The Times West Virginian

December 27, 2012

Compromise crucial for U.S. to avoid financial peril

Times West Virginian

— There is bipartisan agreement in Washington, D.C.

Our nation’s leaders — at least some of them — know the nation is growing increasingly weary of the upcoming “fiscal cliff” and the stalled negotiations to avoid the hundreds of billions of dollars in tax increases and spending cuts scheduled to take place the first of the year.

“Nobody wants to go over this fiscal cliff. It will damage our economy. It will hurt every taxpayer. It will be the largest tax increase in history, affect everybody,” Representative Ileana Ros-Lehtinen, R-Fla., said on CNN on Wednesday. “And anyone who’s watching who thinks, ‘Oh, this isn’t going to impact me,’ you will find out that it will.”

Sen. Joe Lieberman, a Connecticut independent and the 2000 Democratic vice presidential candidate, said, “If we allow that to happen, it will be the most colossal consequential act of congressional irresponsibility in a long time, maybe ever in American history, because of the impact it’ll have on almost every American.”

Democratic Sen. Kent Conrad of North Dakota, chairman of the Senate Budget Committee, called on all 435 members in the House, 100 senators and President Barack Obama to show leadership.

“And you know what is happening?” Conrad added. “What is happening is the same old tired blame game. He said/she said. I think the American people are tired of it. What they want to hear is, ‘What is the solution?’”

Making the battle all the more difficult to understand is that, as The Associated Press reported last week, Democratic and Republican leadership is not that far apart.

Obama wants to raise taxes by about $20 billion a year more than Speaker of the House John Boehner, R-Ohio. The two men differ over spending cuts by roughly the same amount.

In comparison, the federal government expects to collect about $2.6 trillion and spend approximately $3.6 trillion in 2013, as part of a U.S. economy that is well over $15 trillion.

In their talks last week that were initially labeled promising, Obama proposed raising taxes by $1.2 trillion over the coming decade by boosting the current top 35 percent rate to 39.6 percent for income over $400,000, plus other increases on the highest-earning Americans. In the campaign, Obama called for an end to the George W. Bush-era tax cuts for individuals making more than $200,000 or families making more than $250,000.

He also says he’s offered about $1.2 trillion in spending cuts over 10 years, including slowing the growth of benefits from Social Security and other programs. His proposed spending cuts also include $400 billion in savings from Medicare and Medicaid, the health care programs for the elderly and poor whose defense Democrats consider precious priorities.

Boehner has offered about $1 trillion in tax increases and roughly the same amount in spending savings.

Just as Obama has Democrats opposed to his proposed spending cuts, Boehner has Republicans who will not go along with tax increases for anyone — reportedly about 40 members. The speaker abruptly canceled a House vote last Thursday night on his so-called Plan B, a measure that would have prevented looming tax increases on everyone but people earning more than $1 million annually.

Without action, though, taxes are going up across the board — not simply on amounts earned over $200,000, $250,000, $400,000 or $1 million.

Despite all the rhetoric, tax increases, spending cuts or reductions in the rates of growth aren’t going to solve the nation’s financial difficulties. That will only come through solid, sustained growth, which will never occur with these games of “chicken” in Washington. In fact, experts predict that another recession is a strong possibility if an agreement is not reached.

The Senate is scheduled to be in session today, and Obama is returning to the White House from a Christmas vacation in Hawaii. Is finding a way to avoid real financial peril in the year ahead — meaning give on both sides — too much to ask?