A threatening specter is looming over our national economy – the so-called “fiscal cliff”. The fiscal cliff, a widespread, automatic tax increase expected to hit 90% of Americans next year, will be triggered on January 2 of next year… unless Congress takes action to stop it.
To avoid careening off the fiscal cliff, a different deficit reduction method will need to be passed into law. In all likelihood, the U.S. economy will plunge back into a recession if the cliff is not avoided, due both to the scheduled overarching tax increases and the confirmation of the inability of the federal government to be bipartisan and responsible enough to address the nation’s ballooning debt in an effective manner. Everyone acknowledges that we need to avoid this calamity, but there is a problem: the Democrats and the Republicans have both drawn lines in the sand, and there is a gap between them.
The Democrats have firmly ruled out any plan that does not include revenue increases, and the Republicans have firmly ruled out any plan that includes revenue increases. Obviously, if both sides stick to their guns here, no solution can possibly be reached. But naturally, neither party should be expected to fully give in. With the reelection of President Obama, the Democrats received a clear mandate to address the deficit and debt with revenue increases as part of the deal, and specifically tax increases for only the wealthiest Americans. That is not to say that the Republicans’ fiscal conservatism was fully rebuked – the GOP retained control of the House of Representatives. However, in this specific situation, to avoid the fiscal cliff (and by all means, the federal government as a whole is certainly expected to take action to ward off what would surely be a stock market-crashing disaster) the congressional Republicans are going to have to make a difficult decision: to renege on their pledges to never raise taxes. The pledges, enforced by archlobbyist Grover Norquist of Americans for Tax Reform, are decades-old for many GOP legislators, but unfortunately, Norquist’s pledge is absolute and has no exit clause to speak of. Republicans have been running with the pledge as a core component of their platforms for many years, but now the time has come to consider other responsibilities.
As a general rule, no politician should compromise on his or her principles. But unfortunately, these are some incredibly difficult and pivotal times for our country, and considering that the Democrats hold both the Senate and the White House (and therefore have the upper hand in any fiscal cliff negotiations), the Republicans need to stop and ask themselves which is more important: their ideological opposition to tax increases or the health of the national economy. Which one will be more harmful: tax increases for the wealthiest Americans or tax increases for almost everyone? It is understandable that the Republicans do not want to turn their back on one of their most fundamental promises, but as politicians, they have an even more fundamental obligation – to do what is best for the country.
But besides the clear importance to the nation of a bipartisan compromise on this issue, this is also a serious political issue for congressional Republicans. If the Republicans put their feet down and refuse to agree to a deal with tax increases, the fiscal cliff cannot be avoided; however, in such a situation the blame for such a failure will fall fully on the Republicans. No one is going to call the Democrats uncompromising for requiring revenue increases, but if the Republicans do not go back on their pledges, they will cause the Republican Party to be held responsible for another domestic economic crisis. Of course, the Democrats do not get a free pass here; in exchange for their requested revenue increases, the Democrats will need to be willing to make a commitment to serious and meaningful spending cuts, and the “sacred cow” of social entitlements is simply going to have to be addressed. Both sides are going to have to bend, but in this instance, the Republicans must be prepared to bend a little more. This does not mean the GOP needs to give up fiscal conservatism, but it does mean it must be willing to listen to the American people and to put nation and party before unyielding ideology.