The 'fiscal cliff' needs urgent attention, but the election returned the same House/Senate/White House configuration that failed to agree on the budget ceiling in 2011. More active participation by President Obama combined with mediation could help bridge the congressional divide.
The looming “fiscal cliff” is rattling the financial markets, attracting rating agency scrutiny, and fueling public anxiety. Its automatic spending cuts and tax increases would hurt everyone. It would leave the military reeling. Leading economists predict a severe recession if the cliff issues are not resolved by Jan. 1, when they are set to go into effect.
Nor is postponement of compromise – as House Speaker John Boehner proposes – the right answer. Legislation that simply “kicks the can down the road” would leave in place an uncertainty that would invite credit downgrades and further stock-market decline.
The cliff needs urgent attention, but the election returned the same House/Senate/White House configuration that failed to agree on the budget ceiling in 2011. So what’s different this time?
For one thing, President Obama does not face reelection, so that might give him more latitude for compromise. And it’s encouraging that he and congressional leaders of both parties have pledged to reach across the aisle, and will meet in Washington later this week.
Yet the reach may fall short of a handshake. House Speaker Boehner’s post-election day remarks to the press sounded conciliatory. “Mr. President, the Republican majority in the House of Representatives stands ready to work with you to do what’s best for our country.”
He expressed a willingness to accept revenue increases along with spending cuts. However, the speaker made clear that the revenue increases he has in mind are those that would result from the elimination of undefined tax breaks, not on tax increases on the wealthy, as Mr. Obama wants. Sounds like the same uncompromising rhetoric we heard before the election.