Opinion

The Great Debate

Post fiscal cliff: The fix is in

We’ve been trying to deal with the national debt in this country for 30 years now.  The fiscal cliff is just the latest failed gimmick.  We’ve had more failed gimmicks than professional wrestling.

Failed?  Yes, because the whole idea of the fiscal cliff was to force the federal government to put in place a long-term reduction of the national debt.  And look what happened.  Instead of reducing the national debt, the deal passed by Congress late Tuesday night will add $4 trillion to the deficit over the next 10 years, according to the nonpartisan Congressional Budget Office.

In the 1980s, we tried the Gramm-Rudman-Hollings law.  If the federal budget missed its deficit-reduction targets, the law triggered across-the-board spending cuts (“sequesters”).  Guess what?  It never happened.  Congress exempted 70 percent of the budget from sequestration.

A number of candidates have tried to run for president on a platform of deficit-reduction.  They all failed.  Starting with Vice President Walter Mondale in 1984: “Ronald Reagan will raise your taxes.  So will I.  He won’t tell you.  I just did.” Goodbye, Walter.

Senator Paul Tsongas promised tough medicine in 1992.  He declared that he was “not running to be Santa Claus.” His opponent in the Democratic primaries, Bill Clinton, proved that Santa Claus is a popular fellow.

Class war in the new Gilded Age

2012 was the first class-warfare election of our new Gilded Age. The first since the middle class has come to understand, in the words of new Senator-elect Elizabeth Warren (D-Mass.), that the “rules are rigged against it.” Business-as-usual may no longer be acceptable.

But Washington didn’t get the memo. Even as ballots were still being counted in Palm Beach, Florida, the two parties lurched into the fierce debate over the fiscal cliff, the noxious brew of automatic spending cuts and expiring tax cuts that would poison the recovery. The debate, a dismal sequel to the 2011 debt ceiling melodrama, focuses on deficits not jobs. Once more, Republicans are threatening to blow up the recovery unless Democrats make otherwise unacceptable concessions. Once more, President Barack Obama looks for a “grand bargain,” seeking bipartisan support for terms divorced from opinion outside the beltway. Once more, what Scott Galupo at The American Conservative called the “clown show” of the House Republican caucus blows itself up.

Republicans are the most clueless about this new reality. The election’s one clear mandate, confirmed in polls ever since, was for Obama’s oft-repeated pledge to let the Bush tax cuts expire on those earning more than $250,000. Yet, House Republicans stood staunch in defense of the very rich – refusing to pass their own speaker’s bill to extend the tax breaks on everyone except millionaires.

Can Congress pull back from the brink?

Americans want to see Congress and the president make a deal on the “fiscal cliff,” that noxious mix of expiring tax cuts and mandatory spending slashing due at year’s end. They just don’t think it will happen without a lot of pain, according to recent polls.

But if Washington leaders don’t reach an agreement, which looks more than possible, it will be for a good reason: Incentives are strongest for policymakers to act only after the cliff has come and gone ‑ and wreaked a great deal of havoc in the process.

So far, the fiscal cliff looks like the Y2K of 2012. It’s an eventuality that requires a great deal of preparation and occupies politicians and the chattering classes but which has yet to produce the visible scars of crushed 401(k) statements, widespread layoffs or television graphics about a plunging Dow.

Why Congress can’t deliberate

The new Congress next year will likely inherit high-stakes standoffs over many complicated issues, from financial credibility to immigration. Our elected leaders must be able to make difficult trade-offs and craft policies that reflect the best expert knowledge.

In its current dysfunctional state, however, Congress cannot have nuanced deliberations or make knowledgeable judgments. One big reason is that it no longer has the capacity to produce unbiased public-interest information.

In the mid-1990s the mechanisms that produced the information and statistics that Congress had relied on to produce bills were virtually disassembled. Under House Speaker Newt Gingrich, many support panels that supplied information and analysis to Congress members were disbanded or curtailed.

Fighting off the counterrevolution

The conventional wisdom has arrived: 2012 was a status quo election.  President Barack Obama was reelected.  Democrats continue to have a majority in the Senate.  Republicans still control the House.  Only two states changed their presidential votes from 2008 to 2012 (North Carolina and Indiana).  Six billion dollars were spent and almost nothing changed!

The conventional wisdom is wrong.  Things have indeed changed.  Voters came out to defend the revolution of 2008.  They rejected a return to the old order.

The status quo candidate in this election was Republican presidential nominee Mitt Romney.  Romney represented the old order that’s been in power since 1980: the Reagan regime with its power base of older white men.  Bill Clinton, the only Democrat to win the White House during that regime, tried to make accommodations with it.  They impeached him.

Keystone XL’s organizing principle

In October 2011, National Journal surveyed energy experts about whether Obama was likely to approve the Keystone XL pipeline, which would carry Canadian tar-sands oil through the U.S. to the Gulf of Mexico. Ninety-one percent of the “energy and environment insiders” believed he would.

On Wednesday, Obama proved them wrong.

How could the experts have gotten it so wrong? The answer is twofold: Grassroots environmentalists were stronger, and congressional Republicans dumber, than anyone predicted.

Back in August of 2011, when author and activist Bill McKibben staged the first anti-Keystone rallies around the White House, political observers scoffed. These were, after all, the same environmentalists who had been rendered irrelevant by their cap-and-trade defeat and the stress of economic recession. No way they could stop a fossil fuel infrastructure project with big money behind it.

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