On the PBS NewsHour, Erskine Bowles, cochairman of the noted deficit-reduction commission he led with Republican former Sen. Alan Simpson, said that Washington’s overdramatized fiscal-cliff negotiations amount to little more than “Kabuki theater.”
It’s amazing how placid everyone is about the fiscal cliff. As previously discussed here, there are painfully obvious and historically vital reasons to prevent massive cuts and tax hikes from kicking in on Jan. 2:
1. The economic consequences are real, with the potential of deeper and more persistent retrenchment of business investment, diminished consumer confidence and spending, and bond-rating downgrades just the jagged edge of the economic cavity that awaits us.
2. The political downside for President Obama and House Speaker John Boehner is both immediate and career-defining. Screw this up and impose the first premeditated recession in history (not to mention whiffing on entitlement cuts required by mathematics and justice), and you’ve significantly mucked up the first paragraph of your political obituary.
3. Outside of the economic and personal political concerns, this is no time to treat our part-time foes and full-time enemies to virulent political cannibalism that makes us weaker and them, by definition, stronger.
For the life of me, I can’t understand why everyone is so calm. Republicans grouse that the White House’s opening offer is “unserious” and borders on a “joke.” The White House dismisses the GOP counteroffer as “magic beans and fairy dust.” But all of this is said with a summer-stock theatricality that strikes me as even more of a ridiculous joke than all of this dull rhetorical jousting.
What’s more, both sides contend that while politics look and sound stymied, they can erase the laws of physics. If you accept the somewhat tortured metaphor of fiscal-cliff ideas representing a ping-pong ball lobbed back and forth over the ideological table of possibility, the ball now floats in midair, suspended as if by magic above the net. The White House offer can be ignored by Boehner with the same vigor as the GOP’s can be ignored by Obama. If this is to be believed, that suggests the ball is in nobody’s court.
That’s what Obama meant when he told Bloomberg TV on Tuesday, “I don’t think the issue right now is sitting in a room.”
Obama wants Republicans to cry uncle on higher tax rates on individuals with adjusted gross income above $200,000 and families above $250,000. Crying uncle is the necessary price, Obama says, of due seriousness on entitlement cuts such as raising the eligibility age of Medicare or reducing inflation adjustments for Social Security. But Republicans can’t shed those kinds of political tears for watery promises about entitlement reform. That’s why things appear—and actually are—stuck.
And yet, Bowles thinks this is all an artistic fandango. Even Wisconsin’s Republican Gov. Scott Walker, emerging from a White House meeting on the cliff, was unperturbed by the lateness of the hour and proximity to the cliff.
“These things tend to get worked out at crunch time,” Walker said.
Crunch time is coming, and it seems both sides know it.
Boehner has said publicly what he only hinted at privately during the debt-ceiling talks: He can swallow $800 billion in higher tax revenue on the wealthiest families and individuals. That figure hasn’t been voted through the GOP House, so its political tensile strength remains unclear. But no House members or tea partiers have shown up with torches or pitchforks outside Boehner’s office. The only protesters who have shown up wielded nothing, not even their clothes. Obama wants more clarity on higher rates (actually, he wants capitulation: “Uncle!”), and Boehner wants more specifics on doable entitlement cuts.
This is the axis on which a deal will spin or the wheels will come off the economy and the nation’s sense of political possibility and rationality.
This article appears in the Dec. 5, 2012, edition of National Journal Daily as Fiscal-Cliff Physics.