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Fiscal cliff - we can't afford it

Published 6:09 pm, Thursday, November 8, 2012
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This week's election results shoved a string of pent-up issues to the forefront. Think of immigration and climate change, which need Washington's attention. But coming in less than two months is the one-two punch of the "fiscal cliff," a financial suicide pact devised to force answers on taxes and the budget.

In the heat of the presidential sweepstakes, Democrats and Republicans avoided a deal over extending Bush-era tax cuts that amount to an average of $3,500 per family. The other half left unsolved is $800 billion in cuts to defense and domestic programs.

As part of a deal to raise the debt ceiling in 2010, Washington bottled up its furious differences and essentially dared itself to solve its deep divisions over taxes and the deficit at a later date. Do nothing and the combination of disastrous cuts and tax bumps will sink the economy - or do the smart thing and hammer out a compromise on both fronts. Now that time has come.

Democrats hope the combination of President Obama's re-election and a slightly larger majority in the Senate will improve their hand. Their oft-stated wish is higher taxes on the upper 2 percent, those earning more than $250,000 per year, with everyone below that line keeping the Bush tax cuts. It's the pitch that got President Obama re-elected, but Republicans have refused to concede, a position that defies political reality.

In morning-after remarks, Republicans are making nice, but only to a point. The GOP has kept its majority in the House, where conservative hard-liners are determined not to budge on no-tax pledges. House Speaker John Boehner, an Ohio Republican, walked a narrow line, signaling he was open to "new revenues" but not higher taxes and calling on Obama to make the first move. Boehner's own predicament - a relative moderate in charge of an unruly conservative bloc - undercut his role in past deal making.

What's on the table is nearly everything: Medicare payments, home mortgage deductions, tax rates up and down the chart, business-friendly loopholes and further budget cuts. These bargaining chips aren't that new, though, and have been under consideration from the start. Boehner has raised the possibility of postponing the whole problem for several months, an idea aimed at dulling the power of Obama's win.

A bigger question is Washington's atmosphere. The election revived Obama's political strength, though he won the popular vote by only about 2.5 percentage points, a smaller amount than his first margin of victory. The House power structure hasn't changed hands, and Tea Party ultras, even the ones voted out, will still be in office between now and year's end. But the country is fed up with this demoralizing trench warfare and wants breakthrough action.

It's time for serious deal making. A compromise that spreads the pain and reflects concessions on both sides is needed. The country cannot afford to jump off the cliff.