Wednesday, June 19, 2013
The country is headed toward a fiscal cliff at the end of the year, according to Federal Reserve Chairman Ben Bernanke, with neither party able to steer us to safety.
That's when the Bush tax cuts and spending authorizations will lapse, triggering a $1.2 trillion across-the-board reduction in spending.
Before popping open the champagne, consider this: a cut of that magnitude, suddenly imposed and without a well-thought-out plan, will have a crippling effect on everything from the military to the elderly to the economic recovery, and will almost certainly send us into another downward spiral of job loss, frustration and despair.
All because neither party seems capable of doing what Washington has been able to do for more than 225 years, which is to forcefully debate competing visions and then find common ground.
Children on a playground taking turns on the seesaw could do better.
Do we really have a debt crisis? You bet.
The federal debt is now 70 percent of our national economy, higher than at any time since World War II.
By 2025, it will crowd out virtually everything in the federal budget but Medicare, Medicaid and Social Security.
That will bring not only disruptions in government but also a lower standard of living for the next generation.
Don't believe the rhetoric that it's all about the other party. The debt is growing because of unfunded tax breaks to virtually everyone, unfunded wars, unfunded stimulus programs and a lengthy recession.
The Republicans brought most of the tax breaks, particularly for the rich, and the Iraq war, while Democrats added the stimulus.
The remedy to this growing debt is bitter medicine for both sides.
Cut bloated and unnecessary programs, reduce military spending, slow the growth of health care costs and increase top-tier taxes to the rich, which were at 70 percent when Reagan took office and are now at 35 percent.
Unfortunately, there are plenty of reasons to expect that this crisis will get worse before it gets better, including:
• My way or the highway. Both parties insist on attacking the debt in a way that causes no discomfort to their core constituencies. Democrats want higher taxes on the rich and limited cuts in programs. Republicans want to reduce programs for the poor and middle class and -- read their lips -- no new taxes, especially on the rich.
• The parties would rather wait. Both parties operate in a kind of permanent dream state where difficult compromises are unnecessary because their party is just about to seize control of the White House, both houses of Congress and a majority of the Supreme Court. Paul Ryan, the Republican VP choice, summed this up perfectly when he voted against the bipartisan Simpson-Bowles debt plan. "There will be an election in 2012," he said. "And if Republicans win we'll be able to reduce the debt our way."
• Both parties love to give things away. Republicans like to give tax breaks to their corporate benefactors and the rich, increase spending to defense contractors and extend senseless subsidies to corporate farming and big oil. Democrats want to reduce taxes for everyone but the rich and somehow still funnel more money into education, infrastructure, the environment, consumer protection, foreign aid, student loans, housing and more. Neither plan is remotely sustainable.
• Compromise is a dirty word. Each party has drawn lines in the sand that cannot be crossed. Nearly all Republicans in Washington, for instance, have signed a pledge not to increase any taxes, of any kind, ever. Democrats have made corresponding pledges to interest groups to protect programs, though not in such a specific or unbending way.
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