rights Act passed. Ronald Reagan, the great conservative, made many deals with his arch political rival, who he still maintained a friendly personal relationship with, Tip O’Neil. Even in the days when FDR’s Democrats held an iron grip on Congressional majorities during the Depression, Roosevelt found himself often having to negotiate with members of his own party to get things done. This is how governing occurs in a political system such as ours. To reject it is to reject the very idea of governing itself, which is certainly the impression that many Republicans give when they insist on a “my way or the highway” approach.
The bill that the Senate passed last night is far from ideal. However, at this late date, it’s pretty clear that it’s the best that can be done. Perhaps if the GOP had approached these negotiations more seriously after the election rather than insisting on adhering to a “no tax rate increases” orthodoxy that makes no sense politically, the outcome would have been different. Perhaps we might even been able to get a deal that resolved all of those things that the Senate bill pushes off for two or three months. In any case, though, this is the deal that is now before the House. Either they accept it, or there is no deal and everyone in America sees their income tax rates go up. The choice that faces the House GOP is really that simple. What they decide will decide the fate not only of our economy, but of their political futures. If it were me, I’d hold my nose, vote yes, and move on to the next battle. It simply isn’t worth dying on the hill of protecting 1% of the population.