For many people, the idea of completing a task in a relaxed manner leads to procrastination because without a narrow field of time, or particular point in time, by which an objective or task must be accomplished, important undertakings would never see fruition. The current fiscal cliff deadline is, in reality, an arbitrary date with little meaning because if it is not met by December 31, the talks would continue early in 2013 and would, more than likely, result in a plan not unlike one that eventually is passed. Washington legislators are notorious for waiting till the last minute to reach agreements on anything and whether it is for negotiating leverage or apathetic reasons, there was little doubt Republicans and the President would come to some kind of agreement. Yesterday President Obama sent Speaker John Boehner a third proposal as a compromise to avert the Republicans’ fiscal cliff.
The President’s proposal is another sign of his willingness to acquiesce to the voters’ will that Democrats and Republicans compromise to reduce the deficit while allowing the economy to continue recovering. There are some aspects of the President’s proposal that will dismay his Democratic base, but he has held firm to his promise that taxes on the wealthiest Americans revert to Clinton-era levels while protecting working families as well as an aging population depending on Medicare and Social Security to survive during their retirement years. The good news is that the President resisted calls to raise the Medicare retirement age from 65 to 67, and it is welcomed news for millions of baby-boomers entering retirement and a prospect of two years without healthcare coverage. The White House intimated the proposal was not the President’s final offer, but with Congress anxious to head home for the holidays, it is difficult to imagine negotiations carrying on much longer.
The new proposal calls for $1.2 trillion in new revenue that is down from the President’s original offer of $1.6 trillion, and second of $1.4 trillion, and should be easier for Boehner to take back to Republicans for moaning and groaning about inflicting pain on so-called job creators, but accept and pass the deal. The new proposal calls for Bush-era rates to remain in place for income under $400,000 annually and is a good counter-offer to Boehner’s call for incomes under $1 million in response to the President’s initial proposal of $250,000. Obviously, many Democrats will oppose the lower threshold, but compared to just a year ago, it is nearly unimaginable the prospect of raising taxes on the rich is in the realm of possibility.
In what will be difficult for many in the progressive caucus to swallow is allowing the payroll tax cut passed two years ago to lapse without an apparent replacement, but the President’s plan does call for an unemployment benefit extension and funding for infrastructure spending Republicans have obstructed and claim is better spent on more tax breaks for the rich. The one part of the proposal Republicans will have the hardest time swallowing is a demand that the nation’s debt limit be raised for two years, and allowance for Congress to periodically vote to not raise the limit, but the deal gives the President veto power over any congressional opposition. The President is well within his right to veto any refusal to raise the debt ceiling because the Constitution clearly says in Section 4 of the Fourteenth Amendment that, “The validity of the public debt of the United States, authorized by law, shall not be questioned,” and any attempts by Congress to question the debt, or cause a default on the debt is a Constitutional violation. There are some scholars who claim the 14th Amendment only applied to debt incurred during the Civil War, but they are the same adherents who argue for a textualist interpretation that Section 4 clearly meets. Undoubtedly, if the President invoked a Constitutional provision to avert a credit default it would invariably lead to a court battle because this President is an African American Democrat.
Republicans should be comfortable with the level of spending cuts in the President’s latest offer because it pairs the level of cuts with revenue increases that, coupled with last year’s debt ceiling standoff of a trillion dollars in spending cuts and those in his latest proposal, amounts to $3.4 trillion in deficit reduction. Adding in savings from winding down the wars exceeds $4 trillion that is closer to the President’s initial plan Republicans rejected last year that led to the Super-Committee’s failure and the current fiscal cliff deadline. The GOP could have averted sequestration cuts, the dreaded fiscal cliff, and a credit downgrade if they had accepted the President’s $4 trillion balanced approach in 2011, but then again expecting Republicans to work with the President has been a fantasy for four years. In fact, the President’s latest offer will reach the same levels of spending cuts and revenue increases he called for last year that sent Republicans into an obstructionist fit the nation’s economy, and citizens, have suffered for the past year.
The American people have signaled time and time again that they expect their representatives to compromise to solve the nation’s problems, and President Obama has fulfilled his part of the deal since he was elected. His latest fiscal cliff offer is further proof that, despite what Republicans claim, he is willing to make concessions to move the country forward, and follow the will of the people. President Obama won reelection on the promise of raising taxes on the wealthiest Americans while making hard choices to cut the deficit that does not include gutting Medicare and Social Security. His latest offer will not entirely satisfy many Democrats, but he has put forth an offer that can pass both houses of Congress if Republicans drop their aversion to tax increases for the wealthy and Draconian cuts to American’s retirement and healthcare accounts.
As of last night, Boehner had not commented on the President’s latest offer, but with a deadline looming and legislators panting to be home for the holidays, time is running out for a solution that avoids the fiscal cliff and uncertainty in the markets. John Boehner has an opportunity to show some leadership and corral recalcitrant teabaggers’ absurd demand that all deficit reduction comes solely from spending cuts, and if he is either unwilling, or unable, to compromise with the President, then when the deadline passes and the economy reacts negatively, Americans will rightly blame Republicans. It is just unfortunate that Republican obstruction sent the nation to the brink of another fiscal crisis they could have easily avoided if they had accepted the “grand bargain” the President and Boehner reached over a year ago, and will now probably save the economy from going over the Republican-caused fiscal cliff.