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Just theater? We see some deeper problems

December 4, 2012
Gary Andersen, Lee Smith

It is the view of some that the budget standoff in Washington - known as the "fiscal cliff" - is just a bit of theater. That is, the two sides are currently acting in an unyielding manner in order to please their supporters. Eventually, the analysis goes, the two sides will reach a deal to avoid the tax hikes and spending cuts that are slated to take hold Jan. 1.

We're not so sure the analysts have it right.

It's not just the strong rhetoric that has us concerned. It's the evolving nature of the debate.

Amid a similar standoff over the nation's debt ceiling limit in 2011, President Obama and House Speaker John Boehner, R-Ohio, apparently came within a hair's breadth of a long-term solution to the nation's budget woes. Such a solution would involve major spending cuts and some enhanced revenues, on the order of $3 in cuts for every new dollar in revenue. This is a blueprint laid out in several studies of the problem, notably the Simpson-Bowles Commission.

While the president and Boehner did not reach a deal, it seemed the basis for one existed.

The 2012 election seems to have changed that. Obama is now making new demands that were never previously on the table. Republicans see an arrogance of power, with Democrats believing they "won" the election, and now expecting acquiesence rather than negotiation. In addition to higher taxes (that won't resolve the nation's annual deficits), Obama wants new spending and unconstitutional power to raise the debt ceiling on his own. Republicans are laughing at the gall. This cannot be the basis for any kind of deal to avoid the fiscal cliff or to restructure the nation's budget.

Republicans have taken an extraordinary step for their party of proposing more tax revenue by closing loopholes and deductions for higher-income earners. That is a step toward compromise. Obama has put $600 billion in spending cuts on the table. That is just a third of what he is proposing in new taxes. The ratio, as outlined by Simpson-Bowles, needs to be the opposite.



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